Most people think that winning the lottery would be like having a dream come true. You could buy a new car. You could by a new house or that boat you always wanted. Looking into debt solutions would no longer be an issue. Unfortunately the reality is that this dream often turns into a nightmare for people who win the lottery.

Typically when someone wins the lottery debt settlement is the furthest thing from their mind. If you won the lottery today would you settle credit card debt, or would you go shopping? Would you manage your money, or would you start spending it? The statistics show that a lot of lottery winners do the latter, and many quickly find themselves broke. You don’t have to fall into this trap though.

It is only human to want to splurge if you have a large sum of money basically given to you. This is not to say that you can’t buy a new car and treat yourself to a few nice things. Rather, it is about moderation. A good rule of thumb would be not to spend more than 5% of your winnings right away. That way you will be left with 95% of the loot to invest.

If you don’t already have a financial advisor, get one. Professional advice can be instrumental in helping you deal with and hold onto your money. This does not mean that you should rely on your financial advisor completely though. Learn how to invest and save money yourself by reading books, taking classes and researching online to help you manage your money.

You need to set a budget. Setting a budget is not about being frugal. Instead, setting a budget is about being realistic and sensible. Think of it as figuring out how much you can afford to give yourself as an allowance without draining your new fortunes.

You can reduce the likelihood of going broke after winning the lottery if you take these simple steps to manage your money. You can buy some nice things and even take a vacation. But once the initial spending spree (which you did in moderation) is done, be smart with your winnings. You don’t want to be the next sad lottery story that hits the newsstands.