Managing your money
Here are some options to think about when you have a large sum of money come into your bank account.
Reduce or pay off debt
Begin by listing all the organisations or people you owe money to, how much you owe, your current monthly repayments, and the interest rate. Consider paying down your debt with the highest interest rate and fees first.
Set up an emergency savings account
Things don’t always go to plan and sometimes the unexpected can cost us a lot of money. Imagine if you had a savings account with money that you could use to pay for the unexpected. It’s a good idea to keep this money separate from your everyday spending money. A savings account allows you to put money aside for tomorrow or when it may be needed.
A budget to spread the money out
A budget is a tool that can help you to plan how you’ll use the money and when. A budget helps you work out how much money is left over after you’ve paid your bills and other expenses.
Invest it for the future
Investing your money means putting your money away in the hope that it will grow – earning money on your money. There are a number of ways you could invest your money, including shares, property, online savings accounts or term deposits. Before investing it’s very important to understand that there are risks involved in investing and whilst money can be made, money can also be lost. Consider time frames and invest accordingly.
Make a will with instructions on who to leave your money and personal belongings should something happen to you
Do you have a will? A will gives instructions on who will get your money and other assets should you pass away. It’s really important to make a will or update it should you receive a large sum of money.
Keeping your money safe
Once you’ve received the money. How do you protect it? Here are a couple of tips to keep your money safe:
Put the money into a bank account, rather than keeping it at home
A bank account helps to keep your money safe. Money could be easily lost or stolen if it’s kept at home or in the car.
Pressure from friends and family
Sometimes there will be pressure from family and friends when they know you’ve received a large sum of money. Whilst it’s good to be able to help them out, it’s important that you also consider making sure you have enough money yourself to pay your bills today, tomorrow and in the future. If you give all your money away, you may find yourself struggling to pay your own bills in the future and maybe having to go into debt to cover your bills.
Be aware of scammers
Scammers can sometimes be tricky to spot. They’ll often ask you for your personal details or bank details, or even to send them money. Scammers could even pretend to be someone that you know and trust to get your information. If something doesn’t quite look right or make sense, or if it sounds too good to be true, it probably is a scam. Walk away and don’t give them any personal information or bank account details.
Who can help?
The services below can offer additional help for you to manage your lump sum of money:
- Financial Counsellor – can provide advice and information on financial matters.
- Banker – can help set up the right savings, transaction or loan account depending on your needs.
- Financial Planner – can provide money advice and help you build a plan for your money.
