Okay to clarify here, the money wasn't "unexpected" in that it fell out of the sky or was somehow gifted to me by some unknown force. I did actually earn the money through my own hard work by freelancing my time.
What I meant by this being unexpected was that I wasn't expecting this money for at least another month.
No, no it isn't a bad thing really that I received the money that I earned early. And yes, I should be happy that my hard earned money is going towards my expenses sooner rather than later. But it is an bit inconvenient in that it somewhat skews my current monetary plans.
Right now, every dollar that comes in from my regular job more or less has a set task for it to see through, whether it is towards my rent, debt or what have you. The money I earn freelancing, of which I can make a healthy guess as to when that amount is made available to me, also has some kind of job attached to each of its dollars, mostly towards my debt and my savings.
I even already spent my tax return in my head for chrissakes. (A tale that I will regale once that task gets put to bed for good later this month)
So what's the big deal? Put the money where you were planning to put it in April and be done with it.
Except I haven't yet set my April budgetary planning into motion yet, and frankly because of the tax refund, I couldn't plan yet. As far as my vague monetary plans were for that money in April, it was to fill any holes that my tax return couldn't cover in either my savings or in my debt repayment plan. Not something that can be done before the return.
Nonetheless, there are various options available to me right now that I can do with that money anyway that doesn't include spending it. It's just a matter of figuring out what I want to do really.
1. Dump the full sum into my debts.
Note that I used the plural form here. Yes, even though I have paid over my monthly $200 minimum on my Mastercard for March, since the future is still an uncertain and scary thing, I would rather abide by my aforementioned plan of splitting any excess cash between it and my student loans.
Nevertheless, it still gives each a $75 boost off the principle of each debt in the end and long term will save me in crucial interest costs down the road which can be looked at as an immediate return on the investment. Importantly, it also makes a full and immediate impact on my net worth.
As far as most people will tell you, this is the smart option, the right option and when you have debt, it shouldn't even be up for discussion. Debt repayment is priority number one above and beyond any other concerns out there.
Except that this kind of money is like a drop of water in an ocean of trouble when it comes to my debt. And I'm of a mind of having something that provides a little more instant gratification for this money.
Which is wrong and is bad and won't help me as long term as paying down debt. I know that. But after foisting nearly $800 to debt this month, I really would like to see some of my other projects get a little more consideration.
2. Put the full sum towards my travel savings.
It really just occurred to me today while playing around with my budgets, but I'm very, very behind on my travel savings. And we're not even talking by a small amount either. We're looking at about $500 behind on my travel savings. And unlike with my debt repayments, it will make a big dent in allowing me to catch up on the costs.
However, because my travel savings are considered short term, I don't include it into my net worth adjustment, meaning that this money won't impact it at all, a thing that makes me a little unhappy if for no other reason than I am obsessed with raising my net worth as much as possible right now.
So happy upside because it means I will catch up to something. But downside because it means it doesn't make an impact on my net worth. Boo.
3. Put the sum into my emergency fund.
This would actually make a difference for me because boy does my emergency fund ever need this infusion of cash after the crackpot scheme I pulled a few weeks ago involving using some of the money in my emergency fund and investing it in my TFSA, which basically negated that money's ability to do its job as an actual emergency fund.
And while granted, it made zero actual impact on my net worth, still, all told I'm short around $400 from where I was just a month ago with my emergency fund plans. And all because I got impatient with my savings pace in my TFSA.
And so, here I am almost completely starting over and $150 would actually do quite a bit here towards rebuilding (again, for the second time in four months) my intended emergency fund limit of $3000 while paying down my student loans.
So there it is. All the ideas and possibilities that I personally have strong consideration in doing with this unexpected sum. I mean, there are other options for sure, including putting the cash into my TFSA Investing account with the intent of investing or even spending it, but none that I would call a priority currently. Chances are I may end up hedging my bets and splitting it one way or another between choices.
But even then, what would you do in my place? Would you be smart and straight and pay down the debt, or will you go for the instant gratification of seeing your savings go up a pretty significant number? (to you anyway)
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