Whether an inheritance received is expected or a complete surprise, the mere fact that you are to receive an inheritance is likely to bring a period of emotional stress at a time when you may be grieving the loss of a loved one.

On top of this you face the added pressure of having to decide what to do with the inheritance you have received.

The temptation is often to rush out and buy that expensive performance car or to blow a portion of the inheritance on an expensive vacation.

These are temptations that you should resist.

But what should you do?

This is what we at Firstline think.

If you know what your financial goals are then the inheritance you receive should be utilised in a manner that furthers your financial goals.

Establishing your goals is the first step. The second is making a Financial Plan.

While the financial plan of one individual will always differ from the next individual its true to say that what is in your financial plan is going to be governed by your financial situation.

Assessing your financial situation is not always an easy task and helping you to do so is where a great Investment Advisor like Firstline separates themselves from those that are ordinary.

Whether you use an Investment Advisor or not, some things to consider are:

• Do you have a sufficient emergency fund to buffer yourself from the impact of potential financial shocks such as the loss of your job or unforeseen medical expenses?
• Maintaining an emergency fund of three to six months of your normal monthly expenses in an accessible deposit account is always going to be a wise course of action.
• What investments do you currently hold and what investments should you make assuming that your inheritance is of sufficient value that after topping up your emergency fund you have surplus funds to invest?
• What levels of debt to you have and is the cost of servicing that debt rising with the current rise in interest rates making the cost of the debt expensive?
• Often a wise strategy is to retire expensive debt particularly if you cannot find suitable investments that pay a rate of return that exceeds the rate of interest you are paying on the debt.
• Persistent credit card debt should always be dealt with as it incurs a very high APR.
• Are there any tax implications arising from your inheritance?
• When building your financial plan and deciding what to do with your inheritance it’s vital to understand all the potential tax issues arising from the inheritance you receive and how you plan to utilise that inheritance.

If you are in this situation and would prefer some specific Firstline-styled guidance for you, click here. We would be happy to help you.