A great use for your windfall, or part of your windfall, can be to pay off debt. But this isn’t always the case, since not all debt is created equal. It’s almost always a good idea to pay off high-interest credit card debt, but paying off low interest debt, such as your mortgage, isn’t always the best financial choice in the long run.
Though there is risk involved, if you invest your money, you may earn more than you would save by paying off your mortgage. The right choice for you will depend on what type of debt you have and what you would be doing with the money if you weren’t paying off debt. For example, paying off your mortgage would almost certainly be a better long-term choice than spending that same amount of money on an extravagant vacation or a new car.