Ask Harry: What would you do if you won $10,000?

make it rain

Let’s be honest, we’ve all fantasised about winning the lottery and never work again/buy that Tesla/have a European summer holiday and boast about it on Instagram…

This week, we ask Harry what he would actually do if he won $10,000.

What would you do if you won $10,000?

So you find yourself the unexpected, but very grateful, recipient of $10,000.

Perhaps it’s your share of a deceased estate. Or it’s an end-of-financial-year bonus for having smashed your KPIs. Or maybe that quick pick saw your numbers come up in a Div four payout.

Whatever the reason, you now have 10 large that you didn’t last week and you’re ready to spend…spend….SPEND your way to a good time.

oprah making it rain

Before you book that holiday to zipline through the rainforests of Costa Rica or search for the perfect gelato in Rome, consider instead putting your new found wealth to work for you now so that your future self will be able to live even larger.

Here then are four ways that you might want to consider applying your windfall.

Pay down any outstanding credit card debt

Given that over 65% of Australians between the ages of 18 and 35 have at least one credit card, managing credit card debt is a key life skill you’re going to have to master. That means planning what and how much you put on your credit card so that you can pay off the outstanding balance in full before the due date each and every month (see 10 things to cut from your budget).

credit card debt

With credit card interest rates currently ranging between 12% and 19% per annum, if you’re running an outstanding balance on your credit card then you’re using one of the most expensive sources of finance available.

So if you have an outstanding credit card balance on which you are paying interest, and you’re struggling to clear it, then the first place to deploy your $10,000 (or as much of it as needed) is in paying off your card in full.  

Once you’ve wiped the slate clean, you should try to limit your credit card spending so that you can comfortably pay off the outstanding balance in full each month. Your bank may not thank you for doing so, but your future self sure will.

Start (or add to) an emergency savings account

Could you find $5,000 at short notice to cover an unexpected but necessary expense?

We’ve all been there. Your dentist tells you that aching tooth needs an emergency root canal. Or your car’s transmission refuses to shift out of second, and the diagnosis is that a full replacement is required. These things happen, and we shouldn’t be caught off guard when they do.

emergency fund

The problem is that most of us aren’t anywhere near prepared. A 2016 survey in the US found that only 37% of those surveyed had enough savings to cover a $500 or $1,000 emergency expense. A similar survey in the UK found that 40% of adults did not have 500 pounds available to them at short notice.

An emergency savings account is your first line of defence against financial stress.  It allows you to get out of a financial hole without resorting to credit card debt, borrowing from family or friends, or turning to payday lenders.

You should aim to have at least three months worth of core living expenses tucked away in an easily accessible form.

Not notes under your mattress-type accessible, but a low fee, at-call savings account. You’ll have to accept that this account is highly unlikely to actually deliver a positive return, but that’s not its purpose. It’s there to prevent you getting into a financial hole from which you may struggle to recover.

Put it towards your first home deposit

OK, so you pay off your credit cards in full each month and you’ve already got an emergency savings account rocking. Go you! How then should you use the $10,000 Aunt Beryl kindly bequeathed you when she shuffled off this mortal coil?

Well, that depends. Are you intending on renting that uber-hip pad in Newtown for the rest of your life? Sure the rent seems reasonable at $650 per week for a two-bedroom apartment, given the proximity to both work and a great range of weekend watering holes.

That same apartment may quickly lose its appeal when you’re lugging your newborn bub, her Maclaren stroller, Kapoochi nappy bag and six bags of groceries up three flights of stairs to your apartment. At which point a home may start looking a lot more appealing. If only you could come up with the $100,000+ required to put a 10% deposit on any sort of house in much of greater Sydney, that is.

first home

According to a recent worldwide report by the global bank HSBC, 83% of Australian millennials intend to purchase a home in the next five years, compared to less than 28% who have already done so.

As for the biggest single barrier to homeownership, 75% of those surveyed said it was saving for that all-important first home deposit.

If you’re not intending on being a lifelong renter, then the sooner you start putting aside some savings towards your deposit the better. Given the dire state of home affordability in Australia now, it’ll likely take you anywhere from four to ten years to accrue a sufficient deposit for a house.

With that sort of timeframe, and with high-interest savings accounts now barely delivering positive returns after tax and inflation, you may need to think outside the square to maximise the potential return on your savings.

Depending on your risk tolerance, you may find that a low-cost diversified investment portfolio, such as those available through Clover, may be more appropriate to your circumstances.

Bolster your superannuation

If you’ve got your use of credit cards under control, have a decent emergency savings account, and are on-track to that first home deposit, you should consider your longer-term financial welfare.

Retirement may seem like an alien concept to you at the moment, but the years do fly by.

You don’t want to be that person who realises, in their mid fifties, that they’ve left their retirement savings run too late.


Superannuation is a highly efficient way to build your retirement nest egg. Yes, it’s a savings one-way valve; once in the super system it’s pretty hard to get your contributions out again, but that’s because there are some ace tax concessions available within the superannuation system.

If you were to contribute some of the $10,000 to a superannuation fund, the fund would recognise it as an after-tax contribution (a contribution on which tax has already been paid). Therefore there would not be any tax imposed on the amount contributed.

Once in the fund, earnings on the amount contributed would be taxed at a maximum rate of 15% (as against your own marginal tax rate). If you’re born after 1 July 1964 then you can’t access your superannuation benefits before you turn 60, but when you do they will be tax-free up to some pretty generous limits (the main one being a new $1.6 million limit on the amount able to be transferred into a pension account tax free).

There is a limit to the amount of after-tax contributions you can make to superannuation each year. For the 2017/18 financial year that amount is now $100,000 so your $10,000 windfall would easily fit within this cap.



So there you have it. You could take the $10,000 windfall and splurge on that trip of a lifetime to visit the Blue Lagoon of Iceland. That would be wickedly cool (literally). Or you could apply it to getting your financial house in order.

One course of action involves immediate gratification while the others involve delaying the payoff for later.  The choice is yours. Use it wisely.


Who is Harry?

Ask Harry

Harry has over 20 years of experience in wealth management. In that time he has advised both individual and institutional investors. Previously a Certified Financial Planner, he now is a Certified Investment Management Analyst. So.. he knows his stuff.

When not making personal finance easier and less intimidating for Aussies, Harry loves his weekend bike rides and spending time with his wife and son. He’s pretty much the finance-savvy uncle you never had.

Got a question for him? Send him a question at and connect with him on LinkedIn.

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