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Using gifts and inheritances to improve your financial wellbeing (without the guilt)

Receiving an inheritance or a significant gift from friends or family is often an emotionally complex experience. On one hand, there’s gratitude for the generosity or legacy passed down to you. On the other, there may be feelings of guilt about using the money, especially if it comes after the passing of a loved one or from someone’s hard-earned wealth.

Here’s the good news: it’s okay to use this financial windfall to improve your circumstances. Chances are, if the person who gave or left you the money cared about you, they wanted it to be used for your wellbeing. Their intent is often rooted in love, care or a desire to see you thrive. They may have worked hard to save and invest so that they could leave a meaningful legacy. By using the funds wisely, you’re not dishonoring their money or generosity. You’re fulfilling their hope that the money would help you lead a better, more secure life.

Balance enjoyment and responsibility.

It’s perfectly fine to set aside part of the money for enjoyment. Treating yourself – going on a family vacation, making a meaningful purchase or paying for a personal experience – can bring happiness and fulfillment. The key is balance. Splurge responsibly while using the bulk of the funds to strengthen your financial foundation.

Build financial security.

One of the best ways to honor a financial gift is to ensure it brings you lasting value. It’s about creating stability, freedom and growth that can benefit you and your loved ones for years to come. Here are a few strategic ways to use the money:

  • Eliminate high-interest debt: If you have credit card balances or other high-interest debts, paying them off can be one of smartest moves you make.
  • Create or bolster an emergency fund: Unexpected expenses happen, and having a robust emergency fund can protect you from financial stress.
  • Invest for long-term growth: Invest in a diversified portfolio, allowing the money to grow over time. Whether it’s building retirement savings, funding your child’s education, or preparing for future goals, investing wisely can multiply the impact of the gift.
  • Address major life goals: Consider how the funds can help you achieve meaningful milestones, such as buying a house, starting a business or transitioning to a career that aligns with your passions.

Pay it forward.

One way to alleviate feelings of guilt is to pay it forward. How can you use the inheritance or gift to help others? Giving back through charitable donations, supporting causes you care about, or helping family members in need can create a sense of purpose and gratitude.

Seek professional guidance.

If you’re unsure how to manage a gift or inheritance, reach out to your financial advisor. They can guide you on tax-efficient strategies, investment options and financial planning so that your gift continues to benefit you and your family.

An inheritance or financial gift isn’t something to feel guilty about. It’s an opportunity to build a strong, more secure life while honoring the intentions of the giver. Use this windfall as a steppingstone to create a better future for yourself. If we can be of any help along the way, don’t hesitate to reach out.

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