If you suddenly had $1,000, what would you do with it? Would you save most of it, spend it on a new bike, or buy a plane ticket to Paris? That's the question I put to three personal finance bloggers, all of whom have very different approaches to spending and saving. Over the next few days, I'll be posting their answers to that question, and their responses to each other's choices.
Then it's your turn. In the first edition of the Alpha Consumer Challenge, the question is: What would you do with $1,000 that dropped unexpectedly into your hands? To participate, just post your answer below. I'll pick the three choices that are the most creative, savvy, and also realistic (of course, there is a lot of subjectivity in those criteria), and then we'll pick the best one in a vote. The winner will get his or her name and photo posted on the blog and also receive a copy of Curtis Arnold's How You Can Profit From Credit Cards.
First blogger up: J.D. Roth from Get Rich Slowly:
Before I took charge of my money, I would have spent the $1,000 wholly on stuff for myself: bike gear, comic books, videogames, a vacation. I probably would have spent more than $1,000, actually, incurring more debt.
While I was digging out of debt, I would have used 10% ($100) to indulge myself in the same way, but I would have applied most of it to paying my bills.
It's strange, but now that I'm out of debt and can afford to spend money on myself, I find I don't want to. I'd rather save. Before, I spent money on myself because I felt like I couldn't afford the things I wanted. Now that I know I can have the things I want, I don't buy them.
For the past few months, I've been putting all of my spare cash into a high-yield savings account. That's what I plan to do with my economic stimulus rebate, and that's what I'd do with a $1,000 windfall.
I'd rather save for bigger goals than just a new bicycle. I'm saving for a new car. I'm toying with the idea of paying off the mortgage early. I'd love to visit London again. I won't be able to do those things if I spend my windfalls on the smaller things now.
That's what J.D. would do with the money—what about you?