What Do You Do If You Suddenly Come Into Money?
31 October 2006Get Rich Slowly has a good post on what you should do if you suddenly find yourself with a windfall of some kind – an inheritance, a lottery win, other random gambling winnings, or the like. It’s good advice to read over because there’s one big windfall not on his list that most people get, every year – a tax refund. You may not be the lottery winner, but come tax season, most people take that money and blow it on something fun instead of doing something boring and responsible with it. The post has some good advice on how to make it feel like you’ve enjoyed the money, even when you haven’t spent much of it. It’s an interesting subject – another blog points out that when people win multimillion dollar jackpots, 70% spend it all. Every penny. And one third of those people end up bankrupt. That’s not to mention the other problems you can get if your windfall is very big – from third-cousins twice removed who suddenly pop out of your family tree to people calling you up with sob stories. People have a sense that if you got the money by luck, they’ve got just as strong a claim to it as you do. Couple this with the fact that many people don’t know how to manage their money, and winning the lottery can end up ruining people’s lives. I think the single best piece of advice in the post is to wait. If you can hold off on spending it, and you still want that vintage guitar a month or two later – maybe that’s the most important thing to you. Hopefully reason will kick in instead, after you’ve had time to think about the practical benefits of saving it.
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