Once each month, 929 Millennials like you receive my free personal finance tips & links

Inheritance Advice for Millennial Women

How to Spend an Inheritance

Inheritance

August 29, 2025

A recent book offers Millennials insight on how to spend an inheritance without feeling guilty or irresponsible

Comedian Al Madrigal once told a story about his son wanting a bigger house.

Madrigal explained, “My son came up to me the other day and really upset me. He said, “Dad, when are we going to get our big house?”

… I said, “Look man, I bought this house with my own money.” And I told him the truth: I said, “These people with the big houses, they got their money through inheritance.”

And he’s like, “What’s inheritance?” And I go, “Well that’s when grandma or grandpa passes away and they give you a lot of money and you get to go buy the big house.”

So not only did I explain inheritance, but what I really did was put us on Nona and Papa death watch.

Now my mom comes over and so much as coughs, and he’s like, “[Oh] yeah, here comes the big house!”

Table of Contents: How to Spend an Inheritance hide

1 The Three Most Common Worries About How to Spend an Inheritance

2 How to Spend an Inheritance: Objection #1 (I’m Risk Averse!)

3 How to Spend an Inheritance: Objection #2 (But I Love My Job!)

4 How to Spend an Inheritance: Objection #3 (It’s Too Early for Them / Too Late for You)

5 What Data Shows About Spending an Inheritance in the U.S.

6 Six Frameworks for Deciding How to Spend an Inheritance

7 Your Loved Ones Want You to Feel Comfortable Spending Your Inheritance

8 What Questions Do You Have About How to Spend an Inheritance?

The Three Most Common Worries About How to Spend an Inheritance

In 2020, Bill Perkins wrote the book, Die with Zero. He argues that you should feel empowered to use your savings more often. And you should do so earlier in life than you may think:

“Rather than just focusing on saving up for a big pot full of money that you will most likely not be able to spend in your lifetime,” he writes, “live your life to the fullest now.”

But many people struggle to embrace this inheritance advice, for three primary reasons. They:

Assume their kids will miss out
Misunderstand the risks
Prefer work over other activities

How to Spend an Inheritance: Objection #1 (I’m Risk Averse!)

Die With Zero acknowledges that risk tolerance varies. Early money experiences shape when you use savings. It’s natural to want to play it safe.

Perkins wants to expand your perspective on risk, though. He emphasizes three ideas:

First, “Whatever level of risk you’re comfortable with, whatever bold moves you might contemplate for your life, you’re generally better off making those moves earlier in your life. That’s when you have a higher upside and a lower downside.”

Second, “Don’t underestimate the risk of inaction. Staying the course instead of making bold moves feels safe, but consider what you stand to lose.” With too much caution, you may miss out on one-time moments with friends and family.

And third, “There’s a difference between low risk tolerance and plain old fear. Fear tends to take the actual risk and then blow it out of proportion…. When you consider all the safety net you’ve got in your life – from unemployment insurance provided by your job to private insurance you can buy against any kind of disaster, to good-old-fashioned help from your family – the worst-case scenario is probably not as bad as you think.”

Millennials often seek inheritance advice around saving and investing. Spending, meanwhile, comes up much less often. We’re understandably hesitant to use the inheritance money we’ve received.

But understanding how we feel about risk can help to overcome this barrier.

How to Spend an Inheritance: Objection #2 (But I Love My Job!)

An inheritance creates new opportunities for your life. The money may not be so large that you can retire tomorrow. But you still may be able to make significant changes.

In practice, though, that’s easier said than done. Let’s take work as an example.

You’re fortunate if work plays a prominent, positive role in your life. And in this case, you may not want to change jobs once you’ve inherited money.

Die With Zero doesn’t argue that you should quit. But Perkins does believe that you should “ramp up your spending accordingly.” After all, you no longer might need to generate the same income. Your focus, instead, should turn toward adding to your life experiences as you continue to work.

Here’s what the books says that might look like in practice for someone who loves their work:

“Even if you enjoy every minute of the work that brings you money, failing to spend that money is still a waste.

