PROTECT

For most people, receiving a significant amount of money in one transaction is a once in a lifetime opportunity. Figuring out how to deal with a sudden influx of money can create what experts call “money shock”. Planning ahead and thinking about what you would like to do with your ESOP pay-out will help you emotionally prepare for this significant event and help you make the most of your pay-out.

Prepare a budget by setting aside rand amounts for each piece of your plan. This will help you understand where your money is going and how you will be spending it. It will also serve as a guideline to ensure that you execute your plans once you receive your pay-out.

A financial advisor will help you understand your current financial situation. They will review your assets, your debt and any insurance policies you may have. They will assist you with complex financial matters and will help you develop a plan to ensure your long term financial well-being.

Debt can prevent you from realising your financial dreams. Paying off your debt will not only reduce the number of bills you will have to pay but will also reduce your stress levels!

An emergency fund will help you with unexpected expenses without having to borrow money. It is recommended that the rand amount of your emergency fund be equivalent to at least three to six months of your living expenses.

Investing in your child’s education will ensure that they reach their full potential.

Do something special that you could previously not afford to do. Start a fitness goal by joining a gym, cycling or athletic club. Do a training course and learn a new skill or start a new hobby.

Boosting your retirement fund savings to ensure a comfortable retirement is one of the best investments you can make.

It is a good idea to review your will whenever a major life event occurs, such as a family birth, marriage, divorce, or death. Receiving a significant amount of money also qualifies as a life event. Your ESOP pay-out serves as a very good reason to review and update your will.

Relatives and friends you never knew existed and financial sales people may contact you to separate you from your money. Watch-out for too-good-to-be-true opportunities. Stick to your carefully laid out plan and just say “no” to unsolicited pitches.

A financial windfall can turn the most conservative person into an impulsive shopper. If your ultimate goal is to create lasting wealth, then take the time to consider your future needs, not just what you need and want today.

If you are planning on investing in a new car or house, make sure that you have thought about car and household insurance as well as the cost of maintaining the home or car. Whatever you do, don’t rush. Take a breath and plan ahead. This will allow you to enjoy the process and make more thoughtful decisions to ensure that your ESOP pay-out assists you in changing your life.