Dreams sometimes do come true, and if you’re on your way to Vegas or Atlantic City you need to have a plan in place in case your ship comes rolling in. Allow yourself some daydreams along the trip and create a game plan for your earnings.
1. Set Goals for the Winnings
Winners can blow any amount of money. Consider William Post, who won over $16 million, and now survives on Social Security. Determine how much you’ll allow yourself to blow, how much needs to go into savings for the future, how much you want to set aside for heirs, and how much you’ll donate to a charitable cause. Commit to what you truly want the winnings to mean in the long run.
2. Pay Off Debt First
A common mistake by winners is to blow the money on all the fun stuff, and neglect to take care of the financial obligations they held when they first won. The first thing to do with winnings is pay off every debt you owe, including the home, cars, credit cards, student loans, and any unpaid tax debt. Then you can start your new life fresh, and creditors won’t spoil your fun with harassing phone calls — or worse — lawsuits.
3. Make Solid Investments
Invest the money you’re setting aside for the future in an FDIC secured account, such as a Certificate of Deposit at a bank. The federal government guarantees FDIC accounts, meaning you can get your money back (up to a certain amount) from the government if the bank goes under for some reason. Other investment opportunities are available, but are less secure. For example, investing in stocks can bring huge returns, but there is also a chance you’ll lose some or all of your investment if the stocks fail to perform.
4. Give to Charity
Many winners give some of their winnings to causes close to their hearts. For example, if you’re passionate about helping the homeless, saving animals from abuse or euthanization, offering opportunities for abused or neglected children, or protecting abused women, consider giving a sum to organizations serving the cause you most admire. Most of these charities operate on donations alone, and a significant lump sum can considerably help their ability to serve.
5. Decide Who’s In
Unfortunately, friends and family members begin crawling out of nowhere and trying to get their hands on the money you win at the casino. Before you win is a good time to decide who you do want to share with, and who you don’t. Remember, this is your money and your decision. Don’t let people who would ignore you if you didn’t have the money wiggle their way in to take the money. Never fall for guilt trips or sob stories, because you’ll hear as many as you’re willing to listen to until you realize the money’s gone and you didn’t enjoy any of it.
6. Allow Yourself Some Spontaneous Spending
Wisdom in spending and saving is important, but so is having some fun. Don’t be such a miser that you won’t afford yourself a few well-deserved spending sprees. After you’ve paid off your debts, invested, and showed your generous side, indulge in a beautiful home, a spectacular vacation, or a super cool car.
What’s the point in winning if it’s all work and no play?