If you’ve been left something in a will, and the money you’ve received is nothing to sneeze at, you’re probably wondering what on earth to do with it right now! Maybe you never expected a windfall like this, or maybe you’ve never had to manage this amount of money before – either way, we’ve got some tips that could help out.
After all, you’ve got your family’s future to think about, and receiving an inheritance is one of the best ways to sweep a few financial problems under the rug. But you need to be careful here, and ensure you come up with a proper plan to follow. And with all that in mind, here’s a little advice on how to use inherited money to full effect and plan a better financial future for your family.
Get Rid of Any Debt First
Debt is the biggest money plague around, and thousands of households are in some form or another. You may be the same, and it may cause you to lose sleep at night wondering how to pay it off. Now you’ve got an inheritance, you’ve got a better chance than ever to wipe the slate clean.
Credit card debt alone can be difficult to face, but if you’re paying off bigger loans with predatory interest rates, use some of the money you’ve inherited to get the sharks off your back. You can both improve your credit score and lower your stress in one fell swoop. This’ll also mean you have no debt to pass onto your kids when the time comes.
Create a Savings Pot
Saving the money is going to be your first thought. Now you’ve got a real nest egg to sit on, as well as an emergency fund to dip into whenever you need to. But be sure to choose the best savings account for your purpose here.
You want something that’s going to pay you back as the money sits and accumulates, and that may mean moving your inheritance around from time to time. Whether you’re already with a bank you trust, or you want to work with a credit union to make the money work for you, the choice is yours. Go into it with open eyes, and some good reviews to help inform your decision.
Consider All Your Investment Options
If you want to invest, now is the best time to do so. You’ve got a bit of money behind you that you’ve never had before, and if you section it out into savings and investment pots, you won’t be any worse for wear if something goes wrong. But before you put any money on the line, you should consider all the potential options, including funds, cryptocurrency, and various physical assets.
Real estate is one of the best assets you can have under your belt. Not only can you buy a house to sell for a bigger price later, but you can bring in tenants, and have a whole new form of renewable income flowing into your household. You could also look into luxury real estate, and rent out vacation homes during peak season.
Plus, choosing this investment will mean you have something physical and valuable to leave behind as an inheritance for your kids.
Work with an Advisor
If you’re really not confident in your ability to handle your new inheritance, turn to a professional advisor to help you out. You’ll have to fork out a bit of the money for the privilege, but it could be a good decision in the long run. After all, working with an advisor can help you to formulate a plan that’s truly personal to you.
During this consultation, you can go through potential tax issues, where to put the money while you make further decisions, and how best to build an investment portfolio if that’s what you’re interested in. Any advice will go a long way here, and can help you to feel less alone while dealing with such a high stakes situation in your life.
If you’ve just inherited some money, make sure it’s secure and safe, and then think about new things to do with it. Pay off any debt you have accrued, save it, and then turn to investment. If you’ve always wanted to turn a 5 figure sum into 6 figures and above, this the perfect opportunity to do just that!
