An inheritance. The sale of a business. A large bonus. A sudden financial windfall can be exciting — and potentially life-changing. But what you do in the weeks and months that follow can have a lasting impact on your financial future.
After years of helping clients navigate sudden changes in wealth, we’ve seen many of the same patterns emerge. One of the most important lessons? You don’t have to make big decisions right away.
Give Yourself 90 Days
The first 90 days after receiving a windfall can be especially important. Emotion can easily outpace strategic thinking, whether that means immediately upgrading your lifestyle, giving generously to family, jumping into investments — or becoming so overwhelmed that you do nothing at all.
Instead, consider giving yourself time to adjust to your new financial reality before making major commitments.
Decide What the Money Is For
Before asking what should I do with this money, ask a bigger question: What do I want this money to accomplish?
Is it meant to strengthen your retirement? Help your children? Pay down debt? Create a family legacy? Support causes you care about? Or perhaps provide some well-earned enjoyment?
Defining your “why” can make the many smaller decisions that follow much easier.
Build a Team and a Plan
A windfall can introduce tax, estate, investment and family considerations all at once. Before making significant decisions, consider bringing the appropriate financial, tax and legal professionals into the conversation and reviewing your overall financial picture.
And remember, responsible planning doesn’t mean you can’t enjoy some of the money. We often encourage clients to create a defined amount for guilt-free spending while protecting the larger opportunity the windfall represents.
Think Beyond Today
Handled thoughtfully, a windfall can do much more than change your lifestyle today. It may provide greater financial security, help the people and organizations you care about, and potentially create a legacy that lasts for generations.
Want to explore this topic further? Read Michael Garry’s full article, What Would You Do with a Windfall? on our website at yardleywealth.net/what-to-do-with-a-windfall.
Have questions about how a sudden financial change might affect your own financial plan? Contact Michael Garry and the Yardley Wealth Management team to start a conversation.
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