Making a Financial Plan
The first thing you do when you come into a large sum of money and are not sure what to do it with it is to reassess your financial situation and start planning for the future. Identify high interest debt like credit cards, or short term loans, and pay these first. This can reduce your monthly expenditure and help you save more money month to month. Once this is done, you can start allocating money to different things and plan where to invest your money.
Assess long-term and short-term financial goals, if you have an emergency fund, then allocating some money to this would be good for a rainy day. It’s important to be aware of your future cash flows, Cash Flow Planning can help assess your ‘personal liquidity’ and can account for periods of low income which savings will help with.
If you have been planning on making an important purchase, such as a new bathroom or car, then this is the time to address what is urgent and prioritise your purchases, this can reduce unexpected costs later on down the line. Completing these steps should allow you to maximise the impact of your inheritance and improve your financial resilience.
Find out more about financial resilience >