It’s something that most people have dreamt about at one point in their life or another — having their whole world changed by a scratch-off ticket or a lucky pull of the Powerball. Winning the lottery instantly changes the life of the lucky man or woman who pulls the winning numbers, but this massive change isn’t always for the better. A whopping 70 percent of lottery winners end up bankrupt just a few years after their big win, mostly due to massive money mismanagement.
While you can’t plan on winning the lottery, you can plan to avoid these three common financial mistakes that leave lottery winners broke.
- Choosing the lump-sum payment. We get it; when faced with the choice of receiving $172 million in one lump sum or $300 million slowly over time, it almost feels greedy to want the bigger amount. However, most people are simply unprepared to deal with instant empire-making wealth, leading to bankruptcy in as little as a few years. Consulting with a top money-management firm or a company providing buying advice in Bucks County can help you manage your new-found wealth if you do decide to go for the big payout.
- Saying goodbye to budgeting. The chances are high that when you hit the jackpot, you’ll want to treat yourself to a brand new car or a tropical vacation for you and your family. While treating yourself is fine, remember that your money is still finite. Consulting with a financial advisor can help you create a sustainable budget that will help you avoid the no-budget trap that leaves winners broke.
- Telling everyone you know. Who wouldn’t want to brag about winning the lottery? Unfortunately, telling everyone about your big win will bring out fair-weather friends looking for “favors” that can quickly add up; not to mention the possibilities of blackmail and kidnapping. Tell only your closest friends and family members and remain anonymous in the news if possible.
You don’t need to have millions to start on the road to smarter financial planning! Credit counseling agencies in Bucks County, PA like Quality Credit Repair can help you and your family plan for the future — no winning lottery ticket required. Give us a call today at 888-399-3898 to get started!