Personal Finance

Things to Do After Winning the Lottery

You can’t believe what has just happened. You’ve pinched yourself to make sure it is real and you aren’t dreaming. You read the numbers half a dozen times just to make sure that you’re not going crazy. After a few minutes of hyperventilating, you suddenly realize that it is true. You really did just win the lottery. If you are like most people, this is likely a once in a lifetime event and something that you hadn’t planned on happening. Not surprisingly, you probably do not know what to do next. The following is some information that will give you some tips on what to do if you even happen to find yourself in this fortunate situation.

winning the lottery

Don’t Tell the World

Your first reaction is likely to shout from the rooftops and to post on all of your social networks about your lottery win. You are happy and you want everyone to know. However, the dark truth behind winning the lottery is that people will come out of the woodwork begging for some money, often in the guise of needing help. Fake charities will contact you, and relatives and friends you haven’t heard from in years will get wind of your financial upswing and suddenly come back into your life. People you’ve never met will write to you and ask you for money. Keep it as quiet as possible for the sake of your own privacy and sanity.

Get in Touch with Professionals

You should also contact an attorney and accountant, so you can be sure you are paying all of the necessary taxes and fees for your winnings. They can also help to ensure the safety of your winnings, and the accountant may even be able to help you invest some of your money.

Spend Smart

When you win, you will want to spend money. It’s natural for nearly everyone to have this innate need to buy something nice. You should do that. Give yourself a little leeway to buy a few things you want to have, but give yourself a spending limit. If you don’t limit yourself, there is a good chance that bankruptcy is just around the corner. The amount that you should spend will vary by the amount you win and your payment plan. Buy things you’ve always liked, but keep your head and wits about you whenever you are spending. That rare copy of The Amazing Spider-Man might be nice, but is it really something you need right now? Better your life before spending on hobbies.

Did You Choose the Right Payment Plan?

Some people feel that they should choose the annuity payments so they can receive money annually. While this might be a good choice for some, it may not be the best choice for everyone. When you have annual payments, they are going to be much smaller. You may not be able to pay all of your debt, and you may not have all of the changes in your life that you thought the lottery would bring.

Using a third-party to change your plan to a lump sum payment might be a better option. When you have the large amount of money in an interest earning account, you will be making money on your winnings. If your winnings are high enough, you might even be able to live off the interest. Many who choose to get a lump sum payment will actually take some of their money to invest in different areas, which can provide them with a safety net. Keep on working, at least part-time too, so you can still make some money to pay your regular bills. When you have the freedom that the lump sum payment can offer, you have the time to look for a job that you really enjoy. Smart planning makes having financial freedom easier for the rest of your life.

(Photo courtesy of Matthew Anderson)

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