When you find a lot of money sitting in your bank suddenly, possibly from inheritance, it can be very difficult to make good decisions—especially if you’re a 20 something.
Properly called a windfall, people have a strong tendency to treat this sort of unexpected money differently from normal income. And, as a result, they tend to spend it poorly.
But how can you avoid this?
Start with the Basics
The best thing you can do with this kind of money, first off, is to make sure you have easily accessible money for the next three to six months’ worth of costs.
This is your emergency fund, and your lifeline in case anything happens.
Find a Professional Who Knows What They’re Doing
The next step when you’ve come into a large inheritance is to get a professional to help, like a CFP.
If you happen to be in one of these six states with an inheritance tax, this can be especially helpful.
Get Rid of Those Debts
The best thing you can do next is to get rid of any debts that are weighing you down. For people in their 20’s, this can typically be student debts.
Especially if you’re paying minimums and end up paying more in the long run, it’s hugely helpful to dial these down as soon as possible.
And the Other Options
And of course, spending it in other ways isn’t bad either, once you take care of the more mundane aspects of financial responsibility.
Want to open a business? Looking for a home? Want to save more for retirement?
All of these are valid options—especially when you’re younger, all of these are fairly wise investment choices compared to, say, incredibly expensive brunching.
The important thing is that you’re making financial decisions with your long-term future in mind.
Want to know more about how to use your inheritance money? Call Blisk Financial Group today.