Someone I know inherited $80,000 after a grandparent passed away. Within days, people were telling her what to do with it. Buy a condo. Pay off your car. Invest it all in the market right now before you miss the next rally. Her bank called, unprompted, offering to set up a meeting with their investment advisor.

She told me later that the money didn’t make her feel free. It made her feel pressured. Like every day she didn’t do something with it was a day she was failing.

That pressure is the first thing to ignore.

None of this is financial advice. I’m sharing a way to think through a windfall, not telling you what to do with yours. The right answer depends on your debts, your income, your goals, and a dozen other things only you know. What I can say is that moving slowly is almost never the wrong first step.

Step one: do nothing (on purpose)

The best first move with a large sum of money is to park it somewhere safe and boring, a high-interest savings account, and give yourself time to think. A few weeks. Maybe a couple of months. The money isn’t going anywhere, and no investment opportunity is so urgent that it can’t wait 30 days.

This isn’t laziness. It’s strategy. When you come into a sudden windfall, especially one tied to loss, your decision-making isn’t at its sharpest. Grief, guilt, excitement, anxiety, those emotions are real and they affect how you think about money. Giving yourself a cooling-off period is the most financially responsible thing you can do.

While the money sits in a HISA earning a modest return, you can research, think, and plan without the clock ticking.

The emotional side matters

Inheritances come with feelings that don’t fit neatly into a spreadsheet. Some people feel guilty spending money that someone else earned. Others feel a sense of obligation to use it “correctly,” whatever that means to them. Some feel pressure from family members who have opinions about what the money should be used for.

All of that is normal. And none of it should drive your financial decisions.

If the money came from someone who mattered to you, it’s okay to sit with that for a while before making moves. There’s no deadline. No one is grading you.

Pay off high-interest debt first

If you have credit card debt, a line of credit with a high rate, or any loan charging more than 7% or 8%, paying that off is almost certainly the best “investment” you can make. A credit card charging 20% interest means every dollar you leave on it costs you 20 cents a year. No investment reliably returns 20%.

A mortgage is different. Mortgage rates in Canada have been in the 4% to 6% range for the past couple of years, and the interest is relatively low compared to other debt. Paying down your mortgage is never a bad idea, but it’s not necessarily the highest-impact use of a windfall. You could earn more over time by investing the money, though that comes with risk.

Student loans, car loans, and other moderate-interest debt fall somewhere in between. There’s no universally right answer. But eliminating high-interest debt is almost always step one.

Max out your registered accounts

Once high-interest debt is handled, the next priority for most Canadians is filling up their tax-advantaged accounts. The order depends on your situation, and we have a full guide on how to think about TFSA vs. RRSP, but here’s the general idea.

Check your TFSA contribution room (you can find it on your CRA My Account). If you have room, fill it up. Everything earned inside a TFSA grows and comes out completely tax-free. For most people, this is the single best place for new money.

Next, consider your RRSP. If your income is high enough that the tax deduction is meaningful, contributing to your RRSP makes sense. But remember, you don’t have to use the deduction right away. You can contribute now and claim the deduction in a future year when your income is higher and the tax savings are greater.

If you’re saving for your first home, the FHSA is worth looking at too. It combines the tax deduction of an RRSP with the tax-free withdrawals of a TFSA, specifically for a home purchase.

An $80,000 windfall might be enough to max out multiple accounts. Once your registered accounts are full, the remainder goes into a non-registered (taxable) account, and we have a guide on what to do after maxing out your registered accounts if you’re in that position.

Lump sum vs. dollar cost averaging

This is one of the most debated questions in investing. Do you invest the full amount right now, or do you spread it out over several months?

The research generally supports lump-sum investing. Markets tend to go up over time, so putting money to work sooner means more time in the market. Studies have shown that lump-sum investing beats dollar-cost averaging (DCA) roughly two-thirds of the time.

But the research measures financial outcomes, not emotional ones. If you invest $80,000 in one shot and the market drops 15% the following week, you’re sitting on a $12,000 paper loss. Statistically, you’ll likely recover. Emotionally, it might shake your confidence in a way that leads to worse decisions down the road.

DCA, where you invest a fixed amount every month over six to twelve months, gives up a small statistical edge in exchange for smoother entry. You might end up with slightly less money in the long run. But you also avoid the gut punch of investing everything at the worst possible moment.

There’s no shame in choosing the approach that lets you sleep at night. We break this down more fully in our lump sum vs. DCA guide.

Common mistakes to avoid

Rushing into real estate. A windfall can feel like a down payment waiting to happen, but buying property is a 25-year commitment. Don’t let the money push you into a purchase you’re not ready for. If you weren’t planning to buy before the windfall, take time to think about whether you actually want to.

Giving too much away. It’s generous to want to share. But large gifts can create complicated dynamics with family and friends. Decide on a number you’re comfortable giving, and stick to it.

Panic-investing. Dumping money into whatever stock is trending because you feel like you should “do something” is how people turn windfalls into regrets. A boring, diversified portfolio will serve you far better than a hot tip.

Ignoring taxes. Inheritances in Canada are generally not taxed in the hands of the person receiving them. But the income you earn by investing the money is taxable (outside of registered accounts). Keep that in mind when you’re planning.

When to get professional advice

For a windfall under $50,000, you can probably handle this yourself with some research and a solid plan. For larger amounts, especially six figures and above, a fee-only financial planner can be worth the cost. They charge a flat fee or hourly rate, so their advice isn’t influenced by which products they sell.

The key is “fee-only,” not “fee-based.” A fee-based advisor might still earn commissions. A fee-only advisor earns nothing from the products they recommend. That distinction matters.

If you’re uncomfortable managing a large sum on your own, there’s no weakness in asking for help. A few hundred dollars for a professional plan can save you from a mistake worth thousands.

The bottom line

A windfall is a rare opportunity. The best thing you can do is resist the urgency, park the money somewhere safe, deal with any high-interest debt, fill your registered accounts in order of priority, and then invest the rest in a way that matches your risk tolerance and timeline. The approach doesn’t need to be clever. It just needs to be patient.

What to do with an inheritance or financial windfall