Be Careful Not to Double Count Your Money

by Ryan Guina

What do you do with an unexpected windfall? Do you immediately start thinking about what you can do with it? Some people already know exactly where any extra money they receive will go, but many people don’t have a plan.

My wife and I received an unexpected check in the mail this week. It was a homestead property tax exemption rebate for a couple hundred dollars. Most of the time when people receive a couple hundred dollars they aren’t expecting, they immediately wonder what they should do with it. Maybe it should go toward debt, home improvements, savings, or possibly a hobby?

Any time I start thinking like that, I have to remind myself not to get carried away. I have a very good friend who is very guilty of always double counting his money, and as a result, he never has any.

What do I mean by double counting? Every time he receives any money (paycheck, gift, bonus, or unexpected windfall) he starts thinking about all the things he can do with it.

Typical conversation: “Hey, did I tell you I got a sales bonus this week? Yeah, the extra couple hundred dollars is pretty nice. I can pay car insurance for a couple months, or get a few new X-Box 360 games, or get new tires for my car, or buy the new iPhone…”

He continues to list off all the things he can do with his newfound wealth. Pretty soon he starts to believe he can do all those things with his money, when at best he could only afford to do one or two of those things. In his mind, he already allocated that money to buy those things. Because he convinced himself his little windfall was a big windfall, he ends up blowing all his money and wondering where it went.

There are other times when people need to be careful of double counting their money. It is even easier to double count your money when you receive recurring payments such as a settlement, pension, disability payment, etc. When you know you will continually receive money and no longer have to work for it, it seems like easy money and can be taken for granted. Too many people start dreaming and scheming, and lose sight of the fact that the money can only be used once.

I know many people who receive a pension from the military or other sources. When some of them start planning for their retirement, they talk about all the things they can use the money for.

Typical conversation: “Oh, I know it won’t be enough for me to live on, but an extra $1,500 every month is a nice house payment, or college tuition for my kids, or I could use it to redo the house, or…” fill in the blank.

It is easy to get carried away thinking about all the things you can do with money – especially money you weren’t expecting. But you need to take a step back and evaluate your situation. The next time you receive a windfall, large or small, take some time out to plan what you will do with it. And be careful not to double count it, or you might just spend it and not even realize it is gone.

Published or updated September 20, 2007.
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{ 4 comments… read them below or add one }

1 plonkee

I’m very aware of doing this all the time. Its so easy to think that the sum total of all possibilities is great without remembering that you can only do one of them.


2 William Brooks

Yeah this is so true!

When I get unexpected cash, I like to use that has an opportunity to invest is some money making venture. This can be retirement accounts, stock market, current businesses if you have one… etc..

I also think it is important to take maybe a small chunk and spend it on something you want. maybe take 20% tops!

What do you all think?


3 Ryan

Hi William,

I think that is a great idea. I try to save/invest unexpected money as well. For those with debt, paying debt down may be the best idea.

And it never hurts to treat yourself to a little something every now and then either! 😉


4 Ryan

Hi Plonkee,

It is very easy to let your mind wander with the spending possibilities. I think I have finally mastered the art of not doing it. I just wish I could explain it to my friend so he will understand!


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