7 Worst Things To Do After Coming Into a Ton of Money

Learning that your bank account suddenly has several more zeros can be a shock, causing your head to spin as all of the possibilities and the disbelief hit home. But after the initial excitement wears off, it’s important to realize that a financial windfall , while life-changing, can quickly disappear if you handle it poorly.

What you do next will begin to determine whether this money will help you create lasting financial security or simply turn into a source of regret .

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Money mistakes the super wealthy never make - that you might be doing now.

Fail To Process Your Newfound Wealth Before Acting

Robert Peterson, senior wealth advisor at Crescent Grove Advisors said the first thing you need to do after coming into a ton of money is allow yourself to take it all in.

“Breathe,” he said. “You need to take a moment to process what happened before making any decisions. Whether a lottery or non-lottery windfall, you should avoid telling anyone, except your significant other, about your win. (With the lottery, unfortunately, some states will disclose a winner’s name.)

“Even if you do not say anything, suddenly buying a massive home or exotic car is tantamount to telling everyone, ‘Hey, I just had a massive financial windfall.'”

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Give Money Freely to Friends and Family

Once people are aware of your newfound wealth, Peterson said you should prepare to lose some friends and family members along the way.

“No, no one is dying, but [the] money will not only change you but also everybody’s perception of you,” he explained. “It’s easy to say, ‘You’ve got millions; I just need $20,000 for X.’ It is easy to say ‘yes’ to keep people happy, but once the word is out, the requests will never end. There is nothing wrong with saying no and if that person has a negative reaction or refuses to talk to you anymore, maybe you are better off without them in your life.”

Fail To Consider Your Own Happiness

Last but not least, Peterson said it’s important to learn what makes you happy. He pointed out that money doesn’t buy happiness, but it does allow you to chase happiness.

“Does helping people make you happy?” he said. “Traveling? Buying things? Studies always show that ‘stuff’ loses its luster quickly, but we maintain longer-term memories of experiences.”

Not Budgeting

Terri Ho Cammack, certified divorce financial analyst (CDFA), certified fund specialist (CFS) and financial advisor with Manske Wealth Management , said that if you’re struggling to manage your current income, don’t expect things to get easier once you have more money. “The truth is, if you weren’t living below your means before, a big financial windfall won’t change that,” she said.

She explained that it might feel like you’ve finally “made it” and the amount of money you have is limitless. However, she said, without budgeting and proper planning, it can all vanish.

“First, take a deep breath and resist the urge to go on a spending spree,” Cammack said. “Pop that money into a safe, interest-bearing account while you figure things out. A wise move would be to spread your money across different accounts at different banks. Remember, the FDIC insures deposits up to $250,000 per depositor, per insured bank. This way, you’re protecting your money while buying yourself time to plan.

“Use this time to create a real game plan with a financial advisor. You want that windfall to be your golden ticket to long-term security, not a fleeting thrill.”

Ignore Your Debt

“When you come into a lot of money, it’s tempting to ignore those pesky credit card balances, student loans or mortgage payments,” Cammack said. “But ignoring your debt is one of the quickest ways to squander your windfall. Interest continues to pile up and before you know it, those balances start eating away at your newfound wealth.”

She said before you make any big purchases, you should tackle your debt head-on. She advised starting with your high-interest debt, such as credit cards and personal loans.

“Not only will this free you from the burden of debt, but it will also save you tons of money in interest over time,” she explained. “Once your debt is under control, you can start making other financial moves with confidence.

Take a Gamble on High-Risk Investments

“When you’ve got a lot of cash sitting around, suddenly, everyone has the ‘perfect’ investment opportunity for you — startups, crypto, real estate,” Cammack said. “You might even feel like you’ve got enough money to take a big risk. The problem is, high-risk investments can drain your windfall faster than you realize.”

She said to take the time to understand your options and avoid getting sucked into risky investments without a clear plan.

“A balanced portfolio of low- and medium-risk investments will ensure that your money grows steadily over time, rather than disappearing in a high-stakes gamble,” Cammack said. “Work with a trusted financial advisor to build a strategy that fits your long-term goals.”

Ignore Taxes

Chad Gammon, certified financial planner (CFP) and owner of Custom Fit Financial said when you experience a large windfall, it can be easy to overlook the fact that you’ll be responsible for paying significant taxes.

“Failing to account for this can lead to a big surprise in the future, reducing the amount of money available for your needs,” he explained. “It’s wise to consult a tax professional immediately. They can help determine your tax liability, so you understand how much money you truly have and they can suggest strategies to help lower your tax burden.”

This article originally appeared on GOBankingRates.com : 7 Worst Things To Do After Coming Into a Ton of Money