CALGARY, AB, Mar 28, 2014/ Troy Media/ – What would you do if you got a financial ‘windfall’? Spend it, save it, give it away? It’s a problem most of us think we’d like to have, but there’s a downside to unexpected money. You need clear financial goals and strong personal boundaries to ensure your windfall benefits you, your personal goals, your family and your health.
Windfall originally described the fruit or wood blown down by the wind, which anyone in the village could eat or heat their homes with for free. By the1540’s, the word’s meaning had broadened to include any unexpected goods you didn’t have to buy or a financial benefit you didn’t have to work for.
A quick glance at the Canadian Oxford Dictionary reveals that the broader meaning has superseded the original meaning. Today most of us think of ‘a windfall’ as an unexpected gift of money or piece of good luck.
Sounds great doesn’t it?
But if you’ve ever ducked a flying tree branch you know that windfall can be downright dangerous. Many lottery winners will tell you that financial windfalls can create as much havoc as a tree branch hitting your car windshield.
The psychological and financial chaos caused by the stress of managing unexpected money is called sudden wealth syndrome.
I don’t blame you if you’re rolling eyes at my last sentence. I admit that when I first heard the phrase ‘sudden wealth syndrome, a few phrases to the whining of lucky people came to mind including, ‘first world problem,’ ‘problem we’d all like to have ‘and’ solution looking for a problem.’
I am still not sure that most people fortunate enough to get an unexpected windfall of cash require therapy, but sudden wealth does impact your life. Unless you manage the changes it brings, your new found pot of gold and your good fortune won’t last.
Instead, money that should end your financial struggle – a quick pick won, inheritance, investment, or an insurance payout – can act like a wind borne tree branch create a path of financial and personal destruction.
According to Dr. Dennis Pearne, co-author of The Challenges of Wealth, money has a ‘multiplicity of meanings’ beyond the ability to buy the things we want. Sudden wealth can lay bare emotional issues. Living happily with new wealth requires you to define your ‘financial bottom lines,’ values, and goals.
Change can be scary. So it’s no surprise that a financial windfall brings can freeze you in anxiety, indecision, and fear. You may feel you no longer fit in with your old friends, family and co-workers. You may even feel guilty about your good fortune. You can become stressed by non-stop requests to help out eternally struggling relatives or invest in ‘once in a life-time’ business deals you aren’t sure you understand.
Thinking the money is endless, you may it spend recklessly, gamble, or binge on drugs and alcohol. Equally unhealthy, you may hoard cash, refuse to buy yourself anything, and isolate yourself from other people.
The solution: Learn to manage your windfall.
- Put your money in the bank, taking the time to re-evaluate your lifestyle, values and future. Don’t make drastic changes or spending decisions until you adjust to your new financial status.
- Don’t rush to tell the whole world about your good fortune. Instead, take time to explore who you are, what you value, and what you want to from life. Decide how you will make this new wealth mesh with your goals, values, and lifestyle.
- Come up with an investment, spending and giving plan that suits your values and personal dreams.
- Develop your boundaries. Remember, it’s ok to say no to charities, business deals and family members who come asking for money.
Relax and remember that a well-managed financial windfall is an opportunity to live the life you’ve always wanted. The choices are all yours.
Jane Harris-Zsovan offers her readers practical money advice for the real world.
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