Suppose you’ve recently come into an inheritance, congratulations! This is a major financial windfall that can set you up for life if handled correctly.
But what should you do with this money? Many people blow their inheritance on frivolous things or make poor investment choices.
Here are nine smart things to spend your inheritance on:
1. Pay off high-interest debt
If you have any high-interest debt, such as credit cards or payday loans, paying them off should be a top priority. The interest payments on these debts can eat away at your inheritance quickly, so it’s best to get rid of them as soon as possible.
2. Invest in education
Use some of your inheritance to further your education or learn new skills. This can be a great way to improve your career prospects and increase your earnings potential.
3. Buy a home
If you don’t already own a home, buying one is a great use of your inheritance. Not only will you have a place to live, but you’ll also build equity in the property that can be tapped into later in life.
4. Invest in a business
If you’ve always wanted to be your own boss, using your inheritance to start or invest in a business can be a great way to make that dream a reality. Just be sure to do your homework first and choose a business with good long-term prospects.
5. Save for retirement
If you’re not already doing so, using part of your inheritance to start or beef up your retirement savings is a smart move. The earlier you start saving, the more time your money has to grow.
6. Save for a rainy day
It’s always a good idea to have an emergency fund to cover unexpected expenses. If you don’t already have one, now is a great time to start one with your inheritance. If you have children, you may also want to use part of your inheritance to start a college fund for them.
7. Give back
If you’re fortunate enough to have more than you need, consider using part of your inheritance to help others. There are many worthy causes out there that would be grateful for your support. Humanitarian travel can also be a great way to give back while seeing the world.
8. Splurge on something special
After taking care of the more practical matters, you may have some money left over to spend on something special. Just be sure to choose something that will bring you lasting joy, not just a fleeting feeling of happiness.
9. Invest in yourself
This is perhaps the most important use of your inheritance. By investing in yourself, you’re increasing your chances of living a happy and fulfilling life. This can be anything from taking care of your health to taking a trip that you’ve always wanted to go on.
In a Nutshell
No matter how you choose to spend your inheritance, the most important thing is to use it in a way that will benefit you in the long run. With careful planning and wise choices, your inheritance can be a springboard to a bright future.