This morning, I participated in a "Mind over Money" panel on Channel 9 in Washington, where I answered calls about life insurance, identity theft, and child support. In addition to those bread-and-butter topics of personal finance, I also got my favorite kind of question: one that focuses on the opportunities that money can bring us. A 57-year-old woman who recently accepted a $20,000 buyout at work wanted to know what she should do with the money.
First, I asked her about her retirement savings. Did she have enough built up to pay for her living expenses? She did. This $20,000, she explained, was just extra.
So I asked her about her retirement goals. What did she want to spend these years doing? "As little as possible," she said. She also wanted to renovate part of her house.
While she mulls over other possibilities, she's going to put the money in an interest-bearing savings account, CD, or money-market fund that pays as high a return as possible while taking on minimum risk. (For more on savings options, check out this article.)
That way, it will be ready for her if and when she wants to spend it.
What to do with money that isn't already spoken for is a wonderful problem to have, and the perfect opportunity to step back and think about the dreams that money can turn into reality. My dream list includes corrective eye surgery, signing up for weekly baskets of local produce, and a dog. I've heard from others who dream of Pilates teacher training, visiting gorillas in Rwanda, and providing micro-finance loans to small-business owners half a world away. What's on your list?