5 Things to Do With an Unexpected Inheritance

Unexpected money from a friend or relative can be a great surprise or a potentially difficult money lesson. How you plan for unexpected money issues overall can be a key to how well you’ll handle a sudden windfall.

Many people don’t do so well. A recent study from Ohio State University suggests that adults who inherit money are saving only about half of what they receive. Researcher Jay Zagorsky reported that about only 11 percent of the participants had received an inheritance with the median amount only around $11,340. Zagorsky suggests awareness of such high spending numbers suggest it is time for a campaign on saving inherited wealth.

Want to get there early? Here’s a plan for dealing with an unexpected inheritance or any other surprise money issues in the future:

1. Start by getting control of your current finances. Why wait for an inheritance? In 2013, the Gallup organization reported that only 1 in 3 Americans actually prepared a written or computerized household budget. If you’ve never prepared a budget before, know that it is the traditional starting point for all personal finance decisions.

2. Start saving now. The long-term purpose of budgeting is to find excess dollars so you can save and plan for the future. Even if it’s a few dollars a week as other resources go toward everyday expenses, get in the habit of regular savings and investment now. Consider activating direct deposit to build those amounts automatically. If an inheritance happens, you will already have savings habits in place and account relationships set up to receive the money.

3. Line up qualified advice. Skilled financial or tax experts can help you review what you’ve done so far with your money and suggest ways to make your personal savings or investments go farther. Having this relationship in place before an expected – or unexpected – windfall is valuable. They’ll know your situation and the best ways to handle new money. If an inheritance happens, consider a certified financial planner, certified public accountant and an attorney involved in trust or estate matters for your financial team.

4. Evaluate your relationships. Money can change people for better or worse. This is why you see so many troubling news stories about people who have an unexpected windfall. The best approach to sudden money is to go quietly and immediately into the planning phase – don’t make announcements and involve only key loved ones who need to be part of the process.

5. Don’t go on a spending spree. If you’re lucky enough to receive an inheritance of significant size, planning doesn’t mean quitting your job, buying a car or moving out of your current place, at least not immediately. Involve members of your financial team in your planning. After any tax or estate issues are settled and money is free for use, extinguish long-standing expenses, build an emergency fund and then establish savings and investments that are appropriate for you and your loved ones. Once details are complete, do have some fun, but try to keep the cost below 10 percent of the total inheritance amount.

Bottom line: Inherited money can help build a financial future. Get some advice, plan thoughtfully for taxes and investments and save a little bit for fun or luxury. Without proper planning, windfalls don’t always last as long as you think.

Make Sure Your Freshman Gets A Money-Smart College Start

Does your college-bound freshman know how to handle money at school?

Campus life can test even the most disciplined young adults on money matters. In the final weeks before you help your student pack up for the dorm, it’s a good time to pack in some money lessons as well.

Start with what college will cost. On average, the Class of 2015 graduated with a little over $35,000 in student loan debt, according to Edvisors. Depending on your financial situation and how you’ve planned for your child’s college education, start with an overview of how your student’s college costs will impact your finances now and after graduation.

If your child will be paying off personal or student loans once they graduate, discuss how that reality should define financial choices throughout college. That doesn’t mean saving every penny and having no fun at all, but such a talk should reinforce how handling money intelligently, setting priorities and getting a jump on savings can position your child for a much stronger financial start upon graduation.

Train them to budget. If your child hasn’t learned budgeting skills, it’s time for a crash course. Budgeting is the first essential skill in personal finance. Teaching children to budget now gives them a head start on dealing with post-graduation debt or long-term goals like affording a home or car. Because teens often live their lives on smartphones, familiarize yourself with the growing range of budgeting apps to keep their money management on course.

Talk through on-campus banking and credit needs. Many parents start their kids with custodial savings and checking accounts at their local bank when they are younger. If your bank has branches in the teen’s college town, that relationship can easily continue. Responsible credit card use is also wise to start in college. Keep in mind that The Credit Card Accountability, Responsibility and Disclosure (or Credit CARD) Act of 2009 requires that anyone under 21 without independent income have a co-signer to qualify for a card. As such, you’ll be able to keep track of your child’s credit use. However, if they default, you’ll be on the hook – so monitor your child’s bank and credit relationships closely until you agree they’re ready to manage them on their own.

Cover credit monitoring and identity theft. With smarter online thieves emerging every day, your child is at risk of identity theft from the minute he or she is assigned a Social Security number. While most teens generally don’t have a credit report until they start earning a paycheck at age 16, be on the lookout for fraudulent activity earlier and make sure they get in the habit of ordering the three free credit reports they are entitled to each year. Throughout college, consider sitting down with children so you can review their annual credit reports together.

Bottom line: There’s plenty to do in the final weeks before your kids leave for college. Don’t forget to reinforce important money lessons before they go.

Last Minute Vacation Ideas for Any Budget

The season may be drawing to a close, but that doesn’t mean you lost your chance for some RnR!!

Here’s the thing about summer: the warm weather gives you plenty of options for travel. And lest you think all the fun destinations are already booked, check out these affordable last-minute ideas:

National Parks

National parks offer a rare opportunity: you can have a life-changing experience even on a tight budget. Whether you’re introducing your children to the historical scenery, or seeking some much-needed peace and relaxation, national parks are a perfect end-of-summer option.

The more popular destinations charge a higher entrance fee, but some parks—like The Great Smoky Mountains—are free to enjoy.


