5 tips to make the most of your inheritance
Getting an inheritance can be complicated. The money often comes with the death of a loved one, which can make knowing what to do with inherited money an emotional undertaking as well as a financial one. Taking some simple steps to make the most of your inheritance can make the process easier. Here are five tips to help ensure you use your inherited money wisely.
Get your financial house in order
Make your money work for you
If you’ve already started contributing to an emergency savings fund, consider setting up or adding money to an IRA for your retirement or a 529 college savings plan. A Merrill Edge Financial Solutions Advisor™ can help you decide what’s best for you.
Minimize your mortgage
Americans spent more than 26 percent of their income on housing in 2015,1 so using your inheritance to help shrink your mortgage payment could be a good decision. Consider refinancing your home loan for a better rate or shorter term, which could save you money in the long run. You can use a portion of your inheritance for closing fees.
Set aside funds for short-term financial goals
If you’ve made smart decisions with your inheritance, you can feel good about using a portion of your money on short-term goals, such as a family vacation or a new car. However, you may want to limit the amount you spend on short-term, wish-list items.
Resist the urge to use all the funds
Think long term: Your inheritance could be an opportunity to start building wealth and to create long-term stability for you and your family. It could also be a big help in getting you closer to reaching long-term goals.
It may be useful to talk to an expert about how to handle your inheritance. A Bank of America banking specialist may be able to help.
- Bureau of Labor Statistics