What To Do When You Suddenly Have Money: Inheritance, Bonuses & Windfalls Explained

What should you actually do when a lump sum of money lands in your lap and how do you make sure you don't waste the opportunity?

Molly sits down with financial advisor Lauren Isles to break down everything Australian women need to know about handling an inheritance, bonus, or financial windfall. No guilt, no jargon, no complicated finance-speak, just clear, practical advice for women who want to make the most of money they weren't necessarily expecting.

Whether you've been sitting on a lump sum and doing nothing with it, feeling overwhelmed about where to even start, or carrying some complicated emotions around an inheritance, this episode is for you.

In this episode, you'll learn:

• Why pressing pause before you do anything is the most important first step
• How to work through the guilt and emotional weight that often comes with an inheritance
• Whether you should pay down debt, invest, or boost your super and how to decide
• The super catch-up rules that could let you put a large amount into super at once
• What tax you actually pay on an inheritance in Australia (the answer might surprise you)
• The biggest mistakes people make when they receive a windfall and how to avoid them
• How to build an investment strategy around money you never planned for
• When to see a financial advisor versus a money mindset coach

Perfect for: Australian women who have recently received an inheritance, are expecting one, or have come into any kind of unexpected money and want to make it work as hard as possible for their future.

The biggest takeaway from this episode? A lump sum of money is one of the greatest opportunities you'll ever have to change your financial future but only if you actually do something with it. 🎧

Connect with Lauren Isles here.

CHAPTERS

00:00 — Welcome to Get Rich Podcast

   

LINKS FROM THE EPISODE

LFC Directory: https://directory.ladiesfinanceclub.com/
MoneySmart — free Aussie financial tools & calculators: https://moneysmart.gov.au/
ATO's super contribution caps: https://www.ato.gov.au/

CONNECT WITH LAUREN ISLES

Website: https://www.wattlepartners.com.au/
LinkedIn: linkedin.com/in/lauren-isles-90717953
Instagram: https://www.instagram.com/wattlepartners
Facebook: https://www.facebook.com/WattlePartners/
YouTube: https://www.youtube.com/@wattlepartners9867

CONNECT WITH LADIES FINANCE CLUB

Join our free Facebook group - Ladies Finance Club Money Chat
Website: https://www.ladiesfinanceclub.com/
Instagram: https://www.instagram.com/ladiesfinanceclub/
LinkedIn: https://www.linkedin.com/company/ladies-finance-club/

TAKEAWAYS

• Receiving a lump sum of money whether an inheritance, bonus or windfall, can trigger unexpected emotions including guilt, anxiety and overwhelm.
• Pressing pause before making any financial decisions is the single most important first step.
• Doing nothing with a lump sum is just as costly as making the wrong move.
• Guilt around inherited money is common, especially among women, but it shouldn't stop you from using it wisely.
• Paying down your home loan offset, boosting your super and building an investment strategy are three solid starting points.
• Australia has no inheritance death tax, meaning most people will receive inherited money tax free.
• The super catch-up rule allows you to top up contributions from the past five years if you haven't hit the threshold.
• Gifting money to family and friends feels generous but putting your own financial future first creates more long term impact.
• Working with a financial advisor helps you build a strategy around money you never planned for.
• A money mindset coach can help you work through the emotional side of a windfall before making any big financial decisions.

SOUND BITES

"Pressing the pause button can be really important."
"I've even had some women say, I wish I didn't have the money because it's stressing me out so much."
"It's certainly not the time to be making big, big financial decisions until you've sort of sat with it for a little bit."
"Put on your own oxygen mask first a little bit as well."
"Doing nothing, that can be just as bad."
"If you kind of give away lots of portions of wealth and then everyone treats it as a windfall and everyone's buying new cars, then it can really impact the..."
"We're really lucky in Australia that we don't have any specific inheritance death tax."
"A lump sum of money is one of the greatest opportunities you'll ever have to change your financial future but only if you actually do something with it."

TRANSCRIPT

[00:00:00] MOLLY: Welcome to Get Rich, the podcast that helps you do just that. Get rich and stay rich. Hey, I'm Molly Benjamin. I'm the founder of Ladies Finance Club, one of Australia's largest financial education platforms for women. But before I started helping thousands of women take control with their money, I was a hot financial mess when it came to my own finances and not the fun kind of hot, more like crying in a supermarket, wondering where all my money went kind of hot.

