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How to Spend a Raise, Windfall, Inheritance, or Tax Refund - YouTube
Channel: Budget Girl
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Good news! you got a raise! or here's some
other money that you weren't expecting
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what are you gonna do with it
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hi friends I am Sarah also known as a
budget girl here on the Internet and I
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make videos every single week on how to
manage your money on any income pay off
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debt and build the life of your dreams
unless I paid off $33,000 of student
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loan debt in just three years and three
months on a mostly $26,000 reporter
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salary that went up to $30,000 in the
last year I did it by side hustling
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figuring out how to master a budget to
make sure that I would never be burdened
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by debt again now I have my full income
to work with and I'm building my wealth
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so that I will one day soon be a
millionaire if you like winning with
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money I'd love it if you liked this
video and also subscribed if you new
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it's totally free and it's what the
millionaires would do so today we're
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gonna talk about what to do with a
sudden windfall of money I was lucky
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enough very recently to get a small
raise ever less than $2,000 a year which
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actually doesn't break down to that much
but it was honestly money that I wasn't
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expecting
my boss is absolutely wonderful and just
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called me in one day and said hey I had
to resubmit budgets for the next fiscal
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year for employees or whatever and I
think you deserve this money and I was
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like that's amazing thank you so much
it's also incredibly different from how
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my previous career as a journalist was
because you didn't get raises as a
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journalist ever I never even heard of
them from anyone getting one and now
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that I work at a university Texas A&M I
actually get like longevity pay and
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benefits and insurance and they do
cost-of-living increases every couple of
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years and your bosses actually give you
raises sometimes it's really wonderful
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so the question is what do you do with a
race or a windfall of some kind it
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doesn't have to be a race say you got a
small inheritance or you want a contest
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or say you sold something or sat
hopefully not but if you got into a car
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accident and got
small payout what do you do with that
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sudden windfall of money that you're not
expecting so depending on your
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personality you might choose one of the
following ways the first way which I
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would not recommend by the way is to
treat yo'self spend it on something fun
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take a vacation get a new wardrobe go
for a spa day and this is what a lot of
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people do is they increase their
lifestyle to meet their new salary or
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their new windfall money they treat that
money like it's always been there and
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will always be there and increase their
lifestyle to the point where it's like
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they didn't even get the race but
windfalls can be the most amazing way to
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propel yourself ahead financially
especially when you're forecasting your
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future an additional maybe $2,000
probably doesn't mean that much to you
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right now but if you saved or invested
that it could really increase the amount
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of money that you had at say retirement
you could use that money to invest in
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yourself and take a course or if you're
a small business owner invest into your
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business say if you're a photographer
buy new camera equipment which could
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then make you more money which would be
the second way to spend the money is to
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invest in yourself or in some formal
capacity where you're using that money
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to build you more money another way to
use your windfall would be to pretend it
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didn't happen pull the wool over your
own eyes and just immediately send it to
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like savings or investing and just
pretend you never even got it and that
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by the way is what a lot of very wealthy
people do anytime they get returns on
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their money they just throw it back into
their investments in savings so it can
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grow them more money this by the way is
what I plan to do with my money but
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we'll get back into that in a second and
of course the fourth thing that you
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could do with this is do some sort of
split and I actually think this is one
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of the healthiest ways to deal with the
windfall is to maybe save like 80
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percent of it or put 80 percent of it
toward your money goals and then take
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the other 20% and do something fun and
that's a really balanced way to live a
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life and in that way as you're
increasing your income your lifestyles
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coming up a little you have
or creature comforts but you're not
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spending everything that's coming in so
let's talk about what I'm doing with my
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race so like I said it was a little
under two thousand dollars specifically
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one hundred and twenty dollars and
thirteen cents per monthly paycheck that
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I get so that actually doesn't sound
like that much and it doesn't equal out
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to almost two grand if you times it by
twelve but that's because with the raise
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my taxes went out just a little bit and
also and this is something I'm very
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excited about my retirement
contributions went up a very healthy
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percent so before this raise I was
contributing about two hundred and fifty
