Receiving a portion or all of your inheritance, whether as a reward or due to the passing of a family member, often puts individuals in a better financial position. However, this injection of cash into one’s bank account can easily go to waste. If it’s not used wisely you could very well end up with more debt in the long-run.
There are a variety of options available to individuals who receive an inheritance of monetary value. It’s important to do adequate research about how to consolidate, preserve and grow your inheritance, rather than spending it recklessly – only to be left with nothing. More worryingly, debt may also be inherited as a result of the passing of a family member. Managing this can be tricky if not properly facilitated to fit into your monthly budget. Here are tips to follow when receiving an inheritance:
Take a step back
When you receive the payout, it’s important that you evaluate what you have received and come to a rational way forward. In the case of inheriting debt, make sure that you understand the gravity of your situation. It may be a good idea to contact a qualified debt counsellor for advice and resources regarding the next steps.
Always a crucial step in any financial venture, creating a plan on how, when and where you will use your inheritance will allow you to map out exactly how to make the most of it. Setting objectives with your new-found money will allow you to plan for the future. Employing the services of a financial advisor will provide you with a thorough understanding of what options are available to you.
Pay off some of your high-interest debt
If you have received enough money and are able to settle or make bigger payments towards your personal debt, then do so with a portion of what you receive. It’s also a great opportunity to place some of these funds towards your retirement as well – securing your future.
Invest the rest
Rather than recklessly spending your inheritance, explore the variety of ways in which you can save and grow the money that you have received. There are a variety of investments in the form of shares and commodities that you can invest in as well. Investing in a long-term asset, like a property, would also be a good idea.
Invest in yourself
Once you have paid off some of your debt and have a plan of how to move forward, along with a plan for investment and growth – it never hurts to invest in yourself. You can do this by boosting your career by taking on a new course or further training. You can also plan that family holiday you have always wanted to embark on.
As with any form of cash flow, if not properly handled inheritance can quickly become a thing of the past. By choosing to invest in your future and fast-tracking some of your debt repayments you will take a major step in securing your future. Making your inheritance work for you.