Let’s say you’re a professional dancer. If dance is your life, and you happen to also earn money from dancing, go ahead and spend it on dance-related experiences. Splurge on private lessons with the best dance teachers if that’s what you value. Or hire someone to clean your place so you have more time to pursue dance.

Just don’t let that money sit and go to waste. How you feel about the source of your money doesn’t change the calculus on maximizing your life.”

Good inheritance advice will focus on how you feel about the source of your new savings. Spending money is challenging for many diligent savers.

It’s even tougher for Millennials who have received that money from a loved one.

How to Spend an Inheritance: Objection #3 (It’s Too Early for Them / Too Late for You)

One reason why Millennials may struggle to spend an inheritance won’t become clear for 10-20 years.

That reason is timing. At what age do you think most people in the U.S. receive an inheritance?

The Federal Reserve Board found that, “For any income group you look at, the age of ‘inheritance receipt’ peaks at around 60. Overall, the data falls into more or less a normal (bell-shaped) distribution. So for every 100 people who inherit at around age 40, there are 100 people who inherit around age 80!”

As much as you may appreciate extra financial security later in life, many people don’t need an inheritance when it arrives.

Die With Zero argues, “The truth is that [the] people and causes [you care about] would be better off getting your wealth sooner rather than later.” Perkins explains:

“Putting your kids first means you give to them much earlier. And you make a deliberate plan to make sure that what you have for your children reaches them when it will make the most impact.

…If you don’t know when you’ll die, and you care so much about your kids, why do you want to wait until that random date for your offspring to get what you want them to have?

.…This is the problem with inheritances: you’re leaving too much to chance. Regardless of the amount you’re passing on, it takes a great deal of luck for it to arrive exactly when each of your recipients needs the money most. Much more likely, the money will arrive too late for it to have maximum impact on the recipient’s quality of life.”

Millennials may have little say over when they receive an inheritance from a loved one. But we hopefully will have the chance to make different choices.

What Data Shows About Spending an Inheritance in the U.S.

If the value of a financial gift declines with age, most people receive money at suboptimal times.

As Perkins writes, as adults age, “Every dollar you give [your adult children] goes less far, and at some point that money becomes almost useless to them.”

So what ages are ideal? Die With Zero suggests that “the 26-to-35 age range combines the best of all considerations: old enough to be trusted with money, yet young enough to enjoy its benefits.” Plus, parents are more likely to be healthy then, and able to share in the gift.

Six Frameworks for Deciding How to Spend an Inheritance

If you want to rethink how to spend an inheritance, you’ll need specific tactics for the big decisions. Die With Zero offers six frameworks that may fit your life:

Spending Framework #1: Consumption Smoothing

What if you spent less during years when you earned less? This question applies to both your employment income and investment earnings, which can include an inheritance.

Consumption smoothing argues against spending the same percentage every year.

Die With Zero notes, “Our incomes might vary from one month or one year to another, but that doesn’t mean our spending should reflect those variations. We would be better off if we evened out those variations. To do that, we need to basically transfer money from years of abundance into the leaner years.”

But many of us “take money away from our starving younger selves to give to our future wealthier selves. …You may not be able to predict the magnitude of your future earnings, but you can be confident of the direction in your future earnings.”

Spending Framework #2: Personal Interest Rate

What’s your personal interest rate? And how does this “rate” tie into how to spend an inheritance?

Perkins argues that “The older you are, the more someone should have to pay you to delay an experience. This amount, called your personal interest rate, rises with your age.

When you’re 20, you can afford to wait. You can postpone an experience for a year or two. The experience won’t look or feel much different to you then. So someone wouldn’t have to pay you much for you to willingly delay the experience.

Now imagine you’re 50. At this older age, delaying an experience becomes much more costly. You can’t afford to wait much longer. Your health or mobility might look different in 10 years. Your personal interest, then, becomes much higher.

At some points in life, you should spend your inheritance. You should have that experience. Or you should upgrade your lifestyle.

Spending Framework #3: Would You Rather

Walter Mischel’s famous marshmallow test asked: one now or two later?

