The average American can expect an inheritance of around $177,000. If you’re one of the lucky people who comes into more, then there are many factors to consider when dealing with your money that you may be feeling overwhelmed.
Large inheritances are difficult to manage, especially when you’ve never dealt with a large sum of money before. You’re likely asking yourself what to do with an inheritance so large.
Here, we’re going to talk about some of the ways you can manage your newfound money to ensure that you get the most out of it. Read on to learn the most effective ways that you can manage inheritance money to benefit yourself, posterity, and the world.
Talk to an Attorney
The first thing that you’ll need to do upon receiving your money is to talk to inheritance lawyers that can help guide you in dealing with this fortune.
These professionals will not only consult with you to help figure out next steps, but they can assist in legal matters such as signing the money over to you. They can also help settle disputes if any other relatives claim that they’re owed a portion of the money, helping you to ensure that you get what’s rightfully yours.
Pay Off Existing Debts
The first thing that your attorneys will likely advise you to do is to pay off your existing debts. This is absolutely the correct thing to do since you’ll have much less stress and anxiety if you aren’t worried about monthly mortgage and car payments. Make sure that you consider all the bills you regularly need to pay and ensure that they’re taken care of. After that, you can take a breath and relax.
Buy Yourself Something Nice
When you come into an inheritance of any size, it’s tempting to squander it buying nice things for yourself.
This is a terrible idea, but it’s good to get that temptation out of your system and treat yourself to something with your new wealth.
Don’t spend more than 5-10% of what you inherit, but get yourself that new car or home that you’ve always wanted. After that, you’ll be happy and feel ready to save or invest.
Put Money Aside for Yourself and Others
You’re going to want to save some of the money that you’ve inherited for your future. You can access this money later if you realize that you want to undertake a personal project or invest in a new business. Putting it into a savings account will also allow it to garner interest, which you can spend on new homes or relaxing vacations in retirement.
While you’re committing to saving, you’ll also want to set up a trust fund for the children and grandchildren that you love. This will ensure that they have the funds to get a college education, a nice home, and to start a family of their own.
Investing inheritance money is also crucial to your future. When you invest in the stock market, you purchase shares of (hopefully successful) companies and make money as their value goes up. This is a great way to get more funds while owning parts of companies that are doing well.
Donate to Charity
A part of being a global citizen is giving back to the community, and as someone who now has money, a great way to do that is to donate to charity. Find a cause that matters to you.
Perhaps the Trevor Project is the perfect charity if you or a loved one is LGBT, and the World Wildlife Fund is a great charity if you’re committed to saving the planet. The bottom line is to find something that matters to you and give to that cause.
Set Appropriate Budgets
After all these initial steps to inheriting are complete, you’ll need to set up a monthly budget to ensure that you don’t squander the money you have received. Almost every wealthy person will tell you that the key to a successful budget is living below your means, which is a tip that you should take to heart.
That doesn’t mean that you can never treat yourself to a nice dinner or a weekend trip. It simply means that those things should be accounted for within the budget so that you have a clear picture of where your money is going.
Focus on Personal Projects
When you have money, it’s easy to become idle. After all, there’s no point in heading to a draining nine-to-five job day after day. However, this will cause you to become frustrated and bored after a while. Besides, there are dreams that you had when you were working that mundane job that you now have the time and resources to accomplish!
So write that book that you always dreamed of having published. Start up the charity that you’ve always wanted to help fund cancer research. Travel and see the places in the world that you’ve most wanted to visit. Nothing is stopping you from achieving these goals now.
More on What to Do With an Inheritance
Coming into an inheritance of any size can be overwhelming, but it’s also full of opportunities.
Now that you know what to do with an inheritance, it’s time to look more into that treat you’ll be getting yourself that we talked about earlier on this page. Check out the ‘travel and home living’ tab on our home page to learn some of the places that you can go with your newfound riches!
Have fun and invest wisely!