Receiving an inheritance is rarely just a financial event. More often, it comes during a time of loss, when emotions are already running high. And while it may feel like something you need to act on quickly, the reality is that your first action shouldn’t be a financial one at all. It should be to pause.
Emotional decision making
Research suggests that many people either spend an inheritance very quickly or avoid touching it altogether. Neither extreme tends to lead to the best long-term outcomes. The reason isn’t a lack of financial knowledge, it’s human nature.
When we lose someone close to us, our decision-making can change. Some people feel an urge to spend – on travel, lifestyle upgrades, or big purchases – as a way to cope or create distraction. Others go the opposite way, holding onto the money tightly because it feels emotionally significant, or even untouchable.
Both responses are understandable. But neither should drive long-term financial decisions.
Taking time to pause
A practical step you can take can be to create time and space before making any major moves. This might mean placing the funds in a separate account or term deposit for a period, for 6 to 12 months, while you continue with your normal routine.
This breathing room allows emotions to settle and gives you the clarity to think about what the inheritance actually means for your future.
Questions to consider
During this time, it can be helpful to start asking a few key questions:
- What role could this money play in my life?
- Are there any immediate financial pressures (such as debt) that should be addressed?
- What would the person who left me this money have hoped it would do for me?
- Am I feeling pressure to act quickly, or to do nothing at all?
There’s no single right answer, but these questions can help shift your thinking from reactive to intentional.
A once-in-a-lifetime event
It’s also worth remembering that an inheritance is often a once-in-a-lifetime financial event.
Unlike regular income, there’s usually no opportunity to replace it if it’s spent quickly or used inefficiently. That makes taking a measured approach even more important.
For some, this pause also becomes a chance to reflect more broadly. An inheritance can act as a natural checkpoint, a moment to review your financial position, your goals, and whether your current strategy still aligns with where you want to go.
Reach out to your financial adviser
Of course, you don’t need to navigate this alone.
Speaking with your financial adviser during this period is critical to help you understand your options within your existing financial plan, and to avoid feeling pressured to make immediate decisions. It’s not about locking in a strategy straight away but about gaining clarity, context, and confidence.