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Sudden Savings: What to Do With a Windfall

Congratulations – you’ve just come into a nice sum of money. Maybe you won the lottery, received an inheritance from a long-lost relative, or got an unexpected bonus at work. However you came by your new funds, you’ve now got more money than you expected to have at this point in time. It could be a few thousand or maybe even millions if you’re really lucky. Your first instinct might be to rush out and spend it all, but consider the downfall of many a lottery winner before you do. You want that money to improve your life for as long as possible, not ruin it.

Don’t Touch It Yet

Coming it a lot of money can be pretty exciting. You can hardly contain your excitement and immediately start thinking about all the things you can do with it. But don’t touch it just yet. If you spend it right away when you’re still reeling from even having it, you might regret what you choose to do with it in the future. One idea is to just get used to the idea of having the money for a while. It doesn’t have to be that long; perhaps a couple of weeks or a month or two. It helps to give you enough time to start thinking about how best to use the money, instead of frantically spending it.

Get a Financial Planner ASAP

If you’ve received a large sum of money, you might be struggling to decide what to do with it. Maybe it’s the most money you’ve ever seen in your life, and you can barely even think of how you might spend it, or whether to save or invest it. If you need help, get a financial planner or use a wealth management service to make things easier. A service like the one from Partridge Muir & Warren will take your needs into account to make sure your money goes far. They can help you make sensible decisions and even manage your money for you based on your wishes. Without a professional to help you, your new assets could start to dwindle much sooner than you had hoped.

 

Consider Paying Off Debts

The first thing you might want to do with a windfall of cash is think about how you can immediately improve your life. This is likely by paying for something like a debt that needs to be paid off or anything you’ve been saving up for. Depending on how much money you have, these costs could range from credit card debts or school supplies for the kids to student loans and your mortgage. You might not want to spend all your money paying off debts, but it could be worth it if you don’t have that much money in the first place.

Do Something Nice for Yourself

It’s best not to go crazy spending all your money on fun things. As much as you might want to go travelling, get a shiny new car, or even buy a house, you should make sure your money is doing as much good for your life as possible. However, you should still be able to do something for yourself. In fact, it’s a good idea to split your money into three – pay off debts with one third, save one third, and spend the rest on whatever you want. Treat yourself to a trip away, some designer clothes, or the latest gadgets.

 

Do Something Good for Others

Another thing to consider is how your money might help other people. That could mean people close to you, like friends or family, or it might be people you’ve never met. If you’d like to do something altruistic with at least some of your cash, think carefully about how it could best be used. If you want to give some to friends or family, consider how you want to approach it. Do you just want to give them some cash, as a one-time offer, so they can do what they like with it? Perhaps you want to offer to pay a certain expense for them. If you’re thinking about what to do for other people, a charity donation could be a good idea or, if you have a lot of money, even starting your own charitable initiative.

Squirrel It Away for Later

Of course, saving your money for later is always a good option. You might put it in a savings account or perhaps invest it to try to grow your money. You don’t have to save all of it, but you could regret it if you spend it all right away.