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Life After a Lottery Payday

By Nicole Seghetti - Apr 5, 2013 at 4:15PM

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How to live like (and remain) a multimillionaire.

After hitting the jackpot, you've protected yourself, assembled your professional team, and claimed your lottery winnings. Now what?

Decide how you want to spend your time. Even though you're wealthy, you'll need to do something with your days. Many people derive a lot of their self-worth from work. Some individuals really like what they do for a living. If you love your job, explore working part-time. If you want a change, consider a different career or going back to school. Think about starting a foundation for that cause you've always been passionate about but never had the money or time to fully pursue.

Pay off your debts. Whether it's credit card debt, a mortgage, or an outstanding loan from your aunt, write a check to any and all creditors and individuals to whom you owe money.

Give yourself a small spending spree. Individuals who come into money often go broke in the early stages of their millionaire status. Give yourself an initial allowance, but proceed with caution. Sock away the rest of your winnings. If you elevate your spending habits to an unsustainable level, winning the lottery can be a one-way ticket to the poorhouse. You'll run out of funds and no longer be able to afford your newly extravagant lifestyle.

Make a budget and stick with it. If you continue the reasonable spending habits you developed before that lucky day, you'll always have plenty of money. Buy some big-ticket items you need, and even a few you want. But then restrain yourself to live off your interest and keep the principal intact. Work with your financial advisor to develop a realistic spending strategy so you don't end up going from diva to dumpster-diver. Then return to the life you led before you hit the big-time.

Think long-term. You might have enough money to buy an island, but you still have to maintain it. Oftentimes, people who've come into large sums of money buy properties without knowing what it'll cost to run them. Carefully consider the ongoing expenses involved before buying anything. How much will property taxes and utilities cost? And think twice about buying that fleet of Ferraris. Lavish villas and vehicles require expensive upkeep.

Treat your family well. Your loved ones were there for you and supported you long before you struck it rich. It's likely you want to treat them to something special. By all means, buy your spouse that Rolex she's always wanted! But you're under no obligation to relieve anyone else's financial stresses. Your loved ones are there to help you. And they'll hopefully keep you grounded. But remember to grab that sanity contract and review it if you need to.

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