It’s everyone’s dream to win a huge jackpot that will help you to pay off your house or maybe even set you up for life. While big wins like these are rare, it is more possible that you could win a couple thousand dollars playing the slots in Vegas or hitting a few numbers in the Powerball. Whether you win millions or you win thousands (or even hundreds), it’s important for you to have a plan for managing your money so you don’t end up burning through it in the first couple of weeks (or couple of years) and end up where you were before or worse.

Slot Machine
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Here are a few tips for managing money you’ve won to make sure that you get the most benefit from it:

Talk to a Financial Advisor

If you’ve won a large amount of money — more than $10,000 or so — it’s best that you talk to a financial advisor before you do anything else. A financial advisor can review your financial situation and talk to you about your goals to determine where you can make the biggest impact with your money. A financial advisor can also give you feedback about your tax obligations, including how donations to charitable organizations or gifts to family members would impact your (or their) taxes.

Set a Budget and Goals

It may be tempting to rush right out and buy a new computer or a new car or new clothes or any dozens of other things, but it is important to first assess your financial situation and to create goals for the money. Create a few goals for yourself — such as paying off certain debts or buying certain big-ticket items that you have had your eye on for awhile — and then create a budget based on priorities for those goals.

You may not have enough money to take care of all your goals, but you can divide it up to make a dent in each of them. The budget will help you stay on track.

Pay Off Debts

Winning money is very exciting, but don’t let it distract you from your financial goals. Paying off debts should always be a priority for you since debts can have a cumulative negative effect on your finances and can be a constant drain. Unless your winnings are very small — like $20 small — you can use a portion of them to pay off or pay down your debts.

Though you may feel like paying off debts isn’t the “fun” thing to do with your winnings, if you pay down your debt, you will free up more of your income and give yourself the financial freedom to buy more of the things you want. Having financial freedom is much more “fun” in the long run.

How you handle winning money will depend in large part on how much you win. Obviously, if you win a big jackpot, you will also need to talk with a legal advisor, set up accounts to safeguard your assets, and work to protect your anonymity, amongst other concerns. However, following these tips can give you a good base for managing any amount of money you are fortunate to win. Make sure you work the situation to your advantage and don’t just get carried away by spending.

Kelly Opferman is a seasoned writer who at this time focuses on her auto calculator site. Her educational background includes finance, teaching, and economics.

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