In somewhat of a rather unfortunate turn of events, we hear a bit too often about people who became millionaires overnight going on to lose their rapid fortune, with some of the worst cases of this happening entailing people who ended up worse off than they were prior to the arrival of their big windfall.
This applies to all scenarios in which a huge windfall suddenly befell someone who’d previously not been used to having such large sums of money at their disposal, including an inheritance, a payout on some or other insurance policy or even winning the money through something like picking the right numbers while taking a chance in an online lottery. The most common case of this is with people who win the large sums of money they come into, but it still happens a bit too often for those whose huge windfall came through something like an inheritance. So, as much as big winners of something like a lottery beat crazy odds to wake up to the news that they chose the winning set of numbers, the statistics surrounding how their lives turn out going forward generally don’t make for the best reading.
So how should you go about handling your big windfall if you don’t want to be just another statistic?
Wait before you start spending ANYTHING
Look, the urge to immediately go on a wild shopping spree once the lotto winnings have cleared in your bank account will probably be very overwhelming, but you should resist spending even a single dime of your winnings immediately. Wait a while and think about things a bit. It may take a while to sink in, but it’s important to delay spending anything until you’ve gotten yourself into the right frame of mind. If your sudden windfall came just at the right time for you to perhaps pay off some urgent bills, still, don’t let this compel you to spend anything yet. You can always get your bank to guarantee your impending payments, but it’s important not to start spending because once you do, you probably won’t be able to stop until it’s a bit too late.
Get financial counselling
This is the first thing you should do after receiving your windfall, which forms part of financial planning. Again, don’t spend any of the money you’ve just come into to pay for the services of your financial planner — just get a bank guarantee that you’re good for the payment. The aim is not to touch any of the money until you’ve mapped out a detailed plan which will ensure you don’t end up in a worse off financial situation than you found yourself in before the big windfall.
Pay off all your debt
Once you’ve detailed a plan for investing some of the money in a way that will ensure you never run out, proceed to pay off all your debts. Don’t leave this until after you’ve had your big splurge because again, once you start spending it’ll be very difficult to stop.
When all your investment channels are set up and all your bills are paid, you can go just a little bit crazy and spend some of the windfall on what your heart desires most.