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dollars a month to a Teachers Retirement
System account which is building money
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for my future and I could not touch it
until I retire which is wonderful my job
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Texas A&M also matches what I put in
which by the way is seven point seven
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percent of my income they match six
point five percent of it which it is an
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amazing benefit if you have an employer
that matches retirement funds
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absolutely contribute as much as you
need to to get that match it's free
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money
so I was contributing about two hundred
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fifty dollars a month to my retirement
but after this raise it went out to
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three hundred and three dollars and
seventy seven cents and up of forty
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eight dollars now what's cool about that
is that a my retirement contribution
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went out a decent amount without me
having to do anything it was just an
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automatic up as my salary increased but
the better part is that that forty eight
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dollar increase that I'm giving to it
each month Texas A&M is going to add to
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it so that it'll probably be around
seventy dollars actually a month that is
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now going to my retirement so it's like
an even bigger race which is amazing I
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could go in and adjust it so I wasn't
putting so much short retirement but I'm
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absolutely not going to do that I've
loved putting it as much as I can for
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retirement because that is going to make
me wealthy in the long term so what did
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I do with the hundred and twenty dollars
that is coming into my paycheck each
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month now well like I said I'm kind of a
pretend it didn't happen
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person and throw it right at my next big
money goal which is actually saving for
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a multi-family property like a
duplex where I will live in one side
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rent out the other and house hackett by
using the renter's income to pay the
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mortgage for the whole property freeing
up a lot of my current income to build
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more wealth with if you're interested
more in how that kind of dream is
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manifesting I will link a video below on
kind of how I came to that and it's more
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on what I'm doing with it so right now
I'm saving up a down payment for that
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multi-family property and I was putting
three hundred and fifty dollars per
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month into an investment account for
that to be accessed in the next two to
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three years hopefully sooner I decided
to put one hundred twenty dollars and
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thirteen cents straight into that
account so that I never see it I just
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changed my automatic contribution and
then it was at four seventy and I didn't
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think that was around enough number so I
actually went into my budget and I
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lowered a couple of categories a little
bit that I thought I could maybe do
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without and I rounded up to an even $500
a month so now I'm contributing $500 a
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month to that down payment fund and
that's gonna get built a lot faster at
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that rate than it was at 350 no matter
what you decide to do with your windfall
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I encourage you to pay attention to your
paychecks and pay attention to that
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money as it comes in and monitor how it
goes out because if you're not paying
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attention to where that money is going
where any of your money is going it
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tends to drift away we've all had those
days where we had a bunch of cash and we
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went shopping when we were teenagers and
by the end of the day we were like why
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did I spend all this money on well it's
exactly like that but on the macro level
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of your entire salary is just leaking
out these little places when you don't
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know where your money's going so pay
attention to your pay stubs pay
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attention to changes when they happen
and if you're ballsy enough pretend
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those windfalls didn't happen and throw
them straight at your money goals I
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would love to know what you do with
windfall money whether you are a enjoy
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it let's live life a little if you
pretend it didn't happen or if your are
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more moderate you know you enjoy a
little bit but you also increase your
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giggles and save a little bit too I
would love to hear what you have done
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with your recent money wind balls in the
comments below and if you enjoyed this
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video I would love it if you gave it a
thumbs up and subscribe if you're new
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here we talk about all the money things
all the time thank you so much for
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watching and I will see you in the next
one bye
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by the way you guys always ask in the
comments what lipstick I'm wearing and
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this time
usually it's sell out by Too Faced which
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I've worn in basically every video I've
ever published in the last two years but
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this time it is sofyan eye guards
new Franken shade mix with color pop
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this is the berry me and lipsticks and
it's actually a really beautiful kind of
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maroon but depending on what you wear it
with it goes really really well with
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basically anything and I'm extremely
thrilled with it I will link it down
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below not affiliated at all but it's
it's really really nice and I'm a big
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fan of hers so when she announced her
collaboration with color pop and did the
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whole building a giant lipstick thing I
went ahead and ordered one with some of
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my personal money and totally worth it
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