Here's What You'd Do With a Surprise $500

Imaginary windfalls are always a good what-if game. What would you do if you suddenly acquired $500? If you found it, you're supposed to try to return it, but if you keep it with no strings attached, you're actually most likely to make good use of it.

Researchers from the Federal Reserve Bank of New York, the University of Chicago, and Arizona State University asked more than 2,500 Americans how they would spend an unexpected monetary gift. For those worried about the state of personal finance education, the news is good. Three-quarters of survey participants said they wouldn't adjust their spending if they suddenly acquired $500. In other words, the majority would save or invest that money.

For those who would spend it, the news is actually still good. At $500, respondents went for quality-of-life purchases such as vacations, dining out, and charity. But as the windfall increased, the more likely respondents said they'd spend on "durables," big-ticket buys like home renovations, professional development, or college tuition. Those are more likely to increase your value in the long run, either as a homeowner or an employee looking to move up in the world.

On the opposite end of the scale, we're still largely financially responsible. A sudden loss of $500 would prompt almost half of us to reduce our spending in other areas. Survey participants who said they'd keep spending as usual may have said so because they can absorb such a loss, which may be a net positive in the end. External trends can be rough, but we're muddling along better than we think.