Extra Cash$? How To Save It and Use It

finance foundations, financial religion, savings

I thought we’d continue our talk about bonus checks and talk about windfalls – what’s not to adore about windfalls? I love the temporary power-up in spending power, whether it’s a $1,000 bonus check for doing my job or an extra $20 I found stuck in my jeans, fresh out of the dryer.

It’s unrealistic to count on these little lotteries to come to your aid when, say, rent’s due and you’re short the whole way. But they definitely happen often enough that’s its worthwhile to have a framework to handle the situation when it arises, whether it’s a holiday bonus, birthday money, or your tax refund.

How Would You Spend $1,200

A co-worker encountered a windfall recently – he discovered he’d been overpaying his cell phone bill for exactly one year. AT&T continued to charge him $100 for a phone plan he canceled, despite paying an additional charge for early contract termination. After an infuriating two-hour conversation, three customer representatives and total bonding time with suicidal jingle music of 47 minutes, he received two things…

  1. More evidence that AT&T‘s customer service is a big flaming dickhead by design, to encourage frustrated customers to give up anytime the company decides to piss all over them
  2. A $1,200 windfall

Which was awesome for my co-worker, since just a few weeks earlier, he was complaining about his inability to get his financial house in order. Beyond his rent and what his paycheck told him, he had no idea how much he spending or saving. $1,200 wasn’t going to change anyone’s life but it was definitely a nice bump. So I asked him what his plans were for his free money.

“I think I’m going to take a trip to Vegas baby!” He made the “raining money” money gesture, invented by rappers and imitated everywhere by young pro football players and suburbanites to display their utter disregard for money, which explains why not long before soon they don’t have any. Yesterday the guy didn’t have two dollars to rub together, and today he’s planning on putting Candy at Spearmint Rhino through college by making it rain all over her fake breasts.

make it rain


The Good Life vs. Building Wealth

We’ll never be younger or more beautiful than today, and it’s important to take advantage of these years: to try new things, meet new people, and take part in activities generally acceptable in your late 20’s (but might feel a bit desperate in your late 40s). On the same token, this is also the time to take intelligent risks with your money, and create the foundation to accumulate wealth. (“Wealth” feels like a big word to throw around when you’re still budgeting for drinks and lunches, but this is where it starts.)

Financially, you will never have as few responsibilities as today. Regardless of your stance on marriage or children, the simple truth is the older you get, the more you accumulate. The more you accumulate, the more you have to protect. Conversely, you’re not able to work at the same rate as the younger version of yourself. I’m not even 30 yet, and my body is already kicking my own ass if I don’t sleep enough, or if I drink too hard. Just a few years ago, every week I’d work one all-nighter, then go straight through all my classes the next day without any sleep, no problem. (I think I might die if I tried that today!)

Nor will you ever be as in-touch with industry change as you are now. Ten years from today, you’re not going to want to push Deadline or Mash able directly to your phone, or check it three times a day. You’ll have other pressing concerns: a business, clients, family — aspects of your life you love and need to protect. Aspects that take precedent over who renewed their overall deal or who was offered a role on the hot Blacklist script.

I think we all believe that in the indeterminate future, our financial ducks will be in order, and we’ll pull in cash$ hand over fist, doing creative and fulfilling work. However, on an individual basis, past behavior is the clearest indicator of future behavior. I see executives and managers and producers all scrambling to get something, anything made, to create a revenue stream that’ll pay for a lifestyle they’ve grown accustomed to but is already on life-support. I believe that’s something this next generation of Hollywood (and work force as a whole) can avoid, but we need to change our thinking. We need to see past all the toys and shiny cars and houses our predecessors received in exchange for their complete obedience, and focus on real wealth. Instead of becoming slaves to the paycheck and Christmas bonuses and windfalls, we need to put those dollar signs to work for us.

Save a ‘Lil, Spend a ‘Lil

Since my co-worker made this $1,200 as a one-off, handling this money is even simpler than taking the 10-year view. Put a chunk of it away: at least 30%, up to 80%. AT&T already did him the favor (perhaps the first time in their corporate history, and even then it was a fluke) of putting the money aside for him. If that money made it to his checking account in all likelihood he’d have spent it already. Now he’s just got to put some aside for himself.

Once you’ve saved a predetermined chunk of the windfall, go ahead and splurge the money on whatever makes your little heart flutter. You can do this completely guilt-free, with a portion of the money tucked away in the (figurative) sock drawer. Take pleasure in the rest — because you’ll never be younger or more beautiful than you are today.


Photo Credits: Gifrific


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