These are the three rules to remember if you've come into some bonus cash, a wealth advisor reveals, and it's the same principle for billionaires as it is for everyone else

People can spend years—decades even—daydreaming about what they would do if they came into some extra money. Whether it’s an increased pay cheque, an unexpected bonus at work, or a gift from family, many expect to see their lives change for the better.

But in reality, those who suddenly see their wealth balloon overnight can wind up feeling more overwhelmed than overjoyed.

“When you come into a large sum of money that you didn’t have before, your life changes,” said Leo Chubinishvili, wealth advisor at Access Wealth. “It’s a lot of pressure.” 

Whether you’ve stepped into a more senior position and your paycheck just got fatter, or your start-up has been acquired, there’s a lot more to think about than spending your newfound wealth—tax implications for starters.

It may sound like a nice problem to have, but Chubinishvili tells Fortune that all too often it results in people making big money blunders: “When the stakes are high, people tend to get nervous, make rash decisions, and make mistakes.”

It’s why he advises people who have come into a large sum of money to let their new reality sink in and evaluate what it means for their future before spending any of it.

1. Take a step back to understand what you have

Instead of going on a spending spree, as tempting as that may be, Chubinishvili advises those who have overnight success “to just calm down, relax, understand what you have and let it sink in.”

Although its advice often given to the likes of lottery winners, the financial expert said even professionals accustomed to managing their income can fall into the common trap.

For example Simon Cowell, the multimillionaire founder of the record label, Syco and television franchises The X Factor and Got Talent, has spoken out about his own early experience with success—and losing it all.

Cowell founded his first venture, Fanfare Records, in the 1980s. “Once I started to make some money, I bought a Porsche, bought a house I couldn’t afford,” Cowell recalled, as previously reported by Fortune. But after a decade of extravagant purchases, the company went under, and Cowell was “broke”.

Splashing the cash on a huge house or luxurious items without planning ahead is “the first mistake that people make”, Chubinishvili confirmed. “Just because you can [afford to splash out] doesn’t mean that you should right away,” he adds. “Take the time to process what you’ve received.”

People also sometimes believe their wealth is larger than it is in reality, particularly after tax deductions.

It’s why Chubinishvili—who advises his clients on the likes of cash flow, investing and retirement planning— recommends anyone who comes into wealth to seek advice from a financial adviser, an accountant, and an estate planning attorney to avoid making any unadvisable—or inadvertently illegal—financial decisions.

2. Create a short and long-term plan

The first thing Chubinishvili does with new clients is map out their current economic situation to develop “a plan that touches every single aspect of their financial well-being.” 

But it’s something anyone can do at home. People should start by outlining everything they currently own, from stocks and shares to equity and cash. From there, they should define their short and long-term goals.

“Maybe you want to buy a home or save money for your kid’s education or a vacation,” Chubinishvili said, while adding that individuals should allocate time frames and saving goals for each of their specific objectives. 

Meanwhile, if people want to donate some of their windfall to charity this will also need to be considered, as it impacts savings goals and tax liabilities.

“When you give money to a charity, you can also deduct your taxes, so it actually lowers your tax overall,” he adds.

To an extent, the process of wealth planning is the same no matter how much wealth a person has accumulated: “Normal people go through the same things as the billionaires really,” Chubinishvili said.

A common goal for many people is often getting a mortgage and buying a house. “If a billionaire wants to buy a yacht, they’ve still go to the bank and borrow money,” Chubinishvili adds. “The goals in general are very individualized but at a higher level they are the same.” 

Eventually, even a billionaire has to factor retirement into their long-term plans. “That goes for anybody whether you’re a CEO or you work at a gas station,” Chubinishvili said. 

3. Save first, spend later

If there’s one rule of thumb that anyone can follow—without any professional help—it’s to increase savings as your income goes up. 

Chubinishvili says most people wait for all of their expenditures to come out of their income before working out what’s left to save, but added: “The way you want to look at the equation is income, less savings, equals expenses.”

“The rule of thumb is to set aside about 10%,” Chubinishvili says. “But, again, it’s very individualized and not a one scenario fits all.” Indeed, people’s capacities to save can change over their lifetime depending if they have children or change jobs.

It’s why auditing finances and adjusting the percentage saved each month shouldn’t be a once-in-a-lifetime event. Chubinishvili insists all of this should be reviewed annually. 

“Once you implement the plan, then you want to monitor the plan, make sure that the plan goes as you’ve planned, and if it doesn’t, then you can tweak it,” Chubinishvili says. “The idea is to do that each and every year.”  

If a person has seen their salary go up they could also increase their salary contributions, while Chubinishvili suggests people who have come by a large lump sum of money could invest it to stop the capital from corroding in a low-interest bank account. 

He added: “Inflation has a tremendous influence on expenses in general so you do have to project that because if you retire at age 65 and you live until 90 years old, you have to have some type of nest egg that you have saved for those 25 years.” 

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