First of all, our deepest condolences for your loss. Truly. But here comes the aftermath, INHERITANCE. After a big loss in your life, here’s a big gain that makes you think, “I will never have to work anymore!”. Oh well, lose that thought and drag yourself to the ground because where do you think the phrase, ‘Money flows like water’ comes from?
Inheritance is much like power; it comes with responsibility. You are left with a big sum of inheritance which gets your mind twirling and whirling, and you ask yourself, “What do I want to do with this much money?”. Now, hold your horses and check out some things you can do upon receiving the inheritance.
1.PAY OFF DEBTS
Your late loved ones did not leave you the inheritance for no apparent reason. In this worrying economy, you have to prioritize your goals. Part of it definitely includes paying off your existing debts. However much the inheritance you receive, it will only take you so far and will not sustain you a lifetime. If you have student loans, car loans, mortgages, personal loans , etc., start paying them off! These will drown you in the future and keep you off guard as you reach adulthood. It’s not easy but it is manageable. Your elders have helped fund you through your education years, now is the best time for you to repay them (or you, since it’s your loan).
2. FUTURE KIDS COLLEGE FUND (We ‘kid’ you not)
If you think you are benefitting this inheritance alone for the rest of your life, you are wrong. Short term wise, you are safe to spend a little on daily expenses. However, you have to always be 10 steps ahead in life. Start funding for your future kids’ college as how our parents did before. Nothing in life comes easy (or free). Kickstart your future kids’ college fund earlier because who knows how expensive it will get in the next two decades. It will definitely help you save up for something more special *wink wink*, especially when your future kids go off to college.
“It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” - Robert Kiyosaki
This is never the case for many people because sometimes we are blinded by how needy we are financial-wise and we often forget the roof above our heads and food on our tables. On the other hand, some out there are living under the bridge or not even getting any meals daily. But here is a chance for you to redeem your guilt and contribute to organisations that serves the underprivileged. Your inheritance will thank your selfless act later on.
4. HOLIYAY YAY YAYYY!
Before we get excited on this because it seems as if other ideas are not siding you, here’s the deal. Do you want to go on a holiday and worry that you have yet another 9 years of car loan to settle? Or perhaps 10 years of college loans? How about savings? You would not want to live in the same house or drive the same car for the next 50 years, would you? This brings us to the magnitude of your splurge. If you have hoped to travel to Maldives, Bora-Bora Island, Rio de Janeiro, Santorini and many other dream vacations, now might be your time if and only if you are not left with a penny or two after spending on it. Plan your budget according to a portion of the inheritance, not all of it. Hence if you scroll up, you will be able to see ‘PRIORITIZE YOUR GOALS’ in the first point.
When you receive a windfall, stay calm and most importantly, take your time to grieve your loss. It is a hard and stressful time, plus you must be loved very dearly if you actually received a portion of the inheritance. So, it is a great deal to know what to do with the inheritance. Get your family together and get an advisor to help you plan your way through this big chunk of inheritance. Now, let’s get that planning started! (Or not, your call!)