Speaking of the outdoors, camping lets you explore nature without breaking your budget.

If you don’t have any gear but want to try it before committing, most outdoors retailers will let you rent what you need.

However, if you plan on camping more than once, it’s typically worth it to buy your tent and supplies up front. The small investment definitely pays off over time.

Whether you’re staying in a national park or hitting up a local site, camping offers a chance to bond with your family and friends while enjoying the tranquility of the outdoors.


If you’re trying to save money but also need to scratch your vacation itch, take some time off in your own home.

With a staycation, you can plan affordable day trips or do fun activities on your property. Want to catch up on some peaceful gardening? Have a queue of movies to watch? Avoid the stress and costs of travel, and relax at home instead.


August 2017

Those “Other” Costs of Home Ownership: How to Budget for the Big Picture

The price tag for a new home includes some obvious expenses: list price, monthly mortgage, and closing costs.

But for those of you who are new to the home ownership game, there are other, less apparent costs that require planning. Check it out:


Even if you pay renters’ insurance on your apartment, buying a home takes your costs to the next level.

As an owner, you’re responsible for the property, which means your coverage now includes electrical, plumbing, heating—anything that’s prone to problems, and could potentially affect the value of the home.


You want your house to look good (you own it after all). So appearances—particularly landscaping and the lawn—will become a priority.

Planting new bushes and trees can get pricey fast. And even if you forgo hiring someone to take care of your lawn for you, you’ll still need to invest in a lawn mower, sprinklers, fencing and of course, your time.

Property Taxes

When making your monthly budget, make sure you plan for property taxes. Simply take the yearly total, divide by 12, and add the amount to your monthly mortgage. Unfortunately, property taxes only tend to go up, so prepare for an increase in the years to come.


If you’re new to central air and heat, welcome to a more comfortable living experience. However, you may also get hit with big monthly bill if you use it.

Furnaces are expensive to run and determining their longevity can be tricky, no matter what your inspector tells you. So be prepared to absorb some new expenses and, at some point, to replace your heating / cooling system.

Buying a home is an exciting milestone and can be a great investment. As long as you’re ready for the additional costs, your finances will be just fine.

August 2017

How to handle a money emergency when you don’t have savings

First things first: take a breath.

If you recently received a big bill that threatens to eat up all your available cash, you know how fast stress and fear sets in. But don’t let these feelings paralyze you. As dark as it may seem, you still have options.

So breathe deep, and get ready to meet your problem head on. Here are five helpful tactics to consider when tackling your money emergency.

1. Find immediate ways to save

You need to free up some cash—fast. If you don’t already have a budget, access your checking account statement and review your expenses. Are you spending money on things that you don’t really need? Do you eat out a lot? Have an expensive cable bill?

Tighten your budget ASAP. If it’s a true emergency, you may need to make some tough decisions, but having the extra cash will be worth it.

2. Ask a relative

Before you max out your credit cards, do you have a relative you can ask for help? Obviously, you need to pay them back in a timely manner, but the so-called Bank of Family typically has more flexible terms than most financial institutions.

But remember this—some people draw a line at mixing family or friends with finances. So make sure you have a secure relationship with the person, and be honest about your ability to repay when you ask to borrow money.

3. Use credit carefully

If putting your emergency debt on a credit card or getting a personal loan is your only option, be careful. You may get immediate relief, but high interest rates can dramatically increase the size of your debt.

Pro tip: if you’re applying for a new card, try to find one with a zero-percent APR intro rate, and pay off the debt before the offer expires.

4. Be wary of payday loans

Payday loans can be a quick way to access money if you have bad credit. However, like other lines of credit, they can be expensive—really expensive.

These types of loans are notorious for gouging consumers with sky-high rates. In other words, you’ll end up paying much more than your current balance in the long run. And if you miss a payment, the fees aren’t pretty.

5. Seek counseling

Remember, you’re not alone. No matter how helpless you might feel in a money emergency, there’s always help. Certified Financial Counselors can assist you in making a plan and can identify the most productive ways to save, and review the best options for paying off your debt.

August 2017

Student loans, retirement or your first home: Where should your money go?

Recent college grad? Getting proactive about your finances?

No matter your situation, saving money for long-term goals (aka, “adult stuff”) is tricky on a limited budget. So-called experts tell you to put X dollars away for retirement by Y age, but the reality is this: everyone’s finances are different.

So rather than offering a one-size-fits-all solution, here are a few suggestions to help ensure that your personal financial future stays secure.

Review future plans

What are your priorities? Do you aim to settle down in one place for a long period of time, or would you rather travel and work remotely? Answering these questions can help you determine if buying a home is even something you need to put on your financial radar.

Just remember, saving up for a big purchase like a home may take a long time. You can always decide you want to buy later, but it could delay your goal by several years.

Compare interest rates

The bad news is your student loans probably aren’t going away by themselves. But the good news is that the interest on federal loans is typically pretty low.

If your student-debt interest is five percent or less, you may consider paying smaller amounts every month and re-directing the extra money to saving for a home, or another long-term goal.

Open a retirement account—no matter what

No matter how long you intend to work or how much you care about money, at some point you’ll want to retire—and you’ll need to support yourself.

The thing about retirement accounts is they pay off over time. That means the earlier you invest, the more you’ll get later. If you’re a late starter, you can always catch up, but if you’re young, open an account now and begin making deposits as early as possible.

Even if you’re new to the workforce and can only put away a small amount every month, your future self will thank you.

August 2017