[00:00:29] But here's the thing, if I can go from financial mess to owning a share portfolio, investing in property, and building wealth. Then you can too. My mission is simple to make women rich because when we have financial freedom, we have choices, confidence, and control over our future. Every week on Get Rich, I sit down with some of the best experts in the industry to break down how we can all start investing, growing our money, and creating long-term financial security without the jargon, boring bits or overwhelm.

[00:01:02] Because when women get rich, we don't just change our lives, we change the world. So if you're ready to start making some smart money moves, hit that subscribe button and let's get Rich together.

[00:01:15] Hey guys, welcome to another episode of Get Rich. Now, what would you do if a lump sum of money landed in your lap tomorrow?

[00:01:23] Because here's the thing. An inheritance, a bonus, or any kind of windfall can completely change your financial future, but only if you know what to do with it. And I hear people when they get a windfall, they actually can spend all the money, or they do the complete opposite and they pretend it's not even there.

[00:01:42] They just ignore it. So in this episode, we're breaking it all down from the emotional side of money to the practical steps that. You actually can take to move the needle and not let this opportunity slip you by. And before we jump into today's podcast with Financial Advisor, Laura, what I would also love to just mention is our financial directory is complete.

[00:02:05] So if you're looking for a financial advisor, a mortgage broker, money coach, any expert in the finance world, we've put a list together of. All our absolute favorites with a little bit of information about them, a video. So you can head over to ladies finance club.com to get access to that directory.

[00:02:24] Alright, I hope you enjoy this episode,

[00:02:26] and as always, the links are always in the show notes.

[00:02:30] All right, so as I mentioned in the intro, we are talking when you are in that position of getting a lump sum, and sometimes this might be great, you've got a windfall. Other times it might be because maybe it is an inheritance.

[00:02:43] So it does come with, it's not like this happy thing to be celebrated 'cause there's been a loss involved as well. But I guess Lauren. When someone first receives a lump sum of money, what's the very first thing someone should do when they receive a lump sum of money before they start spending it, investing it, or even celebrating?

[00:03:03] Like what should they be thinking?

[00:03:05] LAUREN: I think it can be a bit of an emotional rollercoaster, so I think pressing the pause button can be really important. I think that the first step is really. And depending on, you know, whether it was expected or or unexpected can kind of play into it as well. But just pressing the pause button, taking a step back, reflecting on your own personal goals and values and.

[00:03:32] Coming up with a bit of a plan around what's actually important to you, which everyone I think kind of has that in their mind. But when you've got this new bit of capital to work with, it's worth just revisiting that, that mindset around what are my goals? What's important to me? Yeah. So once you can be clear on that, that's when you can kind of start thinking about, well, how do I actually use this money in the best way possible to help me?

[00:03:57] You know, whether it's upgrade my home, whether it's take the pressure off at work, whether it's. Make sure that, you know, my family's sort of set up for the future.

[00:04:07] MOLLY: Yeah, and I think that mindset piece is so big because I'll speak to women and they'll be like, I got an inheritance, but because I didn't earn that money, I feel a lot of guilt around having it and spending it.

[00:04:19] I've even had some women say, I wish I didn't have the money because it's stressing me out so much because they haven't dealt with the emotion. Of that money, and they might have been in a position where they're not used to having lots of money, and all of a sudden it makes them feel really unsafe or uncomfortable.

[00:04:36] LAUREN: Yeah. Yeah. I think particularly with an inheritance, it comes with, there's a whole lot of emotions, so I think first thing always is work on yourself. Certainly not the time to be making big, big financial decisions until you've sort of sat with it for a little bit. Obviously, um, you know, I'm always gonna be an advocate for go and get some advice.

[00:04:56] Go and chat to, you know, if you don't have someone in your world that that is helpful, like financially, they can give you that, that information and go out and speak to a few different advisors and try and. Find your own pathway forward, certainly shouldn't feel guilty or overwhelmed. And I know these are all feelings that, that we feel, especially if there's females, unfortunately.

