Using and Managing Inheritance Money

If driving an expensive sports car made your final list, rent one for a couple of months to see if driving a flashy car is the thrill you thought it would be. Rather than quit your job to work for a charity, spend time volunteering first. Before spending large amounts of money on your house, start with modest less-expensive home projects. Baby steps like these will help you avoid irreversible decisions you later regret.

Explore your new money boundaries. This is where you get to play the fun game of "If only I had the money, I would...." This exercise is more challenging than it might seem because most people, whether they're a chronic saver or habitual overspender, know the money range they live within. "We're pretty comfortable where we are. We know our limits," says Sacha Millstone, financial adviser with Raymond James & Associates, who has a special program solely devoted to clients who receive sizable inheritances. "An inheritance really changes that. It's not uncommon that they start spending way more than their inheritance can support. It's because they don't really know what their new boundaries are."

Besides fun spending and the usual financial planning, such as retirement, brainstorm some meaningful uses of money. That could include sharing the money with family, making donations to charities, or starting the business you always dreamed of. "It's a good time to look a little deeper," Bradley says. "Ask yourself what you want your life to look like."

Joni Lipson's passion for ballroom dancing is a good example of making use of the money for something you truly love. "It doesn't all have to be serious and purpose-driven," Bradley says. "There's nothing wrong with enjoying money and what it can do."