Mattia Roach still gets around Toronto on the subway. In a city where detached cottages can sell for $1 million, Mx. Roach, using their/their pronouns, still shares an apartment with his brother despite having more than enough money to buy a house.
For Mx. Roach, 24, the youngest Jeopardy Super Champion ever The $560,983 winnings did little to change the way they lived their daily lives. They didn’t buy a car or show off anything more than a few new clothes and a few trips to the record store.
Despite the common misconception that a windfall of money—whether it’s a win on a game show, an inheritance, or the settlement of a lawsuit—will drastically change a young person’s life, it’s no guarantee. It of course allows some to buy a home or adventure around the world at a young age. But for those receiving money after the loss of a loved one or learning to manage large sums of money for the first time, the windfall can be overwhelming.
mx. Roach, who grew up in Halifax, Nova Scotia, had planned to attend law school, but is doing public speaking and podcasting at the moment. They said, “School isn’t going anywhere, and these other things aren’t going to be around forever.” “Once I had a very good idea of what I was going to do with my life.”
Now, perhaps surprisingly, Mx. Roach now has less clarity than he did before his victory. “There is a sense of uncertainty and unease,” they said. “I have more than ever.”
For Mx. Roach, “Danger” offers a sort of relaxing exhale, the knowledge of having a cushion to make new, different, and perhaps more interesting choices in their lives.
They said “I feel pretty much the same as I did before”. “I always feel guilty for spending money.” However, having a six figure in the bank provides them with a welcome safety net should they become ill, unable to work, or need their mother’s help. mx. Roach’s father died unexpectedly when they were competing in the show.
“I don’t know yet what my lifestyle will be like,” they said.
For Alexandra Merullo-Stevegen, a 25-year-old writer in Fort Collins, Colorado, a $10,000 fellowship changed her life forever. She was a scholarship student during her final two years at Phillips Exeter Academy, a prestigious prep school, with classmates who were wealthy enough to fly to Europe on a private jet for the weekend and whose campus buildings were named for family members.
“I couldn’t keep up with my friends who got paid a lot of the time,” said Merullo Steffgen. “I had a minimum wage job two days a week in the library.”
She’s watched her older classmates worry about which college to go to and knows that’s not the path she wants. Instead, she applied for two fellowships, each of which would give her the financial freedom to take a gap year and travel. At the age of 18, she won a $10,000 Phillips Exeter Academy Scholarship which allowed her to do so.
“It was very exciting,” said Ms Merullo Steffen. “It was an amount of money that I could barely comprehend at that age. It was a really special feeling.” volunteered in Naples, Italy; climb the Camino de Compostela in Spain; spent time in Berlin, Ireland, and Florence, Italy; He went on a Buddhist retreat. She spent the last of her money on a trip to Cambodia.
She said, “I just spent the money to enjoy myself, which I don’t do anymore.” “I allowed myself to enjoy myself more than ever. I always felt like an overly responsible person to make sure no one suffered because of me. That was the greatest gift he gave me.”
The irony of having a windfall in your 20s or 30s? It can provide newfound freedom, but it can also feel overwhelming, especially if your peers are still in early-stage careers, saddled with student debt and simply can’t relate to the sudden challenge of managing five or six figures.
Nicholas Frieda, a Seattle tech worker, was 26 years old when he received a $100,000 inheritance from his grandmother. The gift brought pangs of grief because his father had already died, which meant that the money would go directly to him.
“I’ve heard people talk about inheritance in old movies,” said Mr. Frieda. “It was something other people did.” When told to expect a payment, “I thought it wouldn’t be much at all,” he said.
Mr. Frida said he was initially uncomfortable with the inheritance. He eventually decided that the money should go towards buying a home rather than being an unnecessary splurge and went in search of advice. He was surrounded by much older, higher-income workers in his industry who owned multimillion-dollar homes.
“It was difficult to discuss because we weren’t using the same unit of measure,” Mr. Frieda said of the differences in purchasing power.
Still, it was a strange feeling, he said, to be able to “have a conversation with people five, 10, 15 years later” in their careers. Two years after receiving the money, Mr. Frida put two-thirds of his inheritance into buying a house, where he now lives with his fiancée.
Gina Knox, a 30-year-old financial coach in San Antonio, had two windfalls at a young age: $15,000 at age 22 and $100,000 at 28. The first was money left from her parents in her college account after graduation, which came as a shock.
Mrs. Knox earned $5,000 and traveled for a month across South America, riding horses in Argentina, tasting hot springs in Chile, and riding a bus over the Andes. “I had a blast,” she said.
But she stumbled over what to do with the rest. “I sat on it for months, not knowing what to do,” she said. “I was completely blown away that I might screw it up or spend it.” I was embarrassed and confused thinking, “This is too much money.”
By the time Mrs. Knox received a family inheritance of $100,000, she had more confidence thanks to her father, who taught her money management. “I’ve already saved and invested $100,000 on my own, so this wasn’t the first time I’d run six figures,” she said.
Miss Knox gives advice to others about managing their money. “If you don’t know what to do with it, it’s critical that you do nothing,” she said. Ask a family member or financial advisor when you have large sums of money that you are not strategically or emotionally prepared to handle. Spend some time imagining what you want your life to be like.
Her splurge is driving a Mercedes station wagon, a purchase that gives her everyday pleasure.
Those who come from low-income families are less apt to seamlessly integrate windfall gains into their lives because managing large sums of money is a new skill they need to master. Stephen M. Hughes, 36, an Atlanta-based financial therapist, is a first-generation American and knows the mess of emotions a sudden influx of cash can stir up. Fear, shame and guilt are three common issues he encounters with his clients.
“There are so many emotions associated with money, and there is a rush of inheritance endorphins, but you may also feel regret that a survivor has more money than your family or neighborhood ever did,” he said.
A windfall can also attract new appeals for help. “You may now feel like a tap for your family,” said Mr Hughes.
Your first phone call should be with “the person you respect most for how they manage their money,” he said. “Ask who their accountant is.” Your second phone call should be to a fee financial planner. “Once you have these people on your team, you can get some ideas from them,” he said.
If family or friends come to ask for money, Mr Hughes suggests giving yourself some guardrails. He said, “Sometimes our eyes and our hearts are bigger than our wallets.” Low-income recipients and people of color often already financially support both younger and older relatives at the same time and can be seen as the family’s financial savior or anchor.
“Financially fix yourself first,” Mr Hughes said.