[00:05:20] But I think it's really important to take it, look at it as an opportunity making, I think particularly in the terms of inheritance. We deal with a lot of, you know, older, wealthier clients. You know, they want their, their children to be able to, to, you know, set themselves up and live comfortably and, you know, live their best lives.

[00:05:37] So yes, try to put any guilt feelings aside and then just focus on, you know, what's the plan and how am I gonna use this to the best of my ability.

[00:05:46] MOLLY: And then that's why again, I'm such an advocate for working with advisors. 'cause that's where they'll really look at your goals. And as you mentioned, like what do we wanna do with this money?

[00:05:54] Do we wanna improve the house? Do we want to, you know, take, um, from holidays, we wanna take the family on a holiday. Do we want to retire early? What is it? What do we value? Where do we wanna see that money? Do I wanna help out our kids out in the future? And again, like. I've spoken to women who've had inheritances and they've just kept it there in cash.

[00:06:15] And I'm like, oh gosh. Ah yeah. So we got them speaking to a financial advisor pretty quick, fast, so that money could work hard for them. So I guess then, how do you help clients decide whether using a lump sum, they pay down the debt, they invest it, or do they maybe boost their super.

[00:06:35] LAUREN: So I think, yeah, once we have our goals, once we know what we wanna achieve, that's when we can kind of make those decisions around do we need to actually, you know, pay down a chunk of our debt?

[00:06:46] Do we want to, you know, set up a separate sort of investment strategy because we're still, you know, pretty far away from accessing super. So, you know, what does that look like? And, you know, once we kind of know what our cash flow is and our income goals are, we can kind of just work backwards and the strategy will really just take care of itself.

[00:07:05] Yeah, I suppose like the primary things that a lot of people that can't really go wrong would be like offsetting, at least offsetting your home loan if you've got one. You know, there's obviously tax benefits to putting money into super as well and just, you know, having some sort of investment strategy outside of that is.

[00:07:23] You know, always gonna be really valuable.

[00:07:25] MOLLY: Yeah, absolutely. And when it comes to super as well, I guess there is that, and we spoke about this when asking an advisor the other night with our LFC members, but you can do the catch up rule where you can go back and top up the past five years of super if you haven't topped that up to the threshold, and then you can bring it forward three years as well.

[00:07:44] LAUREN: Yeah. If you wanna put, yeah, there's, there's a lot of different ways where you can put large amounts of money into super, but again, it's just sort of, you know, does that make sense for what I'm trying to achieve right now? We can, yeah. An advisor can certainly help you, help you answer those questions.

[00:08:00] MOLLY: Now, what are the juicy or one of the biggest mistakes you see people make when they get that lump sum of money?

[00:08:07] LAUREN: Yeah, sort of as you said before, like doing nothing that can be just as bad. Inflation is through the roof. Cash rates aren't that high. Well, inflation's back under control now, but we know that it is a factor. So I think doing nothing is really sort of under. Underselling the opportunities. So just doing something it is, is really important.

[00:08:30] What else? So I think a lot of people, uh, not that this is a mistake, but a lot of people tend to wanna gift family and friends and, and that's great. Like, that's really good. That's a really good thing. But it's also put on your own oxygen mask first a little bit as well. So it is just about getting that, that balance, right?

[00:08:50] 'cause if you can get yourself into a really good situation, then you can keep sort of helping your family members out. On as a, you know, on an ongoing basis. But if you kind of give away lots of portions of wealth and then everyone treats it as a windfall and everyone's buying new cars, then it's, yeah, it can really impact the, um, yeah.

[00:09:07] Yeah.

[00:09:08] MOLLY: I had some friends and when they were in their twenties, they got some inheritances of, you know, thirties. $40,000 and unfortunately they just blew it completely. And I was like, oh my gosh. They could have set themselves up, they could have bought property, they could have invested in the share market.

[00:09:24] So I do think there's that obviously the benefit of getting advice, you know, enjoying some for the moment now, but also like uses, is such an opportunity to go, okay, I can really take, I'm in this very privileged position where I can take the financial strain off or set myself up. Yes, it's lovely to give people things, but as you said.

[00:09:44] We've gotta put our own oxygen mask on first. So what are some of the, I guess, tax considerations you should be aware of? Like do we get taxed on that windfall and if it is an inheritance? 'cause we are seeing a lot of women. Get inheritances at Ladies Finance Club. What are the inheritance tax rules?

