5 Tips to Smartly Manage Your Lottery Winnings

When there is a massive lottery jackpot, it's not unusual to see long lines at lottery counters nationwide. While the chances of being struck by lightning are much greater than the odds of winning the Powerball or Mega Millions jackpot, that doesn't stop people from trying their luck. 

A lottery win could entirely alter your personal finances and improve your life greatly. But if you ever find yourself with a winning ticket, taking proper steps is essential. You'll want to think through any financial decision carefully before taking action. If not, you could end up making expensive errors. Here are some tips to help you manage your lottery winnings. 

1. Take care to protect your privacy 

Protecting your privacy is essential, especially if you've won a major jackpot. The last thing you want to do is draw unwanted attention to yourself. If you share the news publicly, someone could try to take advantage of your recent good fortune. 

Some states allow lottery winners to remain anonymous, but if that's not the case, you may be able to claim your lottery winnings by forming a trust. This is something an attorney can advise you on. Until you claim your winnings and have a detailed plan for what you will do with your money, it's best to keep your big news private so you don't put your personal safety at risk. 

2. Don't be in a rush to collect your winnings

After winning the lottery, you'll likely be eager to collect your cash. But don't be in a rush. First, check your state's laws to determine how long you have to claim your prize. Many states give lottery winners at least 90 days to claim their prizes. Don't miss the deadline, but give yourself plenty of time to talk to professionals and formulate a solid financial plan before you collect your money.

3. Hire a team of professionals 

When managing the money you've won, it's best to avoid doing it alone. Instead, hire a team of trusted professionals to guide you so you don't make costly mistakes. It's worthwhile to pay experts for guidance -- especially when money is involved. Consider hiring professionals like a lawyer and financial advisor. They'll help you strategize what steps to take so you make the best choices for your lifestyle and goals.   

4. Don't agree to every single request for money 

Once your family and closest friends know about your newfound wealth, they may begin to ask you for money. It can be nice to help your loved ones with their financial needs, but don't feel pressured to say yes to everyone who asks for help. You want to make sure you feel comfortable when giving your money away and aren't just doing it because you feel obligated. 

5. Set and follow a budget

If you've won a significant amount of money, you may laugh at the thought of needing to budget your winnings. But it can be easy to overspend, especially when you suddenly have a large sum of money in your bank account. It's best to establish and follow a budget so you manage your winnings responsibly and stay on track with your financial goals. If you're new to budgeting, you can use one of the best budgeting apps to set spending limits and monitor your spending habits. 

Take care with your lottery winnings  

A lottery win can be life-changing. But don't get so caught up in the excitement of winning that you don't take the time to plan what to do with your newfound wealth. Some lottery winners who have won millions have gone broke in just a few years. 

Contact qualified professionals if you're unsure what steps to take or have questions. With proper care and planning, you can ensure that your lottery winnings go to good use and aren't wasted.