You've just received a large amount of money, now what?
It’s a dream that everyone has – waking up one day to learn that you’re a lot richer than you were the day before. Whether this newfound wealth comes from lotto winnings, an inheritance, or even getting a better job, the feeling of having more money is exciting – but it can also be dangerous.
As soon as a person finds out that their income has increased, they start making plans for that money, often before they can even access the funds. By the time the money actually falls into a person’s hands, it may already be mentally spent.
If you’ve just received a large amount of money, or you’re likely to in the future, the first thing to do is to not do anything – yet. It may be very tempting to start paying off bills, planning vacations, or looking for a bigger house, but by rushing into decisions, you risk the chance of making financial mistakes that you may regret later. Let’s take a look at a few steps you can take that’ll help you make well thought out decisions regarding your increase in wealth.
- Keep the news to yourself for a while. While it’s exciting to learn that you’re going to be receiving a lot of money, the more people you tell, the higher the number of people you’ll have asking for their share of it.
- Contact a qualified financial expert who has experience in wealth planning. This kind of service isn’t free, but the advice you will receive will be invaluable to making your money last.
- Before you meet with a financial planning expert, make a list of things that you need to do with your money right away (pay down bills, fix a broken car, etc.), and also a “dream” list of what you’d like to do with your money. This way, the expert can have a starting point to show you what is and is not going to be feasible.
- Don’t forget about retirement and future expenses. One of the biggest mistakes that can be made is forgetting to save any of the money for later on in life. Again, a good financial expert can help you with future planning.
Whether it’s a little bit of extra money or a lot of money, proper planning is essential to making smart financial choices. More money is always an exciting prospect, but making your newfound wealth last is even smarter!