You can actually ask the same about spending. Would you rather have one experience now or two such experiences some years from now?

Die With Zero advises:

“You can spend the money now or you can save it for later. If you save it for later, there’s potential for the money to grow. And the longer you let the investment grow, the more money you end up with.”

After you receive an inheritance, should you wait 10 years to get two experiences? Or is one today enough for you?

The answer depends on your personality and what you value. The answer also depends on the experience. You can’t replicate some moments, such as a wedding. And with other experiences, you may enjoy them more later if extra money enables you to upgrade the experience.

Bill Perkins believes that most people will choose to delay when they’re younger. But when they’re older, they start actively trying to avoid delays.

Spending Framework #4: Time Buckets

When you receive an inheritance, try mentally dividing both your time and money among different buckets.

Perkins explains:

“Time buckets are a simple tool for discovering what you want your life to look like in broad strokes.

“…Using this approach will make you begin to realize that some experiences are better done at certain ages. Mountain climbing and attending loud concerts, for example, are much more fun when you’re younger.”

“Not surprisingly, the most physically demanding activities tend to fall on the younger side of the timeline.”

You probably shouldn’t spend your inheritance all at once. But you also should feel free to spend some money.

Time buckets are a proactive approach to these decisions. And they make the decisions personal to you. Your “buckets” may change over time, and that’s fine.

At least you’re giving yourself the permission to spend.

Spending Framework #5: Know Your Peak (Date)

Let’s say you read an article suggesting that you need $1 million to retire. And then you receive an inheritance that puts you close to that number.

You may assume that you would retire as soon as you reach that milestone. For many people, though, that won’t actually happen. Even at that exciting moment in your life, you still would find reasons why you don’t have enough.

Die With Zero says:

“Many of us have been trained to think that our plan for drawing down our savings should be framed in terms of numbers. Once we reach a certain amount in savings, we can then retire and start living off those savings.

Think of your net worth peak as a date instead. It’s tied to your biological age, which is just a measure of your overall health. For most people, the optimal net worth peak occurs at some point between the (chronological) ages of 45 and 60.”

Under this framework, how you spend your inheritance may depend more on your age than the size of your investment portfolio.

Spending Framework #6: Insurance as a Hedge

You may not need more insurance in your financial life. But Die With Zero mentions insurance in the context of people who fear spending money.

The book argues that extra insurance can help to address this fear.

Perkins writes:

“For every single thing you might be worried about in your future, there is an insurance product to protect you. The fact that insurance companies are willing to sell insurance for various risks shows that these risks can be quantified – and removed for those who don’t want to take those risks.”

For example, many Millennials worry about health care expenses later in life. Understandably so!

But Perkins argues that, at some point, your savings efforts may not make a difference:

“No amount of savings available to most people will cover the costliest healthcare you might possibly need. For example, cancer treatments can easily cost half a million dollars a year.”

(In fact, his father paid $50,000 per night for the hospital stay at the end of his life.)

“When you oversave for the end of life, you give up years of your life while healthy and vibrant to buy a few extra weeks of life when you’re sick and immobile…. It’s much smarter to spend your healthcare money on the front end (to maintain your health and try to prevent disease) than to spend it at the end, when you get a lot less bang for every buck you spend.”

Receiving an inheritance seems like an odd time to consider extra insurance. If you fear using your savings, though, you may want to think through that possibility.

Your Loved Ones Want You to Feel Comfortable Spending Your Inheritance

Money is a tool. A means to an end.

And this includes your inheritance. The only difference is that those dollars may carry more emotional weight for you.

As Die With Zero frames it, “Having money helps you to achieve the goal of enjoying your life.” Whether it involves a “big house” for your kids, as in comedian Al Madrigal’s family, or something else entirely.

And isn’t this what your loved one would want from the inheritance that she or he gives you?

What Questions Do You Have About How to Spend an Inheritance?

Illumint specializes in inheritance advice for Millennial women. If anything in this article prompted a question for you, please send me an e-mail at kevin@illumintfc.com. I respond to every note!