Congratulations! There’s nothing more rare, nor more versatile, than free money. It isn’t likely that wealth will simply fall into your lap overnight, so if you’ve been lucky enough to receive an unexpected financial boost, you’ll want to make the most of your extraordinary lucky. Whether large or small, getting an unexpected windfall can be hugely exciting, and if you manage it well it can be a great boon for you and your family.
That being said, while it certainly sounds like the best possible problem to have, receiving a windfall can actually be a huge source of stress and strain in your life. The pressure of rapid change and even sometimes a sense of guilt can sneak up on you and turn what should be a joyous stroke of luck into a burden. The trick is to keep your head, stay calm, and don’t get carried away. Here are a few worthwhile tips to make sure that your wonderful luck stays that way.
Pay Off Debt First
Before you do anything else, make sure that you are debt free. This will save you money in the long term, even if it leaves you with a little less extra right now. Look out for your future self!
Treat Yourself – Just a Little
The best way to deal with a windfall is to use it to put yourself in a stronger financial position that will last in the long term and improve your life incrementally for years. That means you probably won’t be buying a boat, or a villa in the French countryside. It’s never worth it to go wild and spend your windfall all at once, but you should still take a moment to congratulate yourself. Something wonderful just happened — you’ve earned a little fun! Setting aside time to take yourself and your family to a nice dinner or buy yourself a modest new gadget that you’ve had your eye on will help make this exciting moment more fun, and keep you from feeling deprived when you go on to act responsibly and conservatively with your new money. You deserve a little bit of fun, or else you may be tempted to cheat later on.
Don’t Change Your Lifestyle
The worst thing you can do, however, is to make sudden, drastic changes to your overall lifestyle. Even if you windfall feels like grand riches, you may be shocked how quickly you can run through it and be left in a worse place than when you started. Dramatic changes to quality of life are almost never sustainable. In fact, you’ll find you get much more long term happiness by setting yourself up for year’s worth of a stable, stress-free financial life with careful, modest increases is lifestyle. Choose the areas that you know will make you the most happy. Perhaps you love eating at adventurous new restaurants, or taking a small vacation every year. You know yourself, so find what gives you the most joy and use this new money to give yourself a long term gift.