What to Do With a Big Financial Windfall

When you suddenly find yourself with a large sum of money – whether from an inheritance, a huge bonus, winning the lottery, or winning big at a slot game that’s very appealing to British gamers – it can be tempting to start spending without care.

While this is a common thing to want to do, you’d likely be much happier with yourself and your financial situation if you approach your sudden financial windfall differently. After all, you don’t want to find yourself with what’s been called ‘sudden wealth syndrome‘ or, even worse, wind up bankrupt after a big lottery win.

To help you avoid getting into these situations, here are a few tips and ideas for what you should or shouldn’t do with your sudden cash injection.

What You Should Do


Instead of jumping into large purchases or showering everyone you know with gifts or money, you should look at your financial situation first to ensure you’re taking care of your financial needs by considering the following financial tasks.

Create a Financial Plan

When you come into a large sum of money, take the time to develop a financial plan (or review and update one you already have) that outlines your financial and life goals. These goals will help you evaluate what to do with your money to best serve you in the long term.

For example, a financial plan can guide you in how much money you’ll tuck away for the future through saving or investing or how much you can comfortably put towards a trip you’ve always wanted to go on.

Often, a financial plan is an all-encompassing look at your finances that takes into account your lifestyle and budget, as well as short and long-term goals.

Set Up Emergency Savings

If you don’t already have an emergency fund or savings, your sudden cash flow is an excellent opportunity to set one up. An emergency savings fund is a financial cushion you can use in the event of something unexpected happening, like losing your job or your car suddenly needing an expensive fix.

When setting up an emergency fund, it’s typically recommended to have enough savings on hand to cover your monthly expenses for three to six months. You can also have this money earning you more cash by placing it in an easy-to-access high-interest savings account.

Pay Off Debt

If you have debt, odds are likely that paying it off is a financial goal and something you’ll want to put your newfound finances towards. It may not be exciting or glamorous, but it is, in some ways, the ultimate form of self-care since debt can impact our mental health and quality of life.

If you have more than one type of debt, it’s best to put your money towards the higher-interest debt.


Investing your unexpected influx of money can help set you up for long-term financial success. When investing, you’ll want to consider your comfort level with risk and the timeline (or timelines) you have to work with. To help you address these considerations and decide how to invest your money, look at your financial plan or speak with a financial adviser.

Consider Your New Tax Obligations

Depending on the source and where you live, a sudden influx of cash could be subject to taxes, so take a look at what this might mean for your particular situation before you start spending money. If you end up owing the taxman, you’ll want to set aside enough to accommodate taxation. A good place to set aside the money is in a high-interest savings account so that you can earn interest on it.

Seek Financial Guidance

If you find yourself with a lot of questions about what the best thing to do with your sudden financial gains is, speak to a financial expert. They can answer your questions, develop a comprehensive financial plan, and help you manage your cash and investments.

What You Should Not Do

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Before you lose your head in your sudden wealth, bear in mind that it’s best not to do anything rash. Do yourself a favour and avoid doing things like the items below.

Quit Your Job

Having a sudden influx of cash may tempt you to quit your job, but don’t just do this on a whim. There are many factors to consider, including the fact that your sudden cash injection likely isn’t going to be an ongoing thing, and you’ll still have bills to pay and groceries to buy once it’s gone.

Tell Everyone

When you win big, it’s tempting to want to tell everyone. Unfortunately, this information can bring out some less-than-savoury dynamics with friends and family. Even if you do want to share your wealth with your loved ones, it’s best to keep the details to yourself until you figure out a detailed strategy for how you’ll spend it.

Make Big Purchases

When you suddenly find yourself with enough money to buy something like a house or a car, it isn’t always the best idea. You could end up ‘house poor’ or cause more financial strain by not considering the long-term implications of making a big purchase.

This isn’t to say that you can’t or shouldn’t spend your money, just that you’d be better off referring to a financial plan before making a big purchase.

Give In To Lifestyle Inflation

Lifestyle inflation, also known as lifestyle creep, is when your regular spending increases as you earn more. Depending on the amount you suddenly find yourself with, it can be easy to fall into this experience. This can make it harder to reach long-term financial goals (like buying a home) or maintain your budget come retirement.

Final Words

Coming into a sudden financial windfall is an exciting situation to find yourself in, and if you play your cards right, it can help set you up for even more monetary success down the line.

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