Whether you’ve landed your dream job with a high-paying salary, inherited an estate, or just hit the lottery, coming into a windfall of money can be challenging to navigate on your own. There are a few steps to take to help ensure that money is well taken care of.
Initially, it’s important to connect with a financial advisor and find someone to work with that you trust. These professionals are in the business of helping others build a financial life, achieve goals, and manage the unexpected. An advisor will help you to define your financial goals and put a plan in place to stay on track and reach them.
Even though you’ve gained an influx of money, it’s still essential to develop a foundation and stick to a budget. Determine how much can be spent on monthly expenses, how much to save and how much can be allocated to discretionary funds. Creating and maintaining a budget is one way to have success and ensure that the money lasts longer than the excitement of when it came into your life. It’s challenging to make progress towards goals if you don’t know where your money is going.
In addition, surround yourself with people that have your best interests in mind. With an increased net worth, all types of people can come out of the wood work to “support” you, however not everyone will, and some people may even want to take advantage of you. Being savvy about others’ ulterior motives is a difficult reality to face when you have a high net worth, but necessary.
While it’s easy and natural to want to help family and loved ones financially, you do have to put your financial well-being first. Once you have your financials taken care of, you can help parents, loved ones and even charitable organizations that you may want to support. But, you can’t build a house without a sturdy foundation.