According to CNN Money only 56% of American families will leave behind an inheritance to their heirs, compared to 69% worldwide and a whopping 86% in India. However, those that do leave behind an inheritance leave an average of approximately $177,000. That means that 44% of Americans can’t count on any inheritance to help them along.
Unfortunately, TIME’s sobering reality points out that even if you do get a large inheritance, 70 percent of rich families lose their wealth by the time the second generation gets hold of it. So don’t take that inheritance for granted. Instead plan on using wise wealth management techniques to build your estate so you can leave something for your heirs even if you never received anything yourself.
1. Keep the Money in the Family
Websites like Etsy are a creative person’s most productive place to be. But instead of giving profits to outsiders, family members should support each other before making a shopping trip to buy someone else’s work. If you have an aunt in the family who can crochet a comforter, there’s no need to whip out a credit card at your local department store or boutique to buy the same thing. If a relative needs a loan and is responsible, consider keeping the interest in the family rather than giving it to the bank. Plus by cutting out the middle-man both the lender and the borrower can get a better rate than they would get from the bank.
2. Skip the Catering, Enjoy the Family Chefs
Holidays like Thanksgiving and Christmas come around, and family members gush over the most talented cooks. But there’s no reason why these same cooks can’t be taken advantage of for other big events such as birthday parties, bachelor parties and even baby showers. Why pay a catering service to order food when everybody’s favorite cousin is already qualified to make that same barbecue cuisine or mouth-salivating casserole.
3. Consider Using a Financial Planner
Banks and other financial institutions have financial planners who can help guide you through many of the major financial situations of life. They can help you avoid spending and savings obstacles, and point you to wise potential investments. It is always helpful to have a second set of eyes looking at your finances giving you advice of how to best allocate your resources in order to meet your long-term financial goals.
4. Maintain Children’s Allowances
Get young adults used to money management early in life. Business Insider reports the perks of kids getting a basic income. In other words, give them a basic allowance or pay them for doing chores around the house. Teach them the value of money and how to use it properly. This will help them secure their financial situation in the future.
5. Pay Bills on Time
One of the things you don’t want to do is kill your credit score. Therefore it’s important pay your credit card bills on time (try scheduling them online) and be sure they are paid off in full every month to avoid paying twice as much over time. Developing a habit of paying bills late and constantly negotiating late fees will only hurt your credit score.
6. Leave Credit Cards Home
The worst part about constantly having credit available is wandering eyes and fluttering hearts always plotting new “wants.” Have the will power to say when you are going to the store that you are only going to buy the things that you have budgeted for. If you see that item you have been wanting for a long time, make yourself earn it by saving up for it.
7. Profit from Vacant Real Estate
Whether it’s an empty office, a vacant bedroom or a whole home that’s taking entirely too long to sell, consider renting these places out instead of letting them sit idle. Sites like AirBnB allow you to cash in on everything from a tent (or camper) to a full mansion. You can always make money off of unused property somehow. Make sure you use it to your advantage.
Image courtesy of Mister GC @ freedigitalphotos.net