More often than not, you will find “come into a large sum of money” on a person’s wish list. And it is probably somewhere near the top. That’s certainly one way to come in to wealth, and for some it can become a very real problem.
“But wait, how can that be? Having money is the big idea!”
True, but if you’re not careful it can easily turn a dream come true into a legal nightmare. In today’s post, we’ve gathered a few helpful tips to help avoid the potential pitfalls of coming into a large sum of money. Whether it’s your tax refund, that lottery ticket, structured settlement, or anything between, these tips should help provide some peace of mind.
Don’t blow it on trivial items. And wait.
This seems like a no-brainer, but it made the top of our list for a reason. Often, when people suddenly come into a large sum of money, it’s impossible to resist the urge to scratch that itch we’ve all felt when looking at a top-dollar item. It’s only natural to want to go out and get that nice car, or big television you’ve been pining for. Resisting this urge is one of the most important tips, along with the idea to wait.
After a few months, it’s okay to start thinking about what you’re going to do with your new found wealth. It’s important to remember that you are still you, and that your personality doesn’t suddenly change despite the figure on your bank account. This is key to staying out of debt, out of bankruptcy, and out of trouble. Which brings us to our next point…
Your lifestyle should reflect your income, not your wealth.
Whether you have $20 in the bank, or $20,000, always remember that spending and saving habits should reflect what you’re earning. If you’re not earning anything at the moment, you should be working to eliminate expenses wherever possible. If you are doing well, you should be working to save as much as possible in case a “lean year” happens to fall into your lap unexpectedly. Planning for the future is key! Which leads us to…
Make your money work for you.
Investing your money can be tricky. But, if done correctly you can make your money work for you to help secure a better future for you and your loved ones. Setting up Roth IRA’s, 401k’s, trust funds for college funds and retirements, and savings accounts are all perfectly viable options for ensuring that your money stays safe and lasts your lifetime and then some. It’s the kind of peace of mind that no car or television can ever offer.
Of course, we recommend seeing a financial advisor before pursuing anything! Everyone has different situations that fit best for them, so it’s always best to seek counsel in financial matters before moving forward.
Control the urge to tell the world about it.
Not everyone needs to know about your money situation. The kind of attention drawn by newly-acquired wealth is often not glamorous. Alternatively, just because someone comes from a background of wealth doesn’t mean they should be treated any differently. Remember, money is just one measure of success and is no indication of fulfillment. As long as you’re moving forward, you’re moving in the right direction! And that is what’s important.