A friend of mine recently received a $5,000 bonus for coming up with a money-saving idea that will save her employer $10,000 a year. Coming up with the idea -- a plan for cutting direct mail costs -- was easy. (She's smart and resourceful.) But finding a way to use the money is becoming more of a challenge and even sparking a small disagreement with a close relative.
After taxes, she had about $3,000 in cash. So far, she has used the proceeds to buy perfume, a replacement ring for her husband, a bottle of perfume and a restaurant meal. The rest: She plans to save for a house. She and her husband are newlyweds. And once the housing market settles down, they plan to purchase their first home.
I think she has a great plan for her found money: a little bit of splurging and a lot of saving. And I told her so. But an older relatives, however, has different ideas and is urging my friend to take the found money and find some big-fun: A blow-out trip or some other big-ticket purchase to celebrate the unexpected cash.
What do you think? Do you have advice for my friend? How would you spend extra money? By the way, she's current on all of her bills and very frugal.