If you’re a parent, you’ll know that your role never stops, even when you die. As a child, this means that your mom and dad will attempt to take care of your money problems, whether they are around or have passed away.
For many, the inheritance they receive is a welcome boost that provides breathing space. Without it, and with so many living on the breadline, it’s easy to fall into the traps set by debtors and creditors.
Of course, this doesn’t mean that you’re encouraged to count on a lump sum from your parents. If anything, you’re better off discounting it entirely, and here’s why.
People Live Longer
Part of the reason why it’s tempting to expect a windfall is that your parents will try their hardest to leave you money in their will. In the US, the average amount that people attempt to give away is $177,000, which is the sixth biggest amount in the world. Unfortunately, or fortunately, people are living longer than ever and require the resources to maintain their lifestyle.
Therefore, it’s not rare for the amount to reduce, something that you don’t begrudge your parents! With the average life expectancy creeping closer to eighty, it’s tougher for guardians to squirrel away considerable amounts of cash.
It May Be Split
Imagine that the inheritance you receive is in the tens of thousands rather than the hundreds of thousands of dollars. That’s still a hefty sum, right? It is for one person. When you split it between your siblings and other family members, it dwindles quite significantly. Plus, this assumes that you don’t need to hire a probate attorney to contest anything. Whatever figure you receive is a nice gesture and a bonus, but it probably won’t be enough to revolutionize your lifestyle.
You Aren’t Guaranteed To Use It Correctly
Just because you receive an inheritance from your family doesn’t mean that you will use it wisely. Many people don’t, even though they have bills to pay that aren’t going away. For example, only 33% of US homeowners have paid off their mortgage, while 80% of Americans are straddled with debt. Regardless, it’s incredible how many people are willing to prioritize a vacation over household bills, not to mention the money they spend while they are away. Even if your balances are healthy, it’s savvier to invest your inheritance in real estate or bonds as you may pass it on to your kids one day.
It Sets A Bad Precedent
If you’re hanging around waiting on money from your deceased parents, it’s safe to say that your financial habits are unhealthy. Aside from the impact this has on your life, it can affect your children’s lifestyles too. Kids are like sponges and learn bad habits from their moms and dads, meaning they may see an inheritance as a rite of passage rather than a bonus. Considering that you need a cash injection, this doesn’t stand them in good stead for the future.
How will you teach your children the value of money?
Be safe out there.
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