Pay Down Debt A pile of loot suddenly landing in your lap is the perfect time to get the credit card monkey off your back. It's a chance to make a big dent in your debt, and that will save you money every month in future interest payments. It will also give you a psychic return by knowing your debt has been reduced. Or you could make an IRA contribution for the year 2000. That could result in a hefty tax break next year, and a better retirement down the road.
Every household needs some spare cash to protect against a sudden emergency.
That gives you some extra padding for those inevitable disasters that hit all families, from serious illness to dropping your transmission on the Southeast Expressway. A money market mutual fund is a great place to save extra cash. Resist the temptation to spend it frivolously. Here is a chance to save money ahead of time instead of piling vacation bills on your credit cards. It just means postponing the gratification of spending the money by a few months.