Monday, July 3, 2017

So You’ve Come Into Some Money - What Now?

So, you’ve experienced a windfall? For one reason or another, you’ve come into some money. Whether your inheritance has just come in, your boss has given you an amazing bonus, or you have won big at the bingo, the chances are that while you are super excited and somewhat relieved to have come into some money, you are also slightly anxious about what to do with it.
On the one hand, you would love to go crazy treating yourself and your family to this, that and the other, but on the other hand you want to be savvy with the money that you have come into. After all, how often do windfalls come in? Windfalls don’t come in that often. This means that spending the money wisely is vital; else you may live to regret it.
Of course, the question is, how do you spend the money that you’ve come into wisely - how do you ensure that it’s not all gone within a short period of time? The fact is that most people who receive a large cash sum lose it within the space of just a few short years because they aren’t wise about how they use it.
To ensure that you don’t fall foul to the same outcome, take note of the tips and advice below.
Speak to a financial advisor
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A mistake that people who come into money tend to overlook is the benefit of working with a financial advisor. The fact is that when you receive an unexpected windfall, it can lead to you going on a rollercoaster of emotions. At first, you feel excitement and relief, then anxiety over how you will spend the money, then happiness and excitement again - the emotions that you will go through after coming into some money change constantly. That’s why it’s a good idea to speak to a financial advisor, who can help you to ensure that you think each purchase or investment through. If you are going to look for a financial advisor, aim to find one that specializes in the management of sudden wealth, as this should help to ensure that you spend every penny wisely. A financial advisor can help to remove some of the pressure from you, and make your windfall more enjoyable and less stressful to manage. No one thinks that coming into money can be stressful, but the fact is it can be.
Pay off your debts
Paying off your debts might seem like an obvious step to take when you come into some money, but you would be surprised at how many people don’t think to do this. The problem is that coming into some money can mess with your perceptions and priorities, making it harder for you to determine which financial obligations are more important than others. A good way to look at things is to think of the money that you’ve come into like you would your normal income. Ask yourself, what do you use your monthly income for, then use some of your windfall money in the same way. The first step should be to clear any debts that you have, whether that’s credit card debts, personal loans, or medical expenses that need paying, now is the time to clear them. You’ve come into some money, which means that you’ve got no excuse for being in debt. Clear your debts, and you will feel much better for it.
Take a vacation  
What’s your dream vacation destination? Have you always dreamed of jetting off to Australia, Hawaii, or Italy for an extended vacation? Or, have you always wanted to spend a few months traveling around the world in a camper van? Whatever your travel aspirations, now that you have come into some money, this is your time to make them a reality. If you are going to spend your windfall on anything, putting money into a trip of a lifetime that you and your family will remember for many years to come is a fantastic way to spend your funds. If you’ve always wanted to see more of the world but could never afford it, now is the time to make your dreams come true. Don’t rush the process and book any old trip, take the time to research the different destinations carefully, planning your trip in detail to ensure that it’s as amazing as you always hoped it would be.
Save, save, save
While it’s fine to pay off your debts and plan a trip with your family, it’s also important to make saving up a priority. Put a certain amount of your windfall into a high-interest bank account and make it your rainy day fund. Ideally, you want to put away at least six months living expenses, if you have enough money to do that, that is. By putting away around six months living expenses, you can ensure that no matter what life throws at you, you have a safety net to fall back on until you are able to get back on your feet. You don’t have to put all of your money away, but it makes sense to put a certain amount aside, to ensure that you have a safety net to fall back on, should you need it.
Consider investing
If you are keen to make your windfall last for many years to come, choosing to invest part of it could be the answer. The fact is that many investors make thousands, if not more, by investing a small amount of funds in a stock or share that has the potential for big growth. Another option, if you are keen to invest your funds but don’t want to buy stocks or shares, could be to invest in property of some sort. If you are going to invest a percentage of your funds, it makes sense to do so wisely. What this means is utilizing resources like financial investment blogs, such as The Fortunate Investor, talking to your financial advisor, and taking the time to do your own independent research. If you are going to invest your funds or a percentage of them, it makes sense to think carefully about any options that you have, and to only invest in investments that are classed as being low-risk.
Improve your home
A great way to spend your windfall is to invest it into your home. If you don’t already own a home, now could be the ideal opportunity to invest in a property of your own. As long as you can afford to run a property, that is. If you already have a house of your own, now could be the perfect time to improve it and add value. To add value to your home, the best improvements to make are things like extending the property and adding more bedrooms and bathrooms to it, making your home greener with features like solar panels, and doing up any areas that are looking a little run down or worse for wear. By investing in your home and improving the property, you can add value, meaning that should you ever choose to sell up, your home will reach a higher value.
Invest in your children
To ensure that your children have all of the best opportunities in life, consider investing in their education. This could mean sending them to a better school than they are currently attending, perhaps a private school? This could mean signing them up for various extra curricular activities that you could not previously afford. Or, it could mean putting money aside for your children to attend college or university in the future. If you want to ensure that your children get the best start in life thanks to having an incredible education, investing in their education is crucial.
Launch a business
Have you always dreamed of launching a business of your own? Are you keen to give your entrepreneurial dream a chance? If you’ve always wanted to start a business of your own but have never had the funds, now could be the perfect time to make a go of it. Whether you’ve always wanted to start a bakery of your own or run a social media business, now could be the ideal time to launch it. You’ve got the funds that you need, so why not? It might be scary taking the leap and launching your own business, but if you’ve got the money to do so, it’s worth doing it. If you have always dreamed of launching a business and don’t do it, the chances are that you will regret it.
If you’ve come into some money, knowing what to do with it can be stressful, as there’s a lot that you need to consider. However, if you take note of the tips and advice above, you can ensure that you don’t end up wasting your funds and end up regretting it. It’s easy to spend money aimlessly and then live to regret it, but you don’t have to make this mistake, it’s just a case of learning to be savvy when it comes to your spending, that’s all.

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