Save, Invest, or Pay Off Debt?

Suppose you happened upon a substantial amount of money all at one time. For discussion purposes, let’s say it was $10,000.

What would you do with this money? There are really five options available to you:

  1. Spend it
  2. Give it away
  3. Put it into savings
  4. Pay off debt
  5. Invest it

Most people will be faced with this type of situation at least once in their life. Here are some thoughts to consider with each option.

1. Spend it

This would certainly be a fun option! The money could be used to make much-needed home repairs, purchase a vehicle, or take a vacation.

2. Give it away

Being able to give $10,000 away is an incredible option! Consider the impact you could make on the world around you by giving money to support causes you really believe in.

3. Put it into savings

Financial margin provides something I call “financial confidence.” When I first achieved financial margin, it was as if scales literally fell from my eyes. I was able to “see” opportunities like never before.

4. Pay off debt

Debt increases a person’s operating costs and requires more income. If the debt is associated with a no-value or declining value item, it is literally the equivalent of “robbing yourself.”

5. Invest it

What if you could use the $10,000 to start a business that will produce $4,000 of income each year for the next 40 years? Consider the investments you might be able to make – it could literally change your life!

Your thoughts are appreciated. What would YOU do?


  1. Pam on June 12, 2013 at 7:39 am

    Invest, Invest, Invest!!!!!

  2. Mike on June 12, 2013 at 8:25 am

    I would use it based on where I am in the IWBNIN plan. Our family is currently working on step 3, our emergency fund of 3-6 months of expenses. $10,000 would finish that off nicely!

  3. aybehrens on June 12, 2013 at 9:17 am

    First, I would hold onto it for a while before deciding what to do with it. I do want to spend it wisely. Then, I would pay off existing debt, and invest the rest.

  4. Tanya on June 12, 2013 at 9:39 am

    I recently received such a blessing. I paid off my debts because I was literally living from pay check to pay check and the rest I put in savings so I never have to live pay check to pay check again and when repairs, etc are needed, I have the money without having to borrow money for it.Later I’d like to invest some of it but for now I’m happy not to have to borrow money any more.

  5. Travis on June 12, 2013 at 1:02 pm

    Where I am right now, I would do a little of each:

    $1000 to give away.
    $2000 into the Emergency Fund (just to pad it a bit)
    $1000 to take my family on a little vacation/getaway
    $1000 to put away in my “investment in future business” fund
    $5000 to know out a couple more debts on the snowball

  6. Jenny on June 12, 2013 at 8:34 pm

    I am looking at a close scenario to that. I am downsizing to have my mortgage paid off before I turn 65 in 5 years. However the options are to live in 440 sq ft at RV park (I own the lot) and still have $10-20,000 mtg (spend the next 5 years living on edge to pay it off, or sell and downsize one last time in 5 years)or buy smaller yet and live in actual 5th wheel with no mtg. Praying about this. I landed on disability over a year ago and lost money on house sale so God has put me in a different place than I expected. HELP!!

  7. Stephen at SE on June 13, 2013 at 12:11 pm

    I think that is a great discussion. We had to put in place some systems for ‘found’ money because it always seem to mysteriously disappear. Money that wasn’t in our budget found a way to leak out a little.

    At this point, 10k would go strait to attacking the mortgage. We can’t wait to have it paid off!

  8. Scott Bryant on June 13, 2013 at 12:13 pm

    Well, Joe, funny you ask this question. If one won the lottery, what would they do with it? I think everyone here has had the ho-hum conversation about what they would do with the winnings. But you bring things more into light with just 10K. Yes, it would change a lot of people’s lives only if they spend it properly. I recently received about half this amount in a tax return and I put every dime of it on my debt and never looked back. I was able to rip quite a few pages off of the “bottom” of my debt free calender.

    Joe, are you getting ready to give 10K away? If so, I would pay off the rest of my debt, start my emergency fund and I would take 1000 to 1500 of it to give others the help they need to get their finances straight. No, I would not help pay off their debt, I would take them to dinner with it and use that as my opportunity to tell them how to get out of debt. It has been on my heart lately to help others understand that they really can live a better life by restructuring their finances. I talk to all of my friends about IWBNIN and send them the link to the budget plan to get them started. Thanks for this discussion and I look forward to my cashier’s check for 10K….LOL

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