If you have suddenly come into money, congratulations! After you’ve gotten over the initial wave of excitement, you’ll probably start to wonder how exactly you’re going to handle that wealth. The truth is that wealth management in general can be a tricky topic to navigate. However, this process is even more complicated when you find yourself dealing with new money or sudden wealth. Many people who are suddenly bestowed with a certain amount of money often deal with a great amount of stress, in fact there’s even a stress-related disorder linked to this type of event. While it can be stressful to handle sudden wealth, there are a number of tips that can make it much easier and give you peace of mind. With that said, here four such tips that will help you handle your newfound wealth.
Create a Team of Experts
If you want to handle new wealth appropriately, then the best thing you can do is to hire a team of professionals to help you. Make sure to ask others for referrals, this is often the best way to find pros that you can trust. Financial planners can help you understand what this new money means in your life and help you make smarter decisions regarding your future. It can be tempting to want to spend a lot of money once you come across sudden wealth, but these experts will be able to show you how saving some can benefit you a great deal in the long-term.
Keep it to Yourself
If you suddenly came across a great deal of wealth, your first reaction may be to share this information with friends and family. While it’s great to share positive news, one of the best things you should do is to keep it to yourself. You never know who will be looking to take advantage of your sudden wealth, so try to keep your newfound financial information private. While you may want to help out friends and family in need with your new money, this can be a slippery slope where you start making poor decisions for yourself just to try and help out others. Keep to yourself until you have developed a plan for your finances and created a new budget.
Make a Life Plan
Most financial planners are quick to provide you with a document known as a “life plan.” This can help you plan out everything from yearly expenses for your children to savings and everything in between. This life plan is often a simple spreadsheet. You plug in numbers and see what you need to save and what you can expect to spend. Something like this can really help you stay on track and see over time what this new money really means.
Don’t Make a Big Purchase Until You Have Put Money Away
If you come across sudden wealth, chances are one of the first things you will be thinking of is all of the fancy things that you can buy with that money. It is only natural to think this way, but a great tip to keep in mind is that you should put some money away before you buy anything big. Once you have invested or saved some of the money, sit down and think about any purchases you want to make. It will at least give you a few days to really think about the money, see how much you can put away for the future, and take the time to think about whether this big expense is worth it. You can always buy something later on, but you can’t go back and trade in that new car for a savings account.
Whether you just signed a new contract, received a surprise inheritance or won the lottery, it is important that know how to handle — and how to grow — your wealth in a responsible manner. Keep these tips in mind and you will find the process of handling sudden wealth is far easier on you and your family.