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5 Things Not to Do If You 5 reasons 6 figures won't make you rich

Inherit Money 5 ways to maximize retirement savings in your

20s and …
Your month-to-month guide to savings
By AJ Smith
January 7, 2015 7:00 AM     5 ways to cure a holiday debt hangover

Getting an inheritance can be a financial opportunity but if you're What to read next
not careful, it can easily be wasted. It turns out, heirs often end
up spending all of the money and getting accustomed to a more
lavish lifestyle than they can keep up with. Figuring out what to do
with an inheritance without squandering it can be tricky, but it's im-
portant to have a plan. If you inherit money, avoid these common
mistakes and consider the suggested strategies for avoiding
them. Mobile price wars continue as AT&T lets
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1. Spend Without Assessing

It's important to first take an honest look at your current financial

situation. Acting without knowing where you stand can lead to big
trouble. Tackle any debt you have, starting with the highest-inter-
est loans.

Once the debt is gone, then you can focus on life improvements. 5 ways to maximize retirement savings in
your 20s and 30s
It's a good idea to create a budget that lays out your current ex-
penses, contributions to your emergency fund and retirement

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5 Things Not to Do If You Inherit Money - Yahoo Finance http://finance.yahoo.com/news/5-things-not-inherit-money-180006409.html

savings. Carefully consider every purchase you make so you do

not indulge away all your cash. No matter how much money you
have, it is always wise to keep track of what you are spending it
on. There's no point in getting out of debt just to get right back into
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it through reckless spending.
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access.

2. Ignoring Expert Advice

Go

Even if you are usually responsible and have a pretty firm grasp
Finance Home on your finances, you can likely benefit from the advice of a quali-
My Portfolio fied accountant, attorney and/or other financial experts once you
My Quotes News receive an inheritance. They can offer professional advice on
Market Data potential tax implications, where you should keep your money and
Yahoo Originals how to avoid foolish purchases or investments.
Business & Finance
Personal Finance 3. Being Unrealistic
CNBC
Contributors It's a good idea to avoid lifestyle inflation — the large influx of
cash may not last as long as you think. Before you make rash de-
Recommended Games cisions, adjust your expectations and figure out how every pur-
chase will affect your future. This way you will know what you can
really afford and how long your inheritance will last. Even if you
become an instant millionaire, there is no guarantee your funds
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will last long enough for a lifetime of lavish spending.
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4. Giving Up Other Income Sources

Unless you had exceedingly wealthy relatives, it probably isn't

smart to leave your job just because you received an inheritance.
At the very least, wait a little bit so you have time to figure out how
the money can best be used to improve your life (maybe you
want to use it as a down payment to buy a house or start a busi-

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5 Things Not to Do If You Inherit Money - Yahoo Finance http://finance.yahoo.com/news/5-things-not-inherit-money-180006409.html

ness). It's important to remember that taxes will likely cut into the
money you actually receive. Even if you decide leaving your job is
the right thing for you, it's a good idea to give it some thought first.

Watchlist  5. Paying for Friendship

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access.
Sharing with others is usually a nice gesture, but giving all your in-
Go heritance to your entourage can end up hurting you. It's a good
idea to establish boundaries with family and friends so they do
Finance Home not suddenly show up asking for their "fair" share. This is your
My Portfolio money and you should decide how you want to deal with it. Help
My Quotes News others if you want but do not be pressured into giving more than
Market Data you can afford.
Yahoo Originals
Business & Finance Getting a large lump sum of money can feel like winning the lot-
Personal Finance tery (especially if the money comes when a distant, unknown rel-
CNBC ative passes away), but acting impulsively or irresponsibly can
Contributors turn your luck into loss. Consider your outgoing cash flow care-
fully so you can reach a level of financial freedom you previously
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couldn't afford. Then, it's a good idea to take steps to make sure
the money lasts.

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