If you know your parents or grandparents have left you a sum of money, or plan to, there is something worth asking yourself today. What do you need to do now to make sure you do not end up like the stories we have all heard, people who received a windfall and lost it all within a couple of years?
By now you have probably seen the headlines. Someone wins the lottery or receives a large inheritance, and within 18 months they are worse off than before. That story might not worry you because you do not see yourself as careless or foolish. Fair enough. But it still raises a real question. What should you be doing today to prepare, whether that inheritance is large or small, and whether it arrives next year or decades from now?
This article walks through the skills and mindset that help you become a wise steward now, so that when the Lord does entrust you with more, you are ready for it rather than becoming another statistic.
Do Not Build Your Life Around an Inheritance
The first piece of advice is simple. Do not build your identity or your plans around money you have not received yet.
That starts with refusing to become what we might call a waiter. Not the restaurant kind. The kind who is simply waiting for their parents to pass away so the money can finally arrive, and who sees no reason to pursue anything meaningful in the meantime because they assume they will not need a job once the inheritance comes.
Do not be a waiter. One of the most valuable things you can do right now is learn the value of work and discover your own purpose and calling. What has God uniquely equipped you to do? What gifts, skills, and resources has He given you, and how can you use them to bless others and serve His kingdom? The more people you serve well, the more you tend to grow, both in character and often in financial success.
The most successful heirs are usually the ones who do not actually need the inheritance. Not because they already have plenty of money, but because they have already learned to steward well whatever they have. They did not wait around for someone else’s wealth. They went out, built something, and provided value in the marketplace.
It is also worth remembering that no inheritance is guaranteed, no matter how wealthy your parents or grandparents might be. Wealth is fleeting. First Timothy 6 charges those who are rich, or those who hope to be rich one day, not to place their hope in the uncertainty of riches but to trust in God, who richly provides all things for our enjoyment. Notice that phrase, the uncertainty of riches. What is here today is not guaranteed tomorrow. If you build your life around an inheritance that never comes, you have built on sand. Be a person of value and service today, regardless of what tomorrow may or may not bring.
Build Real Financial Skills
The next step is developing practical financial skills, starting with the dreaded word: budget. Or if that word makes you cringe, call it a spending plan instead. Either way, you need to learn how to live within your means and direct your money on purpose rather than watching it come in one hand and go out the other.
Learn to save every time you earn money, not just whatever happens to be left over at the end of the month. There is a reason that approach rarely works. There is always more month left at the end of the money. If you earn 100 dollars, set aside 10 before you spend the rest, and make it automatic. Retirement accounts, high yield savings accounts, and short term savings all help enforce this discipline.
This connects to a principle known as Parkinson’s Law, the idea that spending expands to fill whatever resources are available. If you live on 100 dollars, you will spend all of it. If you live on 90 because you saved the other 10 first, you will find a way to make 90 work. Saving before spending is one of the most powerful habits you can build.
Saving and investing are related but different skills. Learn how your 401k works, and if your employer offers a match, contribute enough to capture every available matching dollar. Beyond that, consider a Roth IRA, keeping in mind the income limits and qualifications that apply. For most people, a Roth IRA is one of the best tools available for tax free growth over time.
Take time to understand the basics of investing too. What is a stock, a bond, or a mutual fund? How do IRAs and Roth IRAs actually work? Good books and resources can help here. Growing your financial literacy now pays off enormously later.
Manage Debt and Build a Foundation
Debt management is another essential skill. Avoid taking on debt where you can, work to pay off what you already carry, and commit to staying out of it going forward. Build an emergency reserve, and make sure you carry the right insurance, not just auto and homeowners coverage, but life and disability insurance as well. These protect the people who depend on you.
It also helps to know your net worth. That is simply everything you own minus everything you owe. Track it from year to year so you have a real sense of your progress, not just a guess.
Understanding taxes matters too, especially as they apply to investing. You do not need to become a tax expert, but a basic working knowledge helps you avoid surprises. A good accountant or financial advisor can walk you through the fundamentals.
Get Your Own Affairs in Order
It is easy to think about inheriting money from someone else someday while forgetting that none of us are guaranteed tomorrow. Get your own estate plan in order now. That means a will and powers of attorney at minimum. Consider a will that reflects your Christian faith, one that includes a testimony of what you believe and a challenge to your own heirs to steward wisely whatever you leave behind. This is good stewardship in both directions, receiving well and preparing to give well someday too.
