There could be a time in your life when you are given an unexpected amount of money. It might be a relative or friend leaving you something in their will, or perhaps a lottery win, for example. How you get the money is not the important part; what you do with it is. If you’re not careful, you could spend everything before you even realize what you are doing, and any plans you might have had won’t come to fruition. It’s good to have a plan in place so that you can make the most of the money that has come to you.
Don’t Do Anything
When you are first given a lot of money, it will be exciting, and you will be tempted to spend and spend, enjoying yourself immensely in the process. Although there is nothing wrong with this, you might easily overspend and then be left with nothing, only to regret the spending that you once enjoyed.
So the first thing to do when you get some money is to do nothing at all. Take this time to pause and reflect, working out exactly what you need to spend on, how you are going to treat yourself (because that is important), and what you might invest in.
Pay Off Debt
If you have any debt, even if it isn’t that much or something that is causing you financial difficulties, paying this off first is important. The more you can pay off, the more money you’ll have available each month, so even when you have spent all of your money, you’ll still have a better monthly income.
After this, it’s wise to put a little of your windfall into a savings account. Ideally, you should have at least one month’s worth of outgoings saved up in case you need it.
Start A Business
When you have more cash than you are used to, you also have more freedom, although you’ll need to use it wisely. One of the things you can do with your money is to start a business and invest in your future. What’s really wonderful about this is that you have a tremendous amount of choice in what you do, from purchasing amusement rides for sale and renting them out to others to starting a bakery if you love making exciting cake creations to becoming a driving instructor, and you can take your time (within reason) in getting it right.
Having money to invest in your own business doesn’t mean you should just spend without thinking, however. You still need to look around for good deals, as this will be what you need to do in business in general.
Being strict with money is almost as bad as spending too freely – there must be a good balance. Therefore, you should certainly enjoy the money that you have, even if it is just a small amount out of the whole.
Ideally, you should split your windfall into half. Put half away for the future, or use it to pay off debts or invest, and use the other half to have fun with. Of course, it will depend on how much you receive and what your debt situation is like and so on, but this is a good rule of thumb, to begin with.