22 Things ‘New Rich’ Must Do With Newfound Wealth

6. Establish A New Budget

This is different from your plan of action if you come into wealth. Establishing a monthly budget includes your bills, income, and anything else that you must pay or receive. You might not think that you need a budget now that you are rich. But without a budget, you’ll start spending too much money, you won’t save what you should, and you won’t think about how you are acting with your money. This can turn into a disaster and you could find yourself broke within a few years.

When you establish a budget, you’re following a plan that allows you to stay on top of your wealth, pay off your debt, and follow through on paying your bills so you can continue to live comfortably and help your children when it comes to going out on their own. One crucial factor to remember when you are creating a budget is inflation. Prices will continue to rise, and your interest or income might not grow with it. Protect yourself by staying one step ahead within your budget.

5. Increase Self-Discipline

Self-discipline is not the easiest characteristic to learn and seems nearly impossible when you don’t start learning from your childhood. In fact, one reason people struggle when it comes to handling money is that they don’t have a strong sense of self-discipline. They think they can spend while they have the money and then wonder where it went once they find their bank account low.

There are many techniques you can use to boost your self-discipline so you are more likely to save instead of spend. For example, leave $20 in a place that is easy for you to grab and spend and see how long you can leave it before you spend it. Then, note what you spent it on like groceries or something you didn’t need. Continue to do this to keep the money in that location longer than next time.

4. Keep Things Simple

You want to keep things simple. Even if you’re a millionaire in a small community and can’t hide your newfound wealth for an extended period, you want to be cautious of the actions you take with people, especially when they ask you for money.

For example, you receive a call from a local nonprofit asking for a sizable donation to start a new project to help children in your area. You’re supportive of this charitable and the children, but you don’t understand the new program. Don’t jump and say you will help because your heart tells you to. Instead, set up a meeting with the director, yourself, and your financial advisor. Meet with your advisor before you sit down with everyone so you can come up with questions and understand how much to invest in this project.

3. Get An Attorney

Those are some scary words for anyone to hear – that they need to get a lawyer. Usually, you hear these words because you are in some form of legal trouble, but this is not the case. Obtaining a lawyer as soon as you become rich simply protects you from the damage some people will try. For example, if someone comes to you with a business proposition, you always want to talk to your financial and legal advisors and probably aim toward saying “no.” It’s a lot easier to say this one word when you have people with authority backing you up.

Another reason is that your lawyer can start to prepare you against anyone that is trying to scam or sue you for any reason. They can advise you on your rights and the best course of legal action to take, if necessary. Furthermore, they will help you when it comes to your taxes by explaining the laws and direct you to the best tax representation.

2. Think About Your Marriage

It’s a famous story for many people. They become rich suddenly, whether through celebrity status, gambling, or inheritance, and find themselves in the arms of another person. This new person is someone different that offers you a different view. Now that you are rich, people are throwing themselves at you. They will find you when you are weak, and the temptation is expensive.

In fact, the temptation often ends in a divorce and a bitter custody battle. Plus, because you received that money while married, your spouse is entitled to half of it. Of course, this might not be the case if it is inheritance, but that depends on state law. The fact is, you can ruin more than you ever imagined by letting someone open their arms up to you. All this person wants is your money while your spouse doesn’t see you as a dollar sign.

1. No Matter What, Play It Safe

Above all, no matter how much money you receive and what you do with it, the best way to make sure you don’t find yourself struggling financially again is to play it safe. This includes finding a financial advisor, and you can trust and talk to them about how to set up investment accounts, savings accounts, and how to pay off your debt.

Don’t jump into anything because you have money and can spend it without overthinking about where your money is going for a little while. This can quickly turn into a big mistake that causes you more trouble than the money was worth. Furthermore, you want to remain the humble and caring person that you are. Always think about your actions and how they are affecting other people without giving all your money away.

Sources:

“13 Things to Do If You Suddenly Become Filthy Rich.” Jon C. Ogg, 24/7 Wall St. January 2020.

“15 Things to Do If You Get Rich All Of A Sudden.” Emil Anton, Alux. January 2019.