[00:10:05] LAUREN: Yeah.

[00:10:06] So we are really lucky in Australia that we don't have any specific inheritance. Death tax. Yeah. So whether or not that changes in the future is something that we'll all, um, have to wait and find out. But there is tax inside superannuation. So without going into too much, you know, of the boring detail, there are a few fun taxable components and tax free components within superannuation.

[00:10:32] So if your, your parent or had quite a large taxable component in their super fund, when that is passed to someone that's not a, a tax dependent, so like an adult child usually doesn't fall under that category, then there is. Tax payable. So it's usually 15% plus Medicare in, in some cases on that component.

[00:10:55] So that can be like a substantial amount, but usually that's all depending on who's nominated as the beneficiary and and whatnot. It's usually managed sort of at that estate level. So it's depends really on if you are the executor of the will, that's when you probably, it's almost another conversation around what are the things we actually need to be thinking about and, and mindful of.

[00:11:15] But I think this conversation is more around. Once we have that lump sum of money, what do we do with it? So in terms of that, then it's just a question of if we're investing it, where are we investing it and where are we investing it in order to be tax effective? So, you know, for different situations it's different things, whether that's the family trust.

[00:11:36] Situation, whether that's putting it into superannuation or whether that's investing in your partner's name 'cause they're not working too much, or whether that's investing in your own name so you're not working too much. That's, you know, they're the sort of things that you wanna think about.

[00:11:50] MOLLY: Yeah, absolutely.

[00:11:51] And so if someone does get that, they, they get, let's say $30,000 as an inheritance, will they, they will have, will they need to take tax money tax out of that 30,000 or will that land. In their account ready to

[00:12:07] LAUREN: go typically? No. Yeah, typically it's, yeah, it'll be tax free by the time they, the time they get it.

[00:12:13] MOLLY: Okay. That's good to know. And I guess, how do you approach building like an investment strategy when the money wasn't planned for with clients?

[00:12:22] LAUREN: So I think just being quite upfront around, again, coming back to goals and, and what's important and it's actually really an awesome opportunity. I really like it when, when these sorts of things happen because it just gives you a whole new sort of.

[00:12:40] Set of options. Um, and I think that's really powerful. So it's a really valuable moment and it's something that you really wanna sort of nurture and yeah, ensure that you are, you know, using it to the best way possible. Because otherwise you just regret it. And like, yes, a new car is nice and if you need a new car, yes, maybe you should buy a new car, but if you, you know, if you don't, and we just, um, it's just that balance of goals.

[00:13:03] So really finding out what's important and, and being able to prioritize based on that.

[00:13:08] MOLLY: Yeah, absolutely. And I know there's money coaches as well and money mindset coaches, so I think if you are someone listening, you are receiving a large sum, you're feeling a bit weird about it. 'cause I do say people feel funny.

[00:13:22] That's where I would highly recommend you work with a money coach, like a Karen Ley or one of our other awesome female financial. Money coach ambassadors because they really help you understand your thoughts, feelings, emotions around money, some that you might not even be aware of, and then how to kind of handle that going forward as well.

[00:13:43] 'cause I think it is very underestimated the emotional. Even though most people would be like, I would love to have an extra 50,000 or extra a hundred thousand, but if that's come through having lost a loved one, or you know, you feel like this money isn't yours, you don't deserve it. That's where the real work begins.

[00:14:03] LAUREN: Yeah. I couldn't, couldn't agree. That emotional aspect is, is massive. So, yeah, I think speaking to, to, to someone and, and getting, you know, just chatting about it, even if the starting point is just chatting to your friends about how you're feeling better than sort of keeping it all bottled up and, and not talking about it.

[00:14:21] MOLLY: Absolutely. So there you go. You've got a little bit of a plan there. So definitely work on the mindset, but please seek independent advice as well. Do not just keep it in cash. Sitting there pretending it doesn't exist. Get that money working hard for you. Thank you so much, Lauren, for joining us today.

KEYWORDS

Inheritance, Windfall, Superannuation, Investing, Debt, Tax, Wealth, Savings, Advisor, Mindset, Bonus, Offset, Goals, Money, Financial