Saying No to One Thing is Saying Yes to Another
Getting extra money is something most of us dream about -- and it can happen at any time. Whether it's a court judgment, inheritance, or even a lottery win, extra money is always welcome but it can also arrive with some heavy baggage.
You've heard about the "lottery curse." Although there are many exceptions, lottery winners often hear from long-lost relatives and friends with special requests. You could be inundated with demands before you've decided how to handle your financial windfall.
I think it's worthwhile to consider how the people who already have significant wealth handle requests for money from relatives or friends. U.S. Trust studied how more than 1,600 U.S. households with a net worth of $1 million and higher gave to charity in 2018.
The survey found that over 90 percent of wealthy women surveyed gave to charity in 2018, and 87 percent of wealthy men. These wealthy donors decided what causes they'd support in advance and how much they'd donate.
The same process is probably a good idea for you. Think about how you'd handle a financial windfall of various amounts:
Modest: $1000 to $5000
Medium: $5001 to $25,000
Large: $25,001 and up
What, if any, of this money could you afford to give away? If you received $25,000 in a settlement, could you afford to give 10% -- $2,500 -- away?
Before you decide if you can part with any of your windfall cash, look at your financial situation. Prioritize your needs and plans first.
Don't guilt yourself out of your money
Money experts know that we tend to think differently about cash we get from a financial windfall, like a tax refund or lottery prize, than we do about the money we earn on the job. It's natural to think we can spend this extra money any way we like.
But would you give your whole paycheck to a relative who asked? How about paying your relative's rent out of your pay while letting your own go unpaid? If you think about it this way, there's no reason to feel guilty about saying "no" to friends or relatives asking you to share a financial windfall for non-emergency reasons.
Find a way to say "no" without hurting their feelings or yours
Most of us know that the quickest way to end a friendship is to lend your friend money that they don't pay back. Your friends and relatives may be hurt when you turn down their requests for money.
Don't "ghost" your family and friends if they ask for money. The best policy is to respond simply and directly. Of course you can ask for extra time if you're genuinely considering their request. A phrase that works is: "I've got a rule (or policy) not to give money to (family) or (friends)."
You can offer to do something for them instead of just giving money. For example, if your relative asks you for money to buy a car, you can help them find a car loan or negotiate a deal they can afford.
Your money is your money regardless of its source. If you do receive extra money, plan ahead how you're going to spend or invest it, and decide how you'll handle requests to share.
Written By: Amy Casil
Amy Casil is a single mom, college teacher, business planner and affordable housing executive who lives in Southern California. She loves outdoor living and animals and is passionate about helping women to avoid her financial mistakes and learn from her successes.
Our content is created for educational purposes only. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Vantis Life encourages individuals to seek advice from their own investment or tax advisor or legal counsel.