Smart Ways to Spend Your Lottery Winnings
Recently updated on January 2nd, 2024
Winning large amounts of money from the lottery is arguably one of the best feelings in the world. However, the average person isn’t used to having access to hundreds of thousands or even millions and therefore need proper guidance and sound financial advice to manage it well. Failure to make the right decisions can lead to you losing all that money in no time – we’ve seen this happen many times.
So, what’s the smartest way to handle big lottery wins? Who should you trust, and where do you start? Let’s find out!
First Things First
So, you’ve got your ticket in hand, or you’ve just triggered the jackpot while playing online; what’s your next move? Breathe. You need to resist all temptation to call family or friends at that moment and take a deep breath instead. Then, give it time to set in. Wait for the initial rush and adrenaline to die down slightly and begin to gear your thoughts towards what this means and its potential to change your life and the ones you care about for the better. How much time you take depends on you.
Some experts say at least a few weeks, while others say waiting a few months is good. While the money is getting comfortable in your account, you need to draft a plan that states your goals, what you’d like to do with the money and the timeframes. Also, take the time to develop a new mentality about money and move away from the paycheck-to-paycheck mindset. You made it out of the mud, now begin to think like a winner!
Build Your Support Team
If we are talking millions or even hundreds of thousands, you’ll need a team to support you. The purpose of the team should be to help you grow your money and enjoy it responsibly. Our first instinct is to partner with our wives or husbands or another close family relative, and while that’s great for emotional support, you need actual professionals to lead your team. You will need:
- An estate lawyer
- An accountant
- A financial advisor
Your financial advisor might have the biggest responsibility of them all, and you want to make sure you select someone trustworthy and someone who, at a basic level, has your best interests at heart. Here are some of the checking points and questions you should ask yourself before making your choice.
- Do a background check on your top 3 choices. What does this info reveal? Can they be trusted?
- Have they handled similar cases before? What were the client reviews from that?
- What are their ideologies regarding money? How do they feel about investing, and are they knowledgeable about financial markets, global economies etc.
- What qualifications do they have? Are they adequately skilled for the job?
Best Ways to Spend Your Lottery Winnings
Alright, now let’s get to it. What are the smartest ways to spend your lottery winnings? See some of our expert suggestions below.
Get Rid of Debt
One of the smartest moves you can make when you win the lottery is to pay off your debt. Debt weighs heavily on one’s shoulder and being able to settle one’s debt is truly one of the biggest blessings in life. Make sure you settle your mortgage, pay off your car, settle and close all clothing accounts and cellphone bills, settle your loans and pay everyone you owe money to.
Acquire Equitable Assets
Choose to spend your money buying assets that appreciate as time goes by. A house and other property is a good example of this. Buying unnecessary cars is not a good idea because cars quickly depreciate. We are not saying you can’t buy yourself a luxury vehicle – no, please do. We are saying you don’t need a driveway full of cars.
Prepare for Retirement
Life goes by quickly when you are living it up. But in the midst of that, be mindful of retirement and make sure that you have put enough money aside to afford yourself the same standard of living now when you are old.
Invest in Good Companies
Investing your money in the right places is also a great way to make it grow over time. Promising start-up companies are always a good idea. You can also invest in the stock market, invest in fine art, buy cryptocurrency and so on. Diversifying where you invest your money is always advisable.
Set Up Trust Funds
If you have kids or grandkids, you might want to set aside some money to have access to when they’ve reached a responsible age. Building generational wealth for you and your family is one of the best possible outcomes of winning the lottery.
Help Build Your Community
It’s the honourable thing to do to go beyond yourself and your family and look for ways to build your community and invest in the livelihoods of others. Find a good cause in the community and offer to help as much as possible. This way, people don’t only see you as a rich man but as a kind man too.