Inheritance - how would you spend?

[tempdis]

Frequent poster - temporary account since I would rather not have people know my debt

I am getting a very unexpected inheritance of $40,000 to $45,000. Just wondering what others would do with the money. I have my thoughts - just curious what others would do.

Currently have our house on the market prior to knowing I would get this inheritance. Had to deal with some maintenance/upgrade issues to get the house ready and most of it went on credit with the intent to pay it off with some of the equity when we sold the house. That is about $12K.

other credit card debit of about $4K - old stupid purchasing debt that I have just been rolling over onto 0% interest credit cards so haven't focused much on paying it off.

one car paid off, other car owe about $13K at 3% interest, $295 a month

braces - $200 a month, about $3K left to pay off,0% interest

that's the total debt

not much in the kids college accounts 4- 7 years out. Maybe $10K each. 401K is in good shape (until the next stock market drop, ha). I am pushing toward community college for the first year or two.

And, to be honest, I would like to have some of it to be found fun money - a trip? some new things for the new home when we finally sell our house?

So - what would you do with the windfall? Any fun money spending?

 

[sharonmickey]

If it were me, I would first pay off all my debts. I don't like having to owe money. Anyway, I would use the money I had left after paying my debts for a trip to Disney of course. Whatever was left I would put in the bank.

 

[Darcy03231]

I would pay off all the debt and then split whatever is left between the kids college accounts.

I would then take the money I was saving each month by not having to pay the debt to save for a trip.

 

[barkley]

after you pay off your debts you would still have at least 8K left which is a very nice chunk of change to take a vacation, although I gotta say that when we paid off all our debts (excluding mortgage) life became much more vacation like on a daily basis

 

[katielafave]

Agree with others so far. Pay off all the debt. Save the rest for college fund/new house stuff and then take current monthly payments and turn into vacation savings.

 

[ceecee]

Well, obviously you want to pay off all credit card debts. I would pay off all of your debts, then put at least 3-6 mos as an emergency fund for living expenses and then extra fund for unknowns (so you wouldn't have to charge unexpected repairs). Pay off the braces since it is also a debt. Then maybe take a few thousand for fun money. I like everything paid for, so that is what I would do and what I have done.

 

[KaLyn]

This is exactly what we're dealing with now! Here's what we did...

1st - Pay off all debts (credit cards, cars, loans, student loans, etc) this is saving us $600 a month!
2nd - Put new siding on the house.
3rd - Surprise the girls and take them on their first trip to Disney!
4th - The rest gets put into savings/retirement accounts.

Sent from my iPad using the DISBoards app.

 

[purpledisneyprncess]

I would pay off all the debt. With the leftover money, I would plan a very modest and cheap Disney trip. (Value resort, etc). Then any leftover pint from that gets put into the bank for savings.

 

[lovin'fl]

I would pay off CC and braces and keep the car payment (just what I would do...DH would want to pay off car). You will pay off the home repairs when your house sells. I would also put a big chunk in the college funds. Keep a few K to play with. We got a little inheritance in 2006 and paid off our CC and car payment and then bought our 1st DVC contract.

 

[barkley]

This is exactly what we're dealing with now! Here's what we did...

1st - Pay off all debts (credit cards, cars, loans, student loans, etc) this is saving us $600 a month!
2nd - Put new siding on the house.
3rd - Surprise the girls and take them on their first trip to Disney!
4th - The rest gets put into savings/retirement accounts.

Sent from my iPad using the DISBoards app.

what about #5-call dave ramsey and scream "WE'RE DEBT FREEEEEEEEEEEE"

 

[KaLyn]

what about #5-call dave ramsey and scream "WE'RE DEBT FREEEEEEEEEEEE"

haahahahahahahahahahahahahahahahahahahahahaha!

Sent from my iPad using the DISBoards app.

 

[kathie859]

Another vote for paying off ALL debt, put aside a 6 month emergency fund and invest the rest or, if you'd like to stay in your current home, use the money to pay down the mortgage and possibly refinance to get a lower payment and/or interest rate.

You should be able to save for your splurge vacation easily saving up the money that used to go towards debt.

Congrats! There's nothing better than being debt free.

 

[ZehnJahren]

Pay off all your debt. You'll be happy later to have the extra money every month since you're not paying on that debt, and being debt free is the best place to be in a bad economy. And a decent economy. And a good economy.

 

[tvguy]

I would pay off all the debt and then split whatever is left between the kids college accounts.

I would then take the money I was saving each month by not having to pay the debt to save for a trip.

I agree with the first part.

On the second, I would put half the savings into the kids college fund, and half into a trip fund, maybe even 3/4 into the college fund and 1/4 into a trip fund because you are way way behind on college savings with one child 4 years away.

