First, let me say I’m sorry for your loss. As someone who’s recently been through a death in the family I know how devastating it can be. During this time you may come into some money, but it is not a time you should be making financial decisions. Most experts agree – take your time before spending any inheritance.
Make sure that you take all the necessary steps – canceling any social security, turning off the phone, (if you are responsible) and then take a step back.
The amount of money you’ve come into doesn’t matter – it could be $5,000.00 or $500,000.00 the very first step is to allow yourself to grieve. Take as much time as you need and don’t rush into any decisions.
If you’ve been following a budget – great! Your job of spending will be much easier. You should already have a list of what you are saving for, and where the money should go. Simply add the inheritance to your budget, and follow the same guidelines you’ve been doing with your budget.
New to this budgeting idea? Then it is a bit trickier – you may want to rush out and purchase a new car – or take a vacation – and that may be what you end up doing, but first, please please, sit down, and write out a budget and a long long wish list of what you would like to spend money on.
If you belong to a church, remember to set aside your tithe, or give to your charitable organization of choice.
Then, look at your retirement account, debts, emergency fund. Then make rational well thought out decisions.
Remember – IRA’s should be rolled over to avoid extra taxes – and it is a great way to jump start your own retirement account.
What did we do?
Gave away a bit, paid a few small debts, funded our emergency account, put a little into retirement, purchased a couple of small toys (like a new laptop for me!) – and put some away for a family vacation. We also put some into our child’s and five grandchildren’s 529 college funds!
Money well spent – and all previously thought out – as we already had our budget and wish lists.
Sticking to a budget
Getting through grief- loosing a parent