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My wife and I have gone through some tough financial times, which eventually led us to file for bankruptcy.  Following this experience, I don’t ever want to use credit again, but my wife

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How to advise someone close to you who is coming into a significant amount of money

Q. My parents are set to receive an inheritance of about $30,000. They plan to spend the money on a new car and to give my brother a loan for his business idea. The frustrating part for me is they still have credit card debt, very little in retirement accounts and no emergency fund. To make matters worse, my brother probably won’t repay my parents. My parents work hard, but they have never been good with managing their money. Since I’m the one they often turn to when they get in a pinch, I don’t know what to tell them about their plans. Any suggestions?

A. Most people have never taken a course on money management. Somehow we are all supposed to learn how to handle our personal finances and credit on our own. Unfortunately, most of us end up learning through the school of hard knocks.   

If your parents have come to you for advice before, they must trust that you have their best interests in mind. As their advisor, I’d say the goal is to help them consider their whole financial picture before they plan to spend all the money.

It might be a hard-sell, but I’d start by encouraging them to meet with a financial advisor who can help them consider their entire financial picture. A good financial advisor can help your parents see that this inheritance doesn’t have to be an all-or-nothing proposition; they can spend some—and save some, too. Taking a balanced approach can allow them the freedom to have some fun with the money and to pay down some debt, too. 

If they won’t see a financial advisor, perhaps you can show them how much money they’d free up each month if they paid off some of their debt. Or maybe you can encourage them to put money in an emergency account so that the next time something goes wrong, they won’t need to incur more debt. Discuss how having money in savings can relieve financial stress. 

Asking questions can be a good approach, too. Do they really need a new car, or can they just trade up to a more reliable car? If they loan your brother money, do they expect to be repaid?  If they do lend him money, what can they do so that he understands that he must repay them?  How can they enjoy their inheritance and still plan for the future?

A non-profit accredited credit counseling agency can also be a good option. They have counselors on staff that can help them budget their inheritance, a service which is typically offered at no charge. Sometimes turning to an independent, unbiased person is the best way to help your parents consider things they might not think about on their own. 

Receiving a windfall can be exhilarating, but it’s good to temper excitement with sound judgement. Get your parents talking about the different ways they can use this inheritance. Help them to see they have various options and how they can use the money to improve their life now and into the future.

Bonnie Spain is the executive director of the American Center for Credit Education and Consumer Credit Counseling Service of the Black Hills. For more information, email

The material in this transmission is provided for personal, non-commercial, educational, and informational purposes only. ACCE makes no representations or warranties with respect to the accuracy or completeness of the contents of this transmission and assumes no responsibility for errors, inaccuracies, omissions, or any inconsistency herein. You should consult a professional where appropriate.