When lottery winning amounts get high, people start to think of ‘what would I do’ with a financial windfall. Plenty of ideas emerge, often starting with quitting a job, which may or may not be the best idea. It could mean buying new home, new vehicles, or travel. Many people would become much larger donors to favorite charities or help family members.
Very few people win lotteries, but on occasion there may be a financial windfall or a large sum of money that unexpectedly comes into a household. What should people do?
First, put the money into a safe, liquid investment such as a money market fund and take a look at the financial situation. Take time to plan before you spend or invest.
Start by seeing a financial professional, like a certified public accountant, and analyze the tax situation. A big portion may be owed in income tax.
Create a budget or spending plan. No matter what the size of your windfall, paying off debt first before investing is a smart move. Take time to consider any investment options carefully. One of the bigger challenges will be to guard against people who offer get-rich-quick schemes or otherwise want to share your windfall.
An estate planning attorney needs to be consulted too, to create or update wills and other necessary documents.If you plan well and control the urge to spend lavishly, your good fortune could provide financial security for many years.