While the chances of winning a big lottery ticket are very low, the game offers hope of getting rid of credit card debt, finally being able to afford a home, or helping a loved one who may be struggling financially. will give you.
No wonder people expect microwave wealth. Many people are still struggling with inflation and rising prices for housing, food, and cars.
Lotteries do not favor the public.
Big winners are very rare and sometimes these huge jackpots can ruin your life. Games of chance sell the dream of getting rich instantly, but unfortunately they appeal to people who can't afford to play.
In reality, more people are likely to benefit from windfalls from inheritances, insurance payments, and lawsuit victories. One of the biggest payments people receive is their annual tax refund.
If managed well, this bonus can have some effect. Otherwise, sudden wealth can quickly bankrupt you.
Several people have called my toll-free number (1-855-ASK-POST or 1-855-275-7678) and asked how to handle unexpected situations.
“I waited four years to get a legal settlement that included being fired from my job,” Rebecca Ebaugh, a Maryland resident, said in a toll-free number. “And now that it's becoming a reality, with the economy in such a crisis, I don't even know if I should even try to invest. …What would you do if you had almost $100,000?”
Here's what I wish and would have done after receiving my windfall.
Put the brakes on the urge to spend money right away. Even if you have a lot of debt, don't wait.
Don't rush into making a decision until you've reviewed your entire financial situation. Rather than spending all your money to eliminate credit card debt, you may need to build up an emergency fund, even if only a little.
I need emergency funds. Otherwise, if a financial crisis occurs and you have no savings, you will find yourself in debt again.
Taking a bonus can make you a little reckless, so pausing gives you time to consider how best to use your funds.
We also tend to think differently about windfalls, as if they were just play money and not real money. Putting the brakes on before you spend money can help you resist the temptation to splurge recklessly.
Deposit your money in an interest-bearing account at a bank or credit union. You need something safe and short-term until you decide what to do with the money.
That's what Ebo did. She deposited her settlement money in a money market account.
Two sites to find savings accounts with the highest rates are Bankrate.com and Investopedia.com.
Take your time and make a financial plan. Consider your future financial needs, such as your children's college tuition, retirement savings, charitable contributions, and relatives you'd like to support. Once you think things through, you may realize that your first instinct to splurge on an expensive car or luxury vacation isn't the best use of your funds.
pay for professional help
Look for a tax accountant or financial planner.
The tax office may come and take some of your money. Generally, money received from a lawsuit settlement or other legal relief is taxable income unless exempt, according to the IRS.
“With respect to damages, the two most common exceptions are amounts paid for certain discrimination claims and amounts paid for bodily injury,” the agency explains on IRS.gov.
Ms. Ebo had filed age discrimination and disability discrimination claims against her former employer. Consult with a tax accountant to determine your tax liability. She set aside her 30 percent of the settlement for taxes, just in case.
If you are concerned about handling a large amount of money, consider consulting a financial planner. You can find paid financial advisors by visiting the National Association of Personal Financial Advisors (NAPFA.org) website.
Ebo consulted a financial advisor and invested his money wisely.
Consider charity work
When money falls into your hands, a surprising number of hands begin to ask for help.
Philanthropy can be an unexpected part of your financial plan.
However, be careful not to make your family and friends irresponsible by donating. If you decide to share your wealth, set aside a specific amount of money that you are willing to donate, rather than lending it. Please adhere to that limit.
Let's get rid of the excess. Don't feel guilty and give more than you're capable of.
Even if you're not in debt or haven't reached your savings goals, it's okay to enjoy your settlement.
Ebaugh said he was very reluctant to celebrate the victory because of the long legal battle.
In her case, splurging was a given.
