Have you ever came into a lump sum of money that you either were or weren’t expecting? This could be a bonus check from your job, an inheritance from a loved one that passed away, or even hitting the lottery! We would love to think that people would be responsible with a windfall of money, but sadly, this isn’t always the case. Not everyone donates to needy causes or makes sound investments. Here are 7 things you should not do with a windfall of money:
- Keep it under your mattress: I know some people would argue that this would possibly be safer than keeping it in the bank, but right now, it’s not. Even with the low interest rates right now, you can still gain some money on top of your money. Find a bank with a decent interest rate (comparable to other banks) and deposit your money for safe keeping there.
- Buy a bunch of cars: Now some people are going to do this anyways, because cars are what people love. However, you can only drive one car at a time. You also know that cars lose their value as soon as your pull them off the lot. Why would you invest in an instantly depreciating asset?
- Invest in something you didn’t research: You may feel compelled to invest in your best friend’s startup that he’s been talking about for years, but really do your research. Does he have a business plan and a marketing plan? Is this product or service something people truly need? You will see your money go down the drain if you invest in a company or business venture that you haven’t done the proper research in.
- Donate to illegitimate causes: It never fails; when you come into a windfall of money, people will find you and target you for donations they feel justified in. This can be people trying to raise money to do something, or even family members insisting you pay for their children’s way through school. Again, do your research. If it’s an organization, is it legit? Are other people donating? There are many scams you have to be aware of.
- Tell everyone about it: For those who don’t know about your new found fortune, keep it that way. You don’t need everyone knowing how much money you have. Understandable if you want people to be happy for you, but there are greedy people out there who will target you. This is how many people become the victims of theft. Be discreet with who you let know about your windfall. Make sure it’s people you trust, and even then, keep some details to yourself.
- Gamble it all away: I can only imagine how many times this has happened to someone. Gambling can be such a risky thing to do with your money. Sure, you go in with intentions on winning back your money, or even more. But there’s also the possibility that you can lose it all. You can guarantee that you’ll be quite upset if you lose your money. Don’t bother taking the chance.
- Buy on impulse: Be smart about your money. Don’t blow it on ridiculous things like tattoos, clothes you’re not going to wear, houses you’re not going to live in, or event tickets you’re not going to attend. Think about things that will truly make you happy, whether it’s things or experiences, and use it for that. Don’t get things just because you can.