Smart Ways To Spend Your Inheritance

Most Americans are soon to inherit some money, if they haven’t already. A poll shows 64 percent of retirees have money lying around — a total of $6 trillion — and they intend to leave it to their heirs.

money and savings (Photo credit: 401(K) 2013)
money and savings (Photo credit: 401(K) 2013)

That’s the good news The bad news is that some people will just squander the money.

One expert said most inheritances of $10,000 or less will be gone within a year, according to a story posted on

But even larger inheritances tend to go quickly. The poll found that nine percent said they would spend their money on a larger house. Three percent would blow it on jewelry or a car. And three percent would take a vacation.

But 72 percent said they would use their money to save, pay off debt or spend it on education.

The article says they are the smart ones.

Most financial planners say inheritances should be spent in one of three ways:

  • Set up a rainy day fund on which you can live for a year if necessary.
  • Pay down high interest debt such as credit cards.
  • Invest the rest. This can include stocks, bonds, funds or your child’s education.

If you have questions about inheritances, feel free to call us for a consultation at (626) 696-3145.

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