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Playing smart with your windfall or inheritance

When faced with a large amount of money such as a windfall or inheritance, we find ourselves in the dilemma of what to do – spend or save? Imagine you came into $10,000, what would you do? We know, tough choice!

We recently ran a poll on Facebook asking the same thing and there was an interesting divide amongst our respondents. 33% of people elected to save their money with some specifically wanting to save towards a home deposit or retirement. On the other hand, 31% of people voted to splurge on themselves and family.

Debt was a priority for 11% who were looking to ease the stress a little by using the money towards paying off debt while 25% of people opted to do a bit of both by spending some and saving some.

Stuck on what you would do? Might be a good time to hatch a plan. Having a plan in place can be handy and helps you to make the most of your money.

What’s your plan?

A good thing to keep in mind is that you don’t need to rush and make any immediate actions when you receive your windfall. Go ahead and take some time out to think about how everything in your life is going and the goals that you have in mind. From there, you might find an initial plan begins to form and it’s a great time to start shaping a plan to put in place.

Here’s a few things to think about when planning:

  • Debts – not a fun way to spend money but it might just make your life that little bit easier if you can knock off a bit more debt now that you have the chance. Paying off your debt quicker allows you more freedom to do what you want with your money.
  • Investing – we know, sounds a bit like something a wise grandpa would tell you but have a think about how you want to take care of your money. Whether it’s through KiwiSaver or in property, investing your money can help you reach some of your financial goals.
  • Making it last - have a look at what your calendar looks like for the year and whether there are any events in your life that might have you dipping into your pockets. If so, make sure your plan takes this into consideration.
  • Reward yourself – it doesn’t all have to be dull, once you’ve thought of all the mundane necessities – if you can, dedicate a small amount of your money towards a treat for yourself. Think of it as a reward for doing so well with taking care of your money.

Like any event in life, it’s always good to have a friend onboard helping you out, also your financial Adviser can help you by offering all they know. We encourage you to absorb of all that information as it can help you make great decisions on how to use your money to your advantage.

Taking care of you

Investing your savings

Taking care of your money, is you making the decision to take care of you and what a fantastic choice!
When it comes to choosing how you wish to take care of yourself and your savings, you have quite a few options such as:

  • KiwiSaver
  • term deposits
  • shares and bonds
  • property

Understand the basics of investing

A plan for what you have

After getting a windfall or inheritance, it’s also a good time to look at everything you currently have and consider how things will be taken care of if you were to pass away. Have a think about things like:

  • Do you have a will? If not, would it be good to have one?
  • Who would be your beneficiaries?
  • Do you have an executor for distributing your assets?
  • Have you thought about granting enduring power of attorney to someone else?
  • Do you have instructions to your guardians and lawyers for your care?

To get started or develop your planning further, have a chat with your lawyer.

Putting away a bit for retirement

For some of you, while retirement might be a long thought away, it’s never too early to take steps to make your retirement more comfortable.

If saving for retirement is your priority, then consider paying a large deposit into your retirement savings scheme. If you don’t currently have a way of saving for retirement, you may want to consider a savings scheme like KiwiSaver.

KiwiSaver is New Zealand’s most popular work based retirement savings initiative. Whether you’re just starting out or have been working for a while, it’s never too early to join and start saving for your retirement.

Find out about the benefits of joining our AMP KiwiSaver Scheme

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Important Information

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The content on this website is for information only. The information is of a general nature and does not constitute financial advice or other professional advice. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. While care has been taken to supply information on this website that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.

A disclosure statement is available from your Adviser, on request and free of charge.