Say you won £1000 in a contest. What would you do with the money? It's not an absolutely huge life-changing sum, but it's a still a nice windfall of extra money to fall into your bank account.
So what would you do with the unassigned money?
I had to make this decision recently. I knew I was in for a tax refund because I'd been on the wrong tax code for six months of the past year! I was very pleasantly surprised to see that I was due a refund of just over £1000!
Now, the thing about my tax refund is that it isn't “free money”, although it is VERY easy to think of it as an excuse to spend! It's money that I had to give up valuable hours of my life to attain. Then again, even if I won £1000 it would be hard to forget that it is worth nearly 165 hours of my life (at minimum wage). Ouch, that is painful to write! I think my time should be worth a lot more than that!
Here's what I did with my hard-earned yet unassigned money:
- Bristol fund - £410. I completed my Moving-to-Bristol fund. This was the main thing I was saving for, so it was important to me to sort it out long before I might need it at the end of the summer!
- Travel fund - £60. I save a little money every month for future travel and I thought it would be great to use some tax refund for something that I will really enjoy. I love seeing the rest of the world! :)
- Gift fund - £50. May and June are particularly expensive months for birthdays in my world, so it was good to re-build my depleted gift fund!
- Family meal - £30. My family rarely go out to eat because it can be quite expensive. I treated us all to breakfast on my sister's birthday with a little of the cash.
- Emergency fund - £200. After meeting my main savings goal (Bristol fund) I have started bulking up my emergency fund because you never know when you'll need some cash.
- Concert ticket - £24. If I am going to spend money, I would rather buy an experience than an object. When I heard one of my favourite bands was coming to Cornwall and putting on a concert on a local beach, I had to go!
- Bike repairs - £26. I had a blow-out the other day. I don't know what I ran over but the puncture ripped straight through the tyre and into the inner tube, leaving a big tear in both of them. I bought a new tyre and upgraded my inner-tube to a puncture-proof variety. So far so good!
- Current account buffer - £200. I tend to transfer any “spare” money into my ISA, so occasionally my current account goes into my interest-free overdraft. This doesn't cost me anything so isn't really a problem, but since I got out of debt I really don't like seeing the number go below £0. I put a £200 buffer in this account and think of it as £0, so now I should never actually go into the red.
What would you do with a windfall? Save it all or blow it on a holiday or the latest iGadget? :) Did you get a tax refund? Click here to find out if you are entitled to a refund and how to get it!
P.S. That 58 minutes on hold to HMRC was the best-paid hour I've ever spent!