Going from having very little money to receiving a large lump sum of money will often turn out to be financially disastrous for a lot of people. People who are not used to handling large sums of money will often imagine that there is more money in their possession than there really is. Before they know it, the money has slipped through their fingers and they are once again broke. To avoid this outcome, here are five steps that a person can take to preserve their newly found wealth for years to come.
Put the Money Somewhere Safe
Whether you are trying to keep your newly found wealth out of the hands of a thief or a family member asking for a favor, placing the money out of your own reach is the first step to take to ensure that you will keep your money around for the long term. According to Business Insider, the wealthy spend their time with other wealthy people, rather than tossing wealth at everyone with an open hand.
Putting the money in an account for which you do not have constant access is one way to prevent yourself from spending your money too quickly.
Blow a Small Portion of Your Lump Sum Payment
Part of the psychology behind handling large sums of money is to actually permit yourself to blow around 10 to 15-percent of the money. This leaves you with 85-percent of the money for other more serious purposes. This way, you get the satisfaction of using some of the money to treat yourself to a little honest fun.
If you want to manage large sums of money effectively, then you must keep a ledger. In your ledger, you must make it a habit to account for every last penny that you possess and how you spend it. It helps you to see a very realistic picture of how you treat money. Your ledger will help you to recognize where you could improve your spending habits.
Assign the Money With a Purpose
With the remaining 85-percent of the lump sum payment, it is time to put this money to good use. Assigning the money for specific tasks and to help you reach specific financial goals is a worthy use of your money. You will want to either use the money to pay off outstanding debts or to generate more income streams. Both are great ways to use extra money to help ensure a stable financial future.
Unlocking Your Lump Sum
A lot of times, people receiving large sums of money are subject to various types of restrictions. For example, they may be subjected to the rules of a court established structured payment. Fortunately, to circumvent the wait, you may find it more useful to work with a company, like myLumpsum.com, that will buy your structured settlement. This eliminates the wait and helps you get your money as a lump sum.
Large sums of money are, for many, a dream come true. If you are money-savvy and use it wisely, then your money will work to make you even more financially stable. By following a few simple steps, you will be able to unlock the potential of a lump sum payout.