Question: I just inherited a large sum of money from my father who passed away. How can I best utilize this? I am getting a lot of advice from many sources and am confused.
Valerie RumboughAnswer: Although there are many things you could do with your money, the important thing to do is to pray about your choices and take enough time to make the right decision. There are a few things you may want to consider placing at the top of your list, however.
First, look at your current financial situation. Do you have debt of any kind, including a mortgage? You may want to pay these things off. This immediately gives you an investment return equal to the interest you are currently paying, without any risk. You may also want to consider establishing a college or retirement fund or making an additional contribution if they already exist. Is there a ministry that you are fond of, such as your church or other charity? If so, consider making a sizeable contribution. At the very least, you should consider tithing the gift you received. Although this is not “earned income,” it is a blessing from God that could have passed you by. Then, consider doing something special for you and your family that you may not have been able to do otherwise, such as taking a trip or purchasing a large item.
As you make these decisions, be sure to include your spouse and perhaps your children as well if they are still at home. Think ahead and ask yourself: Will you be happy or regretful for the decisions you made in, say, five years from now? Finally, as in all things, be sure to glorify our Father with your decisions. He gave this gift to you for a reason – he loves you and trusts you with the funds. Don’t let him down.
Editor’s note: Rumbough, CPA, CFP, is vice president of finance with the Baptist Foundation of South Carolina. For more information, call (800) 723-7242.
In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purposes.