Smart Strategies for Managing a Windfall

By: Edward Pontarelli Jr.

If a financial windfall is in your future, when the day comes, you’ll have decisions to make. A large infusion of cash is generally welcome news, but it can come with challenges and complexity.

Here are some things to consider when your financial circumstances change for the better overnight.

Don’t make any sudden decisions. Whether you’ve been enriched by an inheritance, a boom in business, the lottery, or something else, take your time before making big decisions you may later regret. For example, don’t quit your job or make large purchases without thinking through the consequences and looking at the big picture. Instead, study your options so you can feel confident about your next steps.

Build your emergency fund. Your windfall is an opportunity to shore up financial security. For that reason, a portion of your new-found wealth belongs in an emergency fund, particularly if yours has been underfunded. Experts recommend setting aside six months to one year of expenses to prepare for a downturn in financial circumstances. Hold this money in an account that’s liquid so you can readily access it. And, keep emergency funds separate from your regular checking account to avoid the temptation to dip into them.

Tackle debt. Debt is often the greatest threat to financial stability. If you’ve racked up unpaid balances, your windfall represents a great opportunity to reduce or eliminate them. The first order of business is to pay down your credit card or other high-interest debt. Doing so can drastically reduce your monthly expenses and improve your credit score in the process. Paying down low-interest mortgage debt may not be as high a priority, especially if you can offset mortgage interest with investment gains.

Invest in your future. Put your windfall to work to create financial stability now and in the future. Fund your retirement plan with a balanced portfolio aligned to your risk tolerance and time horizon. Diversify your holdings with a range of stocks and bonds. You might also consider alternative tangible assets such as property.

Plan your estate. A sudden windfall is a reminder that life can change in a heartbeat. Take this opportunity to create or update your will. Assign beneficiaries to your assets, including your life insurance policy. Consider creating a trust to pass your wealth to the next generation.

Spend wisely. Don’t let your good fortune cloud your judgment. Be discerning in your expenditures. A large infusion of cash may permit you to make long-desired purchases, change careers, or help family and friends, but perhaps not all at once. Ideally you will continue to maintain a household budget to prevent overspending.

Share your good fortune. If your changed financial status allows it, be generous with the people and organizations you care about. Philanthropy and charitable deeds contribute to health and well-being while also strengthening communities.

Talk to a tax professional. Unexpected cash can affect your tax bill. There may be strategies you can employ to lessen your tax liability. For example, you may be able to fund an individual retirement account (IRA) or a health savings account (HSA) to reduce taxable income for the year. Make sure you’re taking advantage of available deductions and credits that lower your tax bill.

Get guidance from a financial advisor. An experienced financial professional can help you in the happy circumstance of a financial windfall. Consult an advisor for advice on how to manage your good fortune for optimal results.

Anchor Financial Mortgage Makes “The American Dream” Possible

by Mark Berger

Buying or selling a home can both be the most gratifying, yet, biggest stress inducer for anyone. There is plenty to learn and understand, usually through a small window of opportunity. While there are homes available for purchase, current inventory is not at optimum levels for buyers. Another factor is people having big plans for a new home, but soon realize they are not ready to make that jump because they haven’t properly prepared.

Making certain potential home buyers actually qualify and are comfortable to buy a home is imperative to a smooth process for both buyers and sellers. Looking at half million-dollar homes, when one can only afford $300,000, makes little sense. You can set yourself up for major disappointment or even worse, lose money.

To get out of “Fantasy Land” and into a more suitable frame of mind, Anchor Financial Mortgage, located at 1 Lonsdale Avenue in Pawtucket, does all the work necessary to make sure their clients are able to finish what they start. Anchor President Joseph Baptista and his team “tailor fit” the right mortgage for their buyers, with access to every mortgage program available. Baptista’s philosophy is simple: “affordable financing plus outstanding service, equals customers for life.” That often takes some extra work, but he feels it’s well worth it based on the company’s repeat business. Their loyal customer base of 20-plus years demonstrates the small business does things right, working with second- and third-generation families!

“We’ve been in business for a while now, and the best compliment we get is how thorough we are,” he said, adding they have never received a complaint from the Better Business Bureau since opening in 2000. “We have an in-house underwriting and processing team that goes above and beyond to make sure our clients are successful. Our staff educates, and is dedicated to constant communication with our clients and referral partners because knowledge is power!”

Anchor Financial Mortgage specializes in purchase mortgages. Whether a first-time homebuyer, move-up buyer, or experienced real estate investor, they know how to get you across the finish line.

Anchor has lending partnerships with numerous federal and state programs designed to help make buying a home a reality for many who thought they couldn’t. Homeownership is the “American Dream” because it is the single greatest way to build wealth and stability for your future. Anchor Financial Mortgage has all the tools to make it happen.

For people who would like to know that beforehand, they can visit the company’s website at www.anchorfinancial.com and go to “Apply Now,” fill out their details, and find out what they can afford.

Baptista said that no matter what the situation or circumstances are, they have the ways to help.

“We work with all the different lenders and agencies— nationally and locally—to give our clients the best financing available,” he said. “Whether someone needs to be preapproved for a new mortgage, refinance for cash out, eliminate PMI on their existing mortgage, or need a home improvement loan, we have the resources and knowledge to assist both new and experienced homeowners get the mortgage financing they deserve.

“We don’t cut corners or take shortcuts; we don’t charge any processing or underwriting fees, and our customer service makes us stand out. It’s all about the customer experience,” said Baptista.

He added that the most rewarding part of the job is seeing the smiles on the faces of first-time homebuyers, who never thought they could own a home. With inflation and the current cost of rent so ridiculously high, it is extremely hard for new homebuyers to save up money for a down payment. Working with state agencies such as RI Housing and Mass Housing, Anchor is able to make these dreams a reality.

How can anyone save up for a down payment when so many are paying $2000 (or more) a month for rent? RI Housing and Mass Housing programs provide down payment assistance for first time homebuyers, so now they can start paying their own mortgage instead of paying their landlord’s mortgage. Also, credit score requirements are lower—as low as 620 for RI Housing and 640 for Mass Housing! Of course, they look at more than just the credit scores, but these are the minimums needed to get you through the door.

Baptista said bad-credit customers are a specialty. As he puts it, “I’ve never seen a credit report I can’t fix!” He explained that sometimes it takes some time and money to settle old debts, if they think necessary, but he and his team are credit experts. They don’t charge any creditrepair fees. They will also send you a free copy of your credit report, with detailed instructions on the steps needed to get the credit on track.

For senior homeowners over the age of 62, Anchor is also proud to offer affordable reverse mortgages. A reverse mortgage will eliminate monthly mortgage payment and may also provide a regular monthly disbursement to you. Seniors may also take cash out for any reason at closing, and even have a line of credit available for future use. These programs are based on equity, and with the increased equity in everyone’s homes today, seniors who have tried for a reverse mortgage in the past, unsuccessfully, may now qualify!” he said. He added, “Anchor has been able to help so many seniors stay happy and in their homes for as long as they are healthy.”

Baptista warns customers about seniors getting taken advantage of with these mortgages. He advises anyone interested in such programs to contact his office first.

Anchor Financial Mortgage services all of New England (except for Vermont), New York, and Florida, with 22 years of A+ ratings with the Better Business Bureau, with no consumer complaints. They strive to provide qualified individuals with the best possible mortgage financing available, with customer service that is second to none!

For more information about Anchor Financial Mortgage, its services and programs, visit AnchorFinancial.com or contact them at: 401-495-3100 or joe@anchorfinancial.com