Newly Wealthy? Use These Suggestions
Having a lot of money can be thrilling, but if you've come into a lot of money recently, it can also generate a lot of stress. You might be able to identify a number of things you'd like to use the money for, but you may also fear spending it too quickly. To hold on to your new wealth and grow it even more if you can, you're going to need to use these suggestions.
Keep the News Private
It's not unnatural that you'd be so excited about your financial luck or success that you want to tell everyone. However, this is something you could end up regretting right away. Relatives and friends will tell other people, and soon you may find that your phone is ringing off the hook with amateur advice and requests for loans. The additional strain caused by hearing ideas from everyone else about what you can do with your money can make it harder to make decisions. Instead, talk with a wealth management company or financial planner before telling too many people, if you can help it.
Wait Before Spending
When that first big check comes in, you'll be tempted to make a big purchase. But before you buy that new car, house or couture gown, wait a few days. Being able to resist impulse purchases and decide whether you really want something can prevent a lot of purchases you'll end up regretting. In fact, you might find it a wise practice to always wait a few days before you spend large amounts of money.
Waiting can be vital when the purchases you're considering require maintenance or other additional costs and responsibilities. For instance, if you buy a house, you'll need to consider the yearly taxes, upkeep, utilities and other costs over time. If you're buying expensive jewelry, you may need insurance and you might want to pick up a safe as well. Thinking your way through these extra costs over a period of days can allow you to avoid financial trouble.
Create a Strict Budget
To ensure that your money lasts, it's smart to rein yourself in with a budget. Work out how much you'll need in expenses, and give yourself a set allowance each month for purchases. Consider long-term financial goals as you work up this budget so that you'll know how big or small that allowance should be.
With this advice, managing your new wealth can be less overwhelming. Working through these issues with a local financial planner can make things clearer and allow you to make better decisions regarding your new wealth.