“What Do We Do with This?” – How to handle a positive financial surprise.
Brian and Emily, a busy couple living in Lake Norman, just outside of Charlotte, NC, had an exciting but unexpected financial situation on their hands. Between their demanding careers and raising their five-year-old daughter, Harper, their days were already packed—but now, they had a big financial decision to make.
Emily’s company was acquired and as part of the deal, she received a lump sum payout for her shares. At nearly the same time, Brian received a nice surprise of his own—a larger than expected bonus.
Obviously, these are great problems to have, but like many high-achieving professionals, their first thought was: “What should we do with this?”
With life moving fast, they didn’t have time to overanalyze every financial move—but they also didn’t want to waste this opportunity. They called us and we walked through a plan that would allow them to potentially increase the windfall while keeping it aligned with their larger financial goals.
Here’s what we considered:
- Taxes. Before celebrating, we took care of the potential tax implications. How would Emily’s stock payout and Brian’s bonus affect their taxable income? We set aside cash to offset.
- Building financial flexibility. They allocated a portion to fulfill their emergency fund. If possible, we like to have 6+ months of expenses set aside in a HYSA.
- Lingering debt. They had manageable student loan and car loan balances, but we weighed the benefits of paying them off and clearing up their monthly obligations VS maintaining the low-interest revolving debt. It was decided to pay off the debt and reallocate the former monthly payments into their high-yield savings account.
- Investing for the future. They added to their brokerage account and Harpers 529 college fund.
- Enjoy it! They had always dreamed of taking Harper on her first big international trip, so after all the “responsible stuff” was taken care of, we set aside funds for a family vacation to Disney in Paris—a memory-making experience that aligned with their values.
Following our meeting, Brian and Emily enjoyed clarity and confidence—not just about this windfall, but about how every financial decision tied back into their bigger plan.
A bonus, payout, or unexpected financial event presents a great opportunity, but it’s important to have a clear plan to determine the smartest way to use it.
If you’ve had a windfall and are wondering, “What do we do with this?”, let’s make sure you implement it into your plan.
If you or someone you’re close to is a high-achieving professional that could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
–Nic
Know My Plan and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation. Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
