An inheritance can feel like a gift and a responsibility at the same time. Whether it is $50,000 or $300,000, the worst move is usually the fastest one. The best first move is almost always the same: park it, breathe, then decide.

This is the practical order Kiwis who have been through it keep recommending.

Step 1: Do nothing clever for six months

Put the money in a term deposit or a high-interest savings account and leave it there. Lotto tells big winners the same thing for a reason. You need time to get used to the number so you do not make a grief decision, a family decision, or a “I deserve a car” decision in week one.

If the amount is large, splitting it across more than one bank can also keep more of it inside the deposit guarantee limit. Ask for a better term-deposit rate. With a six-figure deposit, banks will often move.

Spend a small, planned amount on something that marks the person you inherited from if you want to. Then stop. The rest is future-you money.

Step 2: Do not automatically pay an interest-free student loan

If you have a New Zealand student loan and you are staying in the country, the loan is interest-free. Paying it off with inheritance money can feel tidy, but it is often a worse use of cash than investing or buying a home later.

Pay it down faster if:

  • You are likely to go overseas for more than six months
  • The loan is stressing you enough that clearing it changes how you live
  • The remaining balance is small and finishing it gives you a clean slate

Otherwise, keep making the compulsory repayments and put the inheritance to work.

Step 3: Match the money to a time horizon

Ask one question: when will I need this?

  • Under 2 years: term deposits, a high-interest savings account, or a conservative cash fund. This is house-deposit or travel money.
  • 2 to 5 years: a mix. Some cash, some conservative or balanced funds. Do not put a near-term house deposit into Bitcoin.
  • 5+ years: a low-cost global index fund is the default for a reason. Broad, cheap, boring.

If you might buy a home in the next five years, a common split is 25–50% invested and the rest in cash-like accounts. If you know you will not buy, investing most of it is usually simpler than trying to time the market.

Step 4: Ignore the urge to buy a house just because you can

A house is a lifestyle purchase with a giant price tag. If you want to travel, you are not ready to settle, or you would be buying just to “do something responsible,” wait. You can buy a house later with the same money plus growth. You cannot unbuy a house cheaply if you change your mind in 18 months.

Step 5: Get the admin right

Inheritances can arrive as cash, a share of a house, KiwiSaver, or a mix. Before you invest anything:

  • Confirm the estate has actually finished and the money is yours to use
  • Keep records for IRD if there is rental property, foreign shares, or a trust involved
  • Talk to a lawyer or adviser if the amount is large, there are other beneficiaries, or you want to gift money to a parent to help with a house

Gifting a large sum to a parent or partner can have relationship-property and rest-home implications. Do not DIY a six-figure family transfer because it felt kind in the moment.

A simple inheritance checklist

  1. Park the money for 3–6 months.
  2. Write down the debts that actually cost interest.
  3. Write down the next big goal: home, travel, work break, retirement.
  4. Pick a split that matches that timeline.
  5. Automate the long-term portion so you stop fiddling.

FAQs

Do I pay tax on an inheritance in NZ?

New Zealand does not have a general inheritance tax. You can still have tax later on rental income, foreign investment funds, or gains inside certain structures. If the estate is complicated, get advice before you move the money around.

Should I pay a financial adviser?

If the amount is large and you feel out of your depth, a fee-only conversation can be cheaper than a rushed investment. You do not need a wealth manager for a straightforward index-fund plan.

Is it okay to enjoy some of it?

Yes. A planned celebration is different from slowly leaking $300,000 through Takeaways, flights, and “just this once.” Pick the number first.

When you are ready, BudgetBuddie can help you see the inheritance sitting next to your everyday budget so it does not get mixed into grocery money and disappear.

Final words

Thanks for reading. If you have any feedback or questions, get in touch using our contact form or email hello@budgetbuddie.co.nz.

Disclaimer

This blog or any other information provided by BudgetBuddie is not financial advice. If you need financial advice, please speak with a licensed financial adviser or professional.