 

[tempdis]

Thanks - I am thinking what everyone else is thinking. Just wanted to make sure I wasn't missing something It will feel so good to be debt free (minus mortgage).

I won't see the money for a few months so I have time to really make sure I do the right thing but I know what the right thing is! Now, if those few months would pass quickly and if we could sell our darn house, I'll have a huge burden lifted! We sold the house twice already - first time the buyers ended up not having enough money. 2nd time the buyer got cold feet - she paid for all the inspections, appraisal, etc. Her agent and my agent said they had never seen anything like it. Go figure. And, the worst part is is cost us prime selling season. Homes were selling in 30 days in our area this summer. Here we sit ...

 

[Marionnette]

Frequent poster - temporary account since I would rather not have people know my debt

I am getting a very unexpected inheritance of $40,000 to $45,000. Just wondering what others would do with the money. I have my thoughts - just curious what others would do.

1 Currently have our house on the market prior to knowing I would get this inheritance. Had to deal with some maintenance/upgrade issues to get the house ready and most of it went on credit with the intent to pay it off with some of the equity when we sold the house. That is about $12K.

2 other credit card debit of about $4K - old stupid purchasing debt that I have just been rolling over onto 0% interest credit cards so haven't focused much on paying it off.

3 one car paid off, other car owe about $13K at 3% interest, $295 a month

4 braces - $200 a month, about $3K left to pay off,0% interest

that's the total debt

not much in the kids college accounts 4- 7 years out. Maybe $10K each. 401K is in good shape (until the next stock market drop, ha). I am pushing toward community college for the first year or two.

And, to be honest, I would like to have some of it to be found fun money - a trip? some new things for the new home when we finally sell our house?

So - what would you do with the windfall? Any fun money spending?

1. Pay the home improvement loan off. You'll save on the interest and you will pay yourself back when the house sells.

2. Rolling credit card debts is a dangerous game. You're paying balance transfer fees every time that you move that money. You risk running out of 0% offers at some point. You could be late with a payment just one month and you're interest balloons to an outrageous rate overnight. Pay it off.

3. If you're paying $295/month and you owe $13K, then you have almost 4 years of payments left on that car. Pay it off now and begin putting that money you would have paid on the car into the kids' college accounts with a heavier emphasis on funding the older child's.

4. Don't pay the braces off. Continue to pay the $200/month over the next 15 months. It's a short period of time and it's guaranteed to be 0% interest. When the braces are paid off, add the $200 you would have paid on that bill to the kids' college accounts. This time, split it evenly between the kids.

That still leaves you with more than $10K-$15K. Use that to build up your emergency fund if it isn't enough to cover your bills for 6 months but leave $5K out for something fun.

 

[justlook3]

Lots of good ideas. I want to add that if you don't already have an accountant, get one to do your taxes. And not one of those tax places, a regular accountant. Whatever you pay him or her will be well worth it having them deal with the new complications on your taxes. We had an inheritance (that also involved property so that was another can of worms) and it was so worth it.

 

[lauradis]

1. Pay the home improvement loan off. You'll save on the interest and you will pay yourself back when the house sells.

2. Rolling credit card debts is a dangerous game. You're paying balance transfer fees every time that you move that money. You risk running out of 0% offers at some point. You could be late with a payment just one month and you're interest balloons to an outrageous rate overnight. Pay it off.

3. If you're paying $295/month and you owe $13K, then you have almost 4 years of payments left on that car. Pay it off now and begin putting that money you would have paid on the car into the kids' college accounts with a heavier emphasis on funding the older child's.

4. Don't pay the braces off. Continue to pay the $200/month over the next 15 months. It's a short period of time and it's guaranteed to be 0% interest. When the braces are paid off, add the $200 you would have paid on that bill to the kids' college accounts. This time, split it evenly between the kids.

That still leaves you with more than $10K-$15K. Use that to build up your emergency fund if it isn't enough to cover your bills for 6 months but leave $5K out for something fun.

Yep this is what I would do. But I would split 5 down middle half to you and half to hubby, for whatever you both desire.

 

[crisi]

We put it all towards the kids college, but had no debt other than mortgage, and I want to keep that debt.

An inheritance won't hit your taxes - it hits the taxes of the estate.

 

[Colleen27]

I'd pay off all the debts, arrange direct contributions in the amount of those monthly payments into the kids' college funds, and enjoy what remains of the inheritance. IMO finances are a careful balance between responsibility and enjoyment and that's what I look to accomplish with any "found" money - find that happy middle ground that exists between irresponsible splurging and tedious devotion to the long-term.