But what if you did? Or—more realistically—what would you do with an unexpected windfall, like a year-end bonus, a tax refund, or an inheritance? Start by asking yourself 3 simple questions:

1. Is my emergency fund sufficient?

Emergency funds can help cover essential expenses if you lose your job, face a major illness, or run into other financial hurdles.

What’s the right emergency fund amount?

Figure out your target number

How big should your emergency nest egg be? Experts recommend having enough money set aside to cover at least 3–6 months of daily living expenses.

If your emergency fund is a bit light, consider using your windfall to bolster it. Even if you think your savings are adequate, beefing them up with a portion of your windfall can’t hurt, especially if your income isn’t steady or you work in an industry where layoffs are common.

2. Am I in debt?

Unfortunately, living with substantial credit card debt has become the norm for many Americans. In fact, the average American household has over $15,000 in credit card debt, according to a survey by nerdwallet.com.

Need help with your credit card debt?

Try this payoff calculator

If you’re carrying large credit card balances, come up with a plan to pay them off. Make a list of all your debt and identify the card that carries the highest interest rate. Continue to make the minimum payments on all your outstanding balances, but put extra money toward the card that has the highest interest rate.

Sure, there are more exciting ways to spend a windfall, but the satisfaction of freeing yourself from debt is a force to be reckoned with.

3. Am I saving enough?

Once you’ve addressed your emergency fund and your debts, it’s time to take a close look at retirement and other financial needs.

Saving at least 12%–15% of your annual income for retirement (including employer contributions to retirement plan accounts) is a good goal. If you’re saving less than that, consider setting more money aside today. Even a 1% increase in your annual savings, or an extra onetime contribution, can add up over time.

And while you’re at it, don’t forget about your other long-term goals, like saving for college.

The bottom line

Even if you never hit the jackpot, any financial windfall can be put to good use for your financial future.


All investing is subject to risk, including the possible loss of the money you invest.