Practice Faithfulness Now
If you find yourself frustrated that you are not further along financially, or wondering why you do not have more despite working hard, consider Luke 16:10. Whoever is faithful in little will be faithful in much. Good stewardship starts wherever you are right now, whether that is a little or a lot. As you prove faithful with what you currently manage, greater responsibility and opportunity tend to follow.
Rather than chasing more before you are ready for it, focus on managing well what is already in front of you. Develop a healthy relationship with work. Show up on time. Do what you say you will do, and finish what you start. Be the kind of person others can rely on. These character traits will serve you well for the rest of your life, especially when an inheritance eventually arrives.
Contentment matters here too. Paul writes that godliness with contentment is great gain. Are you cultivating contentment, or letting impatience steal your joy?
Write Your Plan Before You Need It
Once you have built these skills and habits, it is worth doing one more exercise. Imagine you inherited a million dollars tomorrow. Where would the first check go? What would you buy first? It is worth actually writing this out. What is your plan for debt, for giving, for investing?
A few practical notes as you think this through. If you inherit retirement accounts like IRAs, that money is fully taxable when withdrawn, so pulling out a large inherited IRA all at once in a single year could create a significant tax bill. The IRS generally requires inherited retirement funds to be distributed within ten years, so it is worth thinking through a withdrawal strategy rather than taking it all at once.
Think through the other pieces too. What would you do with an inherited home? What about education, whether for yourself, your children, or even future grandchildren? What lifestyle changes would you make, and do you have an emergency reserve in place already? What is your plan for future generations? The possibilities are wide open, but I would encourage you not to only ask what you want. Ask what God is calling you to do with it.
Remember Whose Money It Is
The most important thing to remember through all of this is that the money is not ultimately yours. It was never truly your parents’ or grandparents’ either. It belongs to God, and we are simply temporary caretakers of whatever wealth passes through our hands.
That does not mean the answer is to give everything away. Wealth serves real purposes, funding businesses, investing for the future, and providing for your family. First Timothy 5 reminds us that we are to provide for our own family, and especially those in our immediate household. So the real questions become, what is your plan, and what is God’s plan? How will you steward what the Lord entrusts to you, both for your generation and the next?
Build Your Own Team
Just as your parents or grandparents likely work with a financial advisor, an accountant, an attorney, and perhaps insurance or trust professionals, consider building that same kind of team for yourself. Do you have a will? Are you working with an estate planning attorney? Do you have a financial advisor helping you manage and grow what you have? Is an accountant helping you understand your taxes? Building these relationships now will leave you even better prepared whenever the Lord does bring an inheritance to fruition.
Trust God More Than Money
At the end of the day, this is not really about you. It is not about making your life easier or more comfortable, though God certainly cares about your joy. He also has a purpose for this wealth that reaches beyond you. Be generous with what you have, and remember that any wealth you receive, whether earned or inherited, ultimately came from the Lord. Some people think they hit a triple. In reality, they were born on third base. There is nothing wrong with that position, but remember who put you there.
Trust and love God more than you love the wealth itself. Thomas Brooks, a Puritan writer, once said that adversity has slain her thousands, but prosperity her ten thousands. Sometimes the reason we are not yet entrusted with more is that we are not yet ready, spiritually, to steward it well. There are plenty of examples of people who gained prosperity and lost their souls in the process. My hope for you is that this will never be your story.
So here is the closing challenge. Do not just wait for an inheritance. Be a steward now. Grow in faithfulness today, and trust that the Lord has promised to meet all your needs according to His riches in glory in Christ Jesus. As Paul told Timothy, those who are rich are charged not to be prideful and not to place their hope in the uncertainty of riches, but to trust in God. May that be your story too.
This is the third article in a series on preparing for the great wealth transfer. In our next article, we will dig deeper into the practical details of managing an inheritance once it arrives, including how to handle inherited retirement accounts.
Disclosures: The topics discussed in this podcast are for general information only, and are not intended to provide specific investment advice or recommendations. Investing and investment strategies involve risk, including the potential loss of principal. Past performance is not a guarantee of future results. All information here in is from sources believed reliable, but is not guaranteed for accuracy or completeness. The team assumes no liability for any errors, omissions or actions taken based on this material.
Information is as of the date stated and subject to change without notice. Securities and advisory services offered through Geneos Wealth Management, FINRA/SIPC
