So, you've suddenly received a sum of money — maybe an inheritance, a bonus or a lump sum from another source. What's next?
First, there's no need to rush into any decisions on how to use the money.
If your funds weren’t intended for a specific purpose, think about your financial strategy; it will probably give you an idea for how to put that money to work. Regardless of how much money you received or where it came from, this influx of money can help you achieve your goals and give your more flexibility in making financial choices in the years ahead.
Consider these ideas when thinking of what to do with your new sum of money:
Build an emergency fund. You could use part of your money to help build an emergency fund of three to six months’ worth of living expenses.
Invest toward your retirement. You could use part of your inheritance or lump sum to fully fund your IRA for the year. You could also set aside some of the money for your daily expenses, freeing up more of your salary for your 401(k).
Pay down debt. If you have student loans or other debt outstanding, consider using your funds to pay it down.
Get some advice…
When making these decisions, you may want to enlist some help. For example, an inheritance of an IRA could come with tax consequences, so you might need to consult with a tax professional. And a financial advisor can help you protect your newfound funds and integrate them into your financial strategy.
Receiving a financial boon may truly be a “once in a lifetime” opportunity – so make the most of it.