What if you woke up tomorrow to find that you had unexpectedly received a large amount of money? We don’t have to tell you that an influx of cash overnight can change a lot: your relationship to money, your economic power, your ability to hit your goals. And it can cause more than financial shockwaves. Like any surprise, it can rattle your emotions, too. 

Depending on how this sudden wealth came into your hands, it could bring about relief or elation or unease or guilt. It could make you feel fully in control of your life — maybe for the first time ever! Or it could feel like a heavy weight of unwelcome responsibility. Or it could be a mix of all of the above. 

To put it another way, a financial windfall can be complicated. So we put together this quick guide to cover the basics: what a financial windfall is, which strategies can help an influx of cash feel less overwhelming, and how to make this newfound wealth do the most for you.

What is a financial windfall?

A financial windfall is a lump sum of money you didn’t expect to receive. It can happen in many ways: 

• An inheritance

• Selling an asset like ‌property or a business

• Company stock vesting or an IPO 

• A work bonus

• Winnings or prize money

• Lawsuit settlements

• A tax refund

It can be thousands or hundreds of thousands of dollars — even millions. No matter the amount, it’s an opportunity for you to improve your financial situation. Because money is never just money. And that applies here: A financial windfall is the power to live the life you want. 

The power to reach your goals sooner. 

The power to take a career break, pivot careers, or even start your own business. 

The power to buy your own place (or that vacation home you’ve been dreaming of).

The power to leave a toxic relationship or that toxic boss once and for all.

Power to splurge a little, invest a little, donate a little, because balance. 

How common is receiving a financial windfall? 

A financial windfall happens more often than you think. Say you work for a company that grants company stock or gives bonuses. Then you might receive a financial windfall annually. But more often than not, a financial windfall happens from a sudden, one-off event. And that’s what makes them so difficult to predict and plan for. 

Inheritance is one of the most common ways, specifically among white, affluent families (who are three times more likely to inherit than people of color due to centuries of legal privilege and economic advantage). Over the next few decades, we’ll see an unprecedented amount of generational wealth shift into the hands of more women than ever through the Great Wealth Transfer. These inheritances are so massive, they have the potential to reshape society (check out our Women and Wealth survey). 

How can I make a financial windfall less overwhelming?

Pause. You don’t have to make decisions about what to do with your money right away, especially if you received your unexpected fortune for a difficult reason, like the passing of a loved one. We recommend parking it in an FDIC-insured, high-yield savings account for the time being so it’s safe and earning some interest while you navigate your next move.

Understand your values. To take the pressure off deciding the “right thing” to do with your windfall gain (and to avoid a “where’d it all go?” scenario), understand your core values. Once you’ve identified ‌your top principles — the things that subconsciously influence every choice and action we make — you can use them to validate your toughest financial decisions. List out your top three to five values and why they matter most to you. If you received your financial windfall from someone close, you might try to draw connections by exploring how your core values relate to your perception of theirs.

Get clear on your goals. People will probably have opinions on what to do with your money. But that shouldn’t matter, and it will matter much less once you prioritize your goals. Even though their (unsolicited) financial advice might be solid (“Save a chunk of that money!”), their life, their motivations, and their dreams are all just different from yours (... but I already have a fully-funded emergency fund). Above all else: your money, your money moves. 

How should I handle a financial windfall?

Know your “Now” steps

It can feel more manageable when you know the essential money moves that require immediate attention. Call these your “Now” steps. We’ve outlined three that anyone who experiences sudden wealth could consider:

“Now” step 1: Assemble a financial team

These professional experts can give advice, help you cover all your bases, and identify blindspots along the way.

• A financial advisor to help you invest your new assets, build (or tweak) your financial plan, and provide clarity and confidence on where you’re going.

• An accountant to help you get in line with tax laws and file your taxes each year.

• An estate attorney to give advice and draw up legal documents (like wills and trusts) to help you preserve your wealth during your life and for your legacy.

• An insurance broker to help you get enough (of the right type of) coverage to protect you, your loved ones, and your belongings. 

“Now” step 2: Build a financial foundation 

Take these steps with your lump sum of money to help create lasting financial security and stability. Done it already? Skip to the next step.

1. Pay off any high-interest debt — that is, debt with an interest rate over 10% — including credit cards and student loans.

2. Set aside some money for a financial emergency (and possible taxes).

“Now” step 3: Prepare for financial requests 

Consider how you’ll deal with different people asking for (or demanding) a share of your sudden wealth.

If friends and / or family members ask you for money: If you want to give to a loved one after they’ve asked for your help, it may be good to ask them to keep your support as private as possible so that you don’t get a reputation as the International Bank of You. 

But if you don’t think that giving a friend or family member money is the right decision for you, it’s OK to decline. Again, your money, your money moves. We can’t promise that this conversation will be easy. But if it becomes necessary, one approach might be to explain that you aren’t just sitting on a pile of cash — that your wealth is tied up in investments and not available or liquid, which makes giving money to others difficult and complex. 

If non-profits ask you for money: You may start getting donation requests from non-profits (or people who hold those non-profits dear to their hearts). Charitable giving is wonderful, and maybe you’ve already donated to some as a part of your financial foundation. But there are nearly two million non-profits in the US alone. You’ll inevitably have to draw the line somewhere.

One thing you could do is open a donor-advised fund, which would let you invest some of your assets for the purpose of giving to charity. You’d invest them via your donor-advised fund today, give them the chance to grow over time, and then donate to your non-profits of choice down the line.

Know your “Soon” and “Later” steps

Once you’ve completed your “Now” steps, let’s start thinking about what’s next. To do this, make a list of “Soon” steps (ones that are important but not urgent) and “Later” steps (ones that can be tabled until you have time to plan). These may include:

• Invest intentionally toward your goals like retirement, saving for a child’s education, buying a house, or starting a business.

• Splurge a little.

• Save for big non-monthly costs, like travel or home renovations.

• Help friends and family with their goals, like contributing to an aging parent’s mortgage or a niece’s college education. 

• Donate to businesses, causes, and communities doing good. 

For more personalized support navigating the ins and outs of a financial windfall, consider booking time with Ellevest’s all-women financial team — we’re here to help this feel less overwhelming. 

Disclosures