Congratulations, you've just won the lottery – here's what you should do next
It's early in the morning, and your phone's ringtone starts to buzz. It's The Lott, and they've just informed you that you're the sole winner of the jackpot the night before.
Your heart rate spikes, you close your eyes and imagine everything you can possibly do with your bags of cash. Then reality sets in. Now what?
It's been more than two weeks since one lucky Powerball ticketholder nabbed the only division one prize of the $100m Powerball jackpot.
Weeks later, they are yet to claim their winnings, with The Lott revealing the mystery division one winner purchased their winning ticket from a newsagent in Bondi in Sydney.
So, if you were the lucky one to hold the wining ticket, what exactly would you do first?
Take a deep breath
It's natural to get overworked as the reality of winning the jackpot hits you, so experts recommend you stop, take a deep breath and give yourself time to think.
There's no need to reveal your identity, either, even to family or friends, RSM Financial Services Australia director Grace Bacon said.
'There will always be someone in your circle that feels they would like financial assistance, and you may feel pressured to assist them,' she told NewsWire.
'It's sad to say, but money can end very long-term family and friend relationships – I've seen it happen. You can get very caught up in what people need from you versus what you need for yourself.'
White Rabbit Advisory financial planner Nicola Beswick said winners in Australia had the 'legal right to stay anonymous' to protect their 'safety and decision-making'.
'As hard as it is, keep quiet!' she told NewsWire. 'You will find lots of new best friends if you don't. Stay calm, remain anonymous, and book a confidential meeting with a trusted financial adviser.'
Lock your winnings down
Before you begin splashing your cash on a new home, holiday or paying off your debts, Ms Beswick recommends parking the winnings in a bank while you work on your 'long-term strategy'.
However, she warns against relying on 'one account or bank' to reduce risk and allow 'time to plan properly before making any big decisions'.
'Spread the funds over multiple high-interest savings accounts or term deposits to stay within government deposit guarantees ($250,000 per institution),' she said.
Do winners have to pay any taxes?
Thankfully, the ATO does not classify a lottery win as an income, meaning the ticket holder will be awarded their full jackpot.
With that in mind, Ms Bacon said winners may need to fork out a bit of cash if they are a 'regular game show contestant' or make any investments with their winnings.
'Keep in mind that once you start investing, you may have to pay tax on your investment earnings,' she told NewsWire.
Avoid impulse spending
As tempting as it is to splurge as soon as your bank account becomes fatter, financial advisers urge winners to avoid making too many rash decisions.
Ms Bacon told NewsWire that winners should steer clear of impulse spending, no matter how alluring the idea could be.
'It may be very tempting to go on a shopping spree but ensure you set some smart financial goals so that you can use this new-found wealth to create something more sizeable for the longer term,' she said.
Don't quit your job (just yet)
Ms Beswick also advised winners to 'avoid making any decisions straight away'.
This includes calling your boss and handing in your letter of resignation.
'Don't quit your job on the spot,' she said. 'Take some leave so that you can think clearly.
'Protect your identity and your future by taking things slowly and getting professional advice.'
Make a list before you spend
With lashings of cash at your disposal, it's easy to list off all the things you could spend your money on – holidays, fancy cars or a cheeky shopping spree.
However, it's extremely common for people to lose their winnings almost as soon as they pocket it due to unregulated spending or failing to pay back debts.
Ms Beswick said you could avoid this by writing a list with two columns – one titled 'need' and the other 'want' – before spending anything.
'The 'need' column will include things like buying or paying off your home, helping out family and investing a certain amount,' she said.
'The 'want' column will have material things that are not a priority – a holiday in Rome, a new Lamborghini, a private jet with a personal chef and gold-plated seatbelt buckles.'
Have a 'bucket' strategy
At the end of the day, the best way to avoid lottery wins slipping through your fingers is by having a solid financial plan.
Ms Bacon recommends using a 'bucket' strategy to keep an ongoing pool of money to dip into whenever required.
'Money is not a bottomless pit no matter how big the win is,' she said.
'I suggest having a 'bucket' strategy so that you reward yourself and loved ones to celebrate the win (it might be that big holiday you've always dreamt of or that particular car), but having medium-term and long-term buckets for the bulk of the winnings will help fund your future.'
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