One day, you’re crunching the numbers in your savings passbook. The next, you received a call from a lawyer who told you that a recently deceased unmarried relative named you as an heir. So, now you have tens of thousands of dollars in your bank account. You were never really good with money. That was why you were crunching the numbers and trying to survive until the next paycheck. But you’re a bit smarter now, too. It means you know you have to invest it so you won’t chip away into it until it’s all gone.
Don’t be in a rush. You’re not forced to do anything for now. If you’ve inherited a property, talk to a property tax accountant specialist first to figure out how to liquidate the assets and if there are unpaid property taxes. Don’t jump for joy just yet. You should figure out first if this is a blessing or a curse. For all you know, you could be facing years’ worth of unpaid property taxes. That’s going to dampen the value of the inheritance for sure.
Pay off Your Debts First
Look, there’s nothing like sleeping at night knowing you’re not indebted to anyone—banks, credit card companies, family members, friends, etc. List down everything you owe and try to make a dent on it by paying off all of them or paying off a huge chunk of your debt. You can decide to invest a portion of your inheritance, so you’ll have a better chance of multiplying the money.
Talk to Experts
You’ve admitted that you’re not really good with money, so why are you holding on to it and trying to make the decisions yourself? Talk to a financial planner. Start thinking about investing your money in worthwhile ventures. It can either be on the stock market or some promising startups. You could even decide to start your own business.
Consider Payout Options
You can opt not to get the money in a lump sum. If it’s a large sum of money, talk to a financial expert who can manage the funds. You’ll never have to see a dime of that money instead when you receive the monthly payouts from the dividends of the investments. This option will stop you from making irrational decisions with a huge sum of money in your savings account.
Create an Emergency Fund
How much savings do you have in your bank account? Do you have a separate emergency fund worth six months of your living expenses? This is a great time to set aside the money you need for six months. This coronavirus pandemic should have taught you that it pays to have an emergency fund you can tap when the going gets tough. Save up for a year if you can.
The goal after getting a sudden windfall is to make sure it won’t go to waste. Make sure to plan for the future, so you won’t have to work until you’re in your 70s. Be smart about where you’re going to put your money.