Coming into money when you don’t expect it is always exciting, no matter the reason for the windfall. That money opens up many new possibilities, but it’s easy to go wild and waste the lot. No matter how much money has fallen into your hands, you need to have a plan. Whether it’s a life-changing amount or something that will simply give you some financial breathing room, managing your windfall intelligently is vital. If you don’t want to watch your windfall dwindle unnecessarily, here’s what you should be doing to get the most from that unexpected cash so that you don’t look back and regret how you spent it.
Take Stock
You mustn’t start spending immediately. Rash decisions will see your windfall quickly wasted. Always pause before you start spending and don’t make any big purchases immediately. Financial advisors will often advise you to wait at least six months before you spend any big chunks of your windfall, and that’s a good rule of thumb to live by. Lottery winners often fall into the trap of irrational decision making, and that needs to be avoided as much as possible.
Save or Invest
High-interest savings accounts can help ensure that your money is safe and that your base total can grow. This will depend on the amount of money that you have to play with, and many people find that those high-interest bank accounts do not offer a good enough return. Investing your money to make more money is always a smart idea, but you’ll need to know what you’re doing. You could invest in people, or start trading foreign currencies, and you’ll find that your potential to profit from your windfall is much higher. Get a broker and make sure that you know how forex works. By educating yourself, your windfall could grow even larger. There are lots of investment options available, so make sure that you know your options before you resign yourself to low-interest rates from banks.
Use an Expert
Your best step will be to get a financial advisor. That’s because they can help you make the most of your windfall. They will also ensure that you have paid all of the relevant taxes, which can be easy to forget about when you’re busy planning what to buy. No matter how much money you have received, there’s a good chance that it will be considered as income (many lottery winners forget this fact and are financially punished for it). That means it will need to be taxed. Some windfalls are not considered as income, so it’s best to get professional advice from an accountant or financial advisor before you get yourself into legal trouble.
Treat Yourself
In amongst all of the serious financial advice, don’t forget to treat yourself, you don’t have to go wild and buy yourself a yacht, but don’t get too tied up in the serious side of things. An unexpected windfall is a positive thing, and you are allowed to have some fun with it. Set yourself a spending limit and stick as close to it as possible. Take a holiday, upgrade your car, or do something fun with your home.
Unexpected cash can change your life. Make sure that you approach your windfall sensibly, and it could change your future more than you ever thought possible.
