After celebrating your good luck, what do the experts advise you do with an unanticipated financial windfall? Save it, spend it, give it away?
Would you quit your job and retire early? According to a recent study conducted by two finance professors at the University of Illinois at Urbana, financial windfalls cause just that, a hastening to early retirement.
A more systematic approach to handling sudden wealth is presented by Marcia Passos Duffy in Bankrate.com’s Smart Spending column. Her 4 Steps to Protect a Windfall are: 1) Money Moratorium 2) Emotional Inventory 3) Set aside play money 4) Review after one year.
Additional advice on the subject is offered in the September issue of Money magazine. The Ask the Expert column titled What to do with a million bucks cautions windfall recipients to avoid costly investing schemes and the “big-spender syndrome”.
For a personal perspective , check out these selections from our print collection: Ann Perry’s The Wise Inheritor: protecting, preserving and enjoying your legacy and Money changes everything: twenty-two writers tackle the last taboo with tales of sudden windfalls, staggering debts, and other surprising turns of fortune.
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