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Invest windfalls wisely

Despite Sweeney’s success in the entertainment industry, she doesn’t come from money. Her parents made large sacrifices to help her fulfill her dream of becoming an actress.

“I watched my parents lose a lot. We filed for bankruptcy, and they lost their house back home on the lake [the same home she bought back],” she told Women’s Health in November. “We couldn’t afford life in L.A. We couldn’t afford life anywhere.”

Her parents didn’t have a lot to offer financially, but they did offer what they could: support. Now that Sweeney’s career has taken off, she can pay them back.

But many people aren’t as careful as Sweeney. A number of people who receive a windfall end up squandering their money shortly afterward if they’re not careful.

So if you and your family come into unexpected wealth, be like Sweeney. Figure out your financial goals and start building up your savings toward them.

If that means buying your family a home, work toward getting a strong credit score so you can acquire a reasonable mortgage rate. Depending on the amount you receive, you may also want to explore buying a home in cash to avoid a mortgage.

It’s also always a good idea to consult a financial adviser who can help you maintain your newfound wealth and make wise investment decisions.

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Think about the future

If you live in a multigenerational home, or you intend to pass down property to your children, it’s important to make the proper arrangements before your death.

Personal finance expert Dave Ramsey has some advice for those wanting to properly distribute their assets upon their passing: get a will.

“If you die without a will, now your loved ones are grieving, they’re scared, and they’re headed for probate court,” as he explained in an episode of his radio show.

According to a report from Empathy, a platform that helps families navigate bereavement, it takes just over a year to resolve all financial matters after a loss — and the bills can escalate quickly. This includes everything from the cost of the funeral to ensuring every debt is settled and assets are passed on legally.

Despite the potential risks of not having a will, only 34% of Americans have an estate plan, according to Caring.com’s 2023 Wills and Estate Planning Study.

It’s not as intimidating as you might think it is to make a will — and it will save your family a lot of trouble down the road. You can now write your will from the comfort of your own home now using online platforms. However, if you do have complex estate plans, it may be best to consult with legal and financial professionals.

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About the Author

Sabina Wex

Sabina Wex

Reporter

Sabina Wex is a writer and podcast producer in Toronto. Her work has appeared in Business Insider, Fast Company, CBC and more.

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Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.