Knowing how to make a little bit of money go a long way is key to enjoying life on a budget. But what would happen if all of a sudden a lot of money suddenly came into your life, like, what if you won the lottery? All of a sudden, you’d have more money than you’d ever had in your life. And that carefully crafted and closely hewn budget? What would happen to that? With a lottery jackpot in the bank there’s no more worrying about money, budgets, and the like, right?
Of course, fantasies about winning the lottery are filled with nothing but good things. But, we’ve all read the cautionary tales of lottery winners spending their money in foolish ways and ending up broke, or worse. While it might seem that a jackpot win is a free pass to spend, spend, spend and never worry about money again, the truth is that it’s not.
The good news is that there are things that you can do to enjoy your lotter winnings responsibly and ensure your family’s financial security for generations to come.
If you don’t have to go public with your win, don’t. Do everything you can to claim your prize anonymously. Lottery winners instantly become the focus of a lot of attention. All of a sudden, long lost relatives and friends will come out of the woodwork looking for money or a little bit of help. There are scammers and con artists who will try and take advantage of you and your winnings, as well. The less the public knows about your winnings, the better.
Don’t Change a Thing
OK, you can make a few small splurges, but do set aside a fixed budget for these. The idea here is to not rush out and by an Italian sports car, yacht, or any other big-ticket items for the first six months after your win.
Keep living the life you had been living to give yourself a cooling off period, if you will. This will make it possible to decide, rationally decide, what you’d like to do with your sudden windfall in a more sober and collected frame of mind.
Get Out of Debt
Here’s one thing you can do on day one of being a lottery winner; pay off all your debts. Credit card, mortgage, bar tab, whatever. You’re a lottery winner, there’s no reason to pay interest on these debts anymore, get rid of them.
This one is a little tricky because you’re going to have to discern who has your best interest at heart. However, one thing to avoid is letting one advisor fill in the rest of your team. You have every right to pick your own lawyers and advisors and insist that they work together.
Once your team is assembled, their job is to help you come up with a plan for your money, assuming you don’t want to squander it right away.
Make a Budget
Yup, we’ve come full circle. Set a budget for yourself so that you’re living off the interest and income that your money earns and not spending the principal. This will ensure that you will have wealth and income for generations to come, or at least until the end of your life.
Win the lottery and you can live the good life without having to worry about money, as long as you follow a few easy steps. Fortunately for you budget-savvy shoppers and serious savers, you’ll already be a step ahead of the rest.
***Disclosure: This is a guest post in collaboration with The Lotter. Please refer to our Disclosure Statement for further information. ***