8 smart ways to spend a hefty windfall
Save and slash debt simultaneously
Dave Jones, president of the Association of Independent Consumer Credit Counseling Agencies in Fairfax, Va., recommends socking away at least $10,000 into a savings account if you have debts but no savings. Then spend the rest to eliminate or pay down your debts, concentrating on your highest interest rate obligations first.
If you have savings and no debt, you could consider low-risk investments, such as a money market fund or other "balanced low-risk fund," Jones says.
Almost as important is what to avoid: "impulsive spending on inane perishables," he says.