What to Do with an Inheritance

The book Money 911: Your Most Pressing Money Questions Answered, Your Money Emergencies Solved answers the questions of “What should I do with an inheritance?” by listing the following ways to allocate the money:

• Save in an emergency fund
• Pay off high-interest-rate debts
• Make one small splurge (5% or 10% max)
• Start on one big goal (saving for a house, etc.)

This seems like good advice to me. It’s a good blend of taking care of current obligations, helping yourself out for the long term, and having a bit of fun.

The author also advises not to do anything with the money for six months and to store it in a high-interest-rate savings account during that time. IMO, this is good advice too.

I don’t think I’ll be inheriting much money (if any) from anyone. We did get some money when my wife’s father died but by that time we had all of our debts paid and were doing pretty well on our own. I think we saved the entire amount.

How about you? Anyone out there ever inherit a good amount (or are you planning to)? What did you do with it? Or maybe you’re planning to leave a good portion to others. Have you talked to them about it?