Money requires an assignment, an allocation, a place, and a purpose. An assignment is a specific task or amount of work to be undertaken. A position, post, or office to which someone has been reserved or set aside is an assignment, too. A piece of work or a task given is also an assignment. Knowing the assignment for your money and financial resources is necessary to limit mismanagement.
When your money is assigned in advance to receipt of the monetary resources, the plan and purpose has been predetermined and assigned in advance. This is especially important for economic and monetary windfalls. For example, do you know how you would assign a $10,000, $25,000, or $100,000 windfall. Vision boards should be readily available to see. The vision boards should clearly depict the allocation and assignment of monetary resources, including windfalls. The next time I receive a lump sum payment of $25,000, I am going to donate 10%, invest 40%, save 25%, and use the remaining 25% to pay down any outstanding credit card debt. The credit card debt payments will only be utilized for credit card balances that can be paid in full.
Individuals often receive windfalls from tax refunds, insurance settlements, performance bonuses, sales bonuses, sales commissions, start bonuses for new employment opportunities, and a host of other cash payments from varying categories. The danger of an unallocated windfall is typically how the money is spent. Too often windfalls are used to 1) purchase cars and furniture or 2) fund shopping sprees and extravagant trips. Months and years later, the individual who received the lump sum cash payment cannot even recall the payment amount nor where the money was spent. Many individuals sigh in regret knowing they have no idea how all of that money went right through their hands. It is possible to expect and plan for monetary gains and windfalls. Knowing exactly what to do with these significant and unusual payments can be the starting point for your accumulation of wealth.
To schedule a consultation with Nicole Michelle, feel free to connect with her on the Home Page.
Nicole Michelle
Finance and Money Wiz
May 12, 2022
Comments