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A Reddit user recently sought advice on the platform: They had received an inheritance of $17,000 from their late grandfather and were unsure how to utilize the funds.
Various suggestions were proposed by Reddit users, including investing, making meaningful purchases like quality cookware, or pursuing educational opportunities such as career training programs. One user even advised treating the money as if it didn’t exist to have it available for emergencies.
To delve deeper into this topic, we consulted three certified financial planners who shared their insights and strategies:
Take your time to explore different possibilities
Samantha Mockford, a certified financial planner, advises against making hasty decisions regarding inheritance. She suggests keeping the money in a high-yield savings account while considering various options and seeking advice from others before making a choice.
“Don’t rush into anything,” Mockford emphasizes. “This windfall may be a once-in-a-lifetime opportunity, so proceed thoughtfully.”
Reflect on your loved one’s memory
Mockford suggests considering your emotional connection to the inheritance and your deceased grandparent. This relationship can guide your decision-making process, leading you to allocate the funds in a way that honors their legacy.
Strengthen your financial security
After thoughtful consideration, addressing outstanding debts, especially high-interest credit card debt, is advised by Brian I. Pultman, CFP. Achieving financial stability and prosperity aligns with the wishes of your late grandparent, notes Daniel Masuda Lehrman, CFP.
In addition to debt repayment, building up savings, including an emergency fund, is crucial for a secure financial future.
Invest in your future
Consider allocating the inheritance towards retirement savings like a 401(k) or Roth IRA for long-term benefits, as recommended by Pultman. Watching these funds grow over time can serve as a tribute to your grandparent’s legacy.
Choose a significant indulgence
While prioritizing debt repayment and savings, don’t overlook the opportunity to make a meaningful purchase or fulfill a long-awaited dream, suggests Lehrman. Your grandparents’ approval of such a choice can make it all the more special.
Lehrman shares his own family’s experience of using inheritance money for a memorable Alaskan cruise, emphasizing the lasting value of experiences over material possessions.
Reddit serves as a platform for open discussions on various topics, including finances. While we’ve drawn insights from Reddit threads on inheritances, it’s important to remember that individual experiences shared anonymously may not apply universally.
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