Did you recently win a lottery and not sure what to do now? Well, to be honest, winning a lottery can be a big thing and a lot of people don’t know how to manage things afterward. I have seen folks making the mistake of quitting their jobs or overspending their money in months, only to regret it later on. Since winning a lottery can be a once in a lifetime thing, you might not have the luxury to learn from your mistakes. Don’t worry – I’m here to help you with this post on the top 10 things that you should not do after winning a lottery.
1. Telling everyone you know about your win
I’m going to start with the common mistake that most of the lottery winners are guilty of committing. I understand that winning a lottery could be a big deal and you would like to share it with the world. Though, while doing so, you might jeopardize your jackpot. Someone else can claim it in your place or even file a dispute.
Needless to say, it can make your life and the lives of people around you in danger as well. There have been several instances of kidnapping and money extortion in the past with lottery winners. I would recommend keeping things low for a while and let others figure out that you are wealthy on their own.
2. Trying to get away with the taxes
When you win a jackpot, chances are that you might have to pay an evident amount as a direct tax. While it might be a bit disheartening, it is important to be smart here and pay all the essential taxes. If you would try to escape the process altogether, then you might end up committing an illegal action unintentionally that can have severe consequences in the future. It is recommended to have a financial expert who would guide you on how to pay taxes the right way to avoid any future conflict.
3. Quitting your job (or work)
If you have won an evident amount of money, then you might be tempted to quit your job or work. Try not to make this mistake and keep holding on to your job for a while – at least till you have a foolproof future plan. Consider the jackpot as your retirement plan, savings, or something to invest. Ideally, you can invest your money in such a way that it would start giving you good returns. Once you know that the returns are stable, you can consider quitting your job afterward.
4. Buying everything for everyone!
If you are a big spender, then winning a lottery can be a huge thing for you. A lot of people don’t make a plan and start buying numerous things for themselves, their friends, and family members. While it is good to let your loved ones know that you value them, you should make sure that you spend thoughtfully. Try to get them something more meaningful instead of a materialistic thing. In this way, they would remember the gesture and you can add something valuable to their life.
5. Donating everything to charity
The world is full of kind-hearted people and chances are that you might wish to donate something to charity as well. Needless to say, it is a precious thought and you should certainly donate something to charity. To start with, pick a cause that resonates with you and make sure the organization you donate to is genuine. Though, I would not recommend donating the entire amount to charity just like that. Instead, keep at least a significant amount for your future as savings and donate the rest.
6. Living the big life
Changing your lifestyle would be one of the most tempting things to do after winning a lottery. While doing so, make sure that you stick to your plan and don’t end up overspending your money. It is okay to upgrade your car or change your wardrobe, but try not to make life-changing decisions like moving to a new house or a country.
7. Not managing your money thoughtfully
Ideally, the first thing that you should do after winning a lottery is getting a financial plan. If you want, you can consider visiting a financial expert who will help you make your short and long-term plans. In this way, you can also decide if you want to cash out your jackpot right away or get a regular annuity.
8. Investing your money blindly
While it is recommended to invest your money, you need to make sure that it is done properly. For instance, if you would invest your money somewhere new or on any business you are not familiar with, then you can end up losing it. You should have enough experience with the business and know its nitty-gritty to make the most of your investment.
9. Not paying your loans or debts
Ideally, this should be the first thing that you should do after winning a lottery. Try to clear your existing loans or any other debt so that you would know how much money you can spend afterward. This will also improve your credit score and you can live your life without any debt-related stress.
10. Not sticking to your budget and plans
Most importantly, you should come up with an in-depth financial plan and stick to it. Yes – chances are that you would get tempted to spend more on a few things along the way. This is exactly where you need to control yourself and be patient. Remember, one wrong move can affect your budget, leaving everything unorganized in the end.
You might not know that, but 70% lottery winners end up being broke in the first few years. If you don’t want to be one of them, then you need to learn how to manage your finances wisely and avoid overspending. With the help of these suggestions, you would certainly be able to do that and can grow your wealth in the future instead of getting broke.