The Psychology of Financial Windfalls: How Unexpected Money Influences Spending Behavior

Maybe it was a $20 bill you found on the subway platform or sidewalk. Maybe it was a surprise bonus at work. Or perhaps it was money inherited from a relative. Whichever the case, maybe you’ve been one of the lucky ones who’ve come into a windfall of money, small or large.

If you’re reading this and thinking, “Fat chance, that’s not me!” wait just a minute. Chances are that even if you haven’t yet experienced such a windfall of money, you most likely will at some point. It could be as mundane as a tax refund higher than you expected or a government stimulus check.

However, the question isn’t, “How can I predict when I’ll get a windfall of money?” (Though I’d love to be able to answer that!) Instead, we should ask, “How should we treat such windfalls? Should they be spent in a 'treat yo’self' splurge? Socked away in an investment account to be used for the future? Or a little of column A and a little of column B?”