Receiving an expected or unexpected inheritance can be an emotional and overwhelming time. The events that led to this windfall may have occurred through loss or some other life event.
Here are some steps to take to help make the most of your inheritance:
- Take your time – allow yourself time to step back and process what has happened.
- Remember where it came from – think about how long it would have taken you to save up what has been given to you. Being mindful of the life-energy that went into building up these assets can lead you to using it more responsibly and intentionally.
- Hire professional(s) – an accountant, attorney, financial advisor and even therapist can all assist you with not only the emotions but the logistics of what this money can do for your future. Talking with professionals you trust will be key to planning your next steps and ensuring you understand the implications of each possible decision.
Here are a few ways you may want to use your inheritance:
- Create or pad your emergency fund – save three to six months’ worth of expenses for unforeseen emergencies in the future.
- Invest in yourself – add money to your investment account, retirement account (if applicable), or even your own education.
- Pay down expensive debt – take a look at your debts and consider paying off debts with high interest rates.
- Pay education expenses – start saving money for your children’s college education.
How you manage your inheritance could have a great impact on your life. Working with a financial advisor and other professionals can help you make the most of it.