When Pei received a one-time inheritance from her grandmother, she considered including it in her budget as income. What is the problem with taking that approach?

Question

When Pei received a one-time inheritance from her grandmother, she considered including it in her budget as income. What is the problem with taking that approach?

-including it would make her average income estimate less accurate
-the inheritance can be considered an investment for tax purposes
-the inheritance is not a fixed expense
-adding the inheritance would make it less liquid

Answer 1

When Pei received a one-time inheritance from her grandmother, she considered including it in her budget as income. What is the problem with taking that approach?

The inheritance is not a consistent or reliable source of income, so including it in the budget as such could lead to inaccurate financial planning.