Winning the jackpot in a lottery is a dream come true. But before you go about spending your loot, it’s best to start a money management strategy right away. Otherwise your may find yourself flat broke in less than a year. Even if you don’t know much about money management, a quick lesson here could save your millions.
Money in the bank
The first thing you will want to do is get that money in the bank. You can’t do anything with it until you get it settled in. Usually it will be direct deposited into your account, or you can see your bank manager if you have a cheque. Depending on the amount of money you have won, you might want to spread your funds out in various interest-bearing accounts to reduce any risk to your principle win amount.
Talk to your bank or a financial advisor to see where you should put your money for the things you will want or need to do. Effective money management means that you will need some money in your chequing account to take care of bills and debts, money in accounts such as GIC’s (Guaranteed Investment Certificates) to generate some money through interest, and some money in other investments such as stocks, mutual funds, and such.
You and your bank or financial advisor will work on setting a budget. Even if you have millions of dollars you can spend, a budget is still necessary to make sure you don’t go broke. Both of you will examine what expenses you currently have, what proposed new expenses you may including the bank or financial planner fees, property taxes on a new house, proposed charitable donations, and spending money and retirement plans. A strictly adhered-to budget will keep you from going on a spending binge and using up most of your winnings.
Initially your advisor might tell you not to spend any money for about six months. This lets you get your head and emotions in check so you don’t make any hasty decisions on big ticket purchases. Take the time to calm down, relax, and get a good budget in place before you access any of your lottery winnings.
Once you have a budget in place and are ready to access your funds, consult with your advisor as the first thing you should due is pay off all your debts such as car and personal loans, mortgage, credit cards, or any other money you owe.
You and your advisor will also work on getting a will and other legal documents done up to protect your money in case something should happen to you or someone from your past comes back trying to claim all or part of your lottery winnings.
Did you know that obtaining a large sum of money out of the blue can cause both mental and physical stress on you? If you don’t do things to remain calm and collected you could inflict some harm to your psyche and body. Don’t just sit back and have steak and caviar three times a day on your new ten thousand dollar couch. Keep your lifestyle healthy and manageable. Stay or get physically active even if you just buy and use a treadmill or stationary bike, take up walking or hiking, go golfing, or window shop downtown. Eat a very healthy diet now that you can afford more fresh food and lean meats. Continue with or start up a hobby to keep your mind and soul active and stimulated.
And if you find yourself having any anxiety or other mental issues due to winning the lottery, you are not alone. See s professional to talk about the stresses, problems, obligations, or other issues that may be causing you distress.