An unexpected, sudden downpour of cash is everyone’s wish and if you are one of the lucky few to actually get it, you must be on cloud 9! You have every reason to feel on top of this world. This gives birth to the sudden urge to spend, spend and spend lavishly and do whatever crazy, long-time fancies you nurtured. But spending extravagantly stands you a very high chance of going bankrupt and repenting all your life. So hold on, pause, and think before acting:
Take a Break:
Between all the exhilaration around you, stop yourself, take a break and THINK! This sudden acquirement might tempt you spend, but taking a break will stabilize your energies and a lot of overspending can be avoided. Once you are calm, move on to the next step.
Jot Down Your Needs and Wants:
Cash windfall can be a golden opportunity to fulfill the needs you had for long. Sit and jot down all your needs, the work which was pending due to shortage of cash, and make a clear list. It could be paying-off debts, buying a car, investing, buying a new home or for your next vacation. Having a point-by-point list will make money management easier.
So your list of ‘needs’ is ready, but separating needs from ‘wants’ is a tricky act. Surely there are so many things you always wanted to own but if you don’t want your cash to give a blink-and-you-miss appearance, you ought to prioritize. Out of all that you need, see what things are urgent, and what can be delayed for a while. Stick to it and spend wisely.
The sooner you pay off debts, the better. This cash can be used to pay off debts which otherwise seems almost impossible to clear. But you need to be alert as prioritizing here is equally important. Pay off urgent debts first and leave the ones which can be deferred for some time.
Fun is as Important:
Don’t deprive yourself of the fun you can have with your sudden ‘lottery’. Keep aside a certain portion, say 5-10% of the total acquired wealth for entertainment and leisure depending on the amount. Go out, shop, watch movies and pamper yourself, after all, not everyday you get this lucky!
Investment is a smart strategic choice which will prevent your money from getting lost midway. You should invest in options which are long-term i.e. which cannot be withdrawn as and when you wish, like, fixed cash deposits, mutual funds etc. Also set up an emergency fund for a minimum of 7 months in case you need the money later in life.
Take Expert Advice:
Consulting an expert on matters related to finance is an intelligent step because they can help you organize your funds, prioritize them and can give you the best possible advice on investment, taxes and the best possible way to go about it.