Inheritance - how would you spend?

[Disney Mommy D]

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.

This is what I would do as well.

 

[imsayin]

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.

It depends on the inheritance. If you inherit a 401k or IRA account, there are definitely taxes that you will have to pay.

 

[bettymae1121]

I inherited about that amount about 18 months ago. We used about 1/2 to clear our CC debt and put the other half in the bank for rainy day savings (gave us about a six month emergency fund). Our only other debt after that was a modest mortgage and a car note. We could have paid off the car too but I felt better with the cash in the bank.

We didn't really do anything "fun" with it, but there wasn't anything we really wanted at the time, either.

 

[meajuly5]

I would repay all the debt but the braces and put some into short term savings and the rest into investment acct or college accts

 

[Stacy's a freak]

If you have 0% financing in the braces, I would put the braces portion into an interest bearing account and draw from it for the payments. This may only net you out a small amount of interest, but why payoff a 0% loan if you don't have to.

But, I would payoff those credit cards first, for sure. Even with a 0% there, there is no need to keep a balance on them. It can only affect your FICO score in a negative way. If you have a high precentage of debt to credit, that negatively affects your score. But keep that card open to reap the benefits of the good payment history and open credit.

Congrats to you!

 

[KS_Disney_Dad]

I'm with those that say payoff the debt.

Since you didn't make any mention in your original post that the car and braces payments were putting a strain on you, I'd continue to make those payments...to yourself. Open an account and have that money direct deposited to it. You won't miss it and in short time you'll have a nice emergency fund. Or direct deposit into a 529 college fund for the kids.

 

[TLuvsD]

I agree with paying off the debt, setting some aside in emergency/college funds. Before you do that, get a copy of "Paying for College without Going Broke". Great advice for how to set up the college savings, etc. It's revised annually, costs about $15. I highly recommend it...nothing shady or strange, just good straight forward advice. Slight differences can make a big impact.

 

[HippieChickadee]

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?

I would buy each kid $5,000 in stocks- (let them sit and forget about them- maybe a freedom fund)

I would put a big chunk into savings

and I would take a trip as a family. Maybe a cruise.

I would ignore the bills unless you are in trouble and continue paying them as usual. It's unexpected money after all.

 

[ceemys]

Another vote to pay off ALL of your debt. It really feels so great!!

 

[ldo]

If you needed to put $12K in repars on CC, then I assume you didn't have extra $$ in checking/savings accounts for this. If not, then I would pay CC debt, keep the car loan @ 3%, keep paying $200 braces (unless high interest rate), fund SOME $ into kids college accounts, put the rest in an EM fund, so that you have at least $10K for EM, unexpected costs (a financial safety cushion), and take a small, cheap trip that is under $2K (like WDW with free dining, or offsite with fun pass for Seaworld, Williamsburg with Busch Gardens, etc., or even an off-season cheap cruise). Your house might not sell, you might needs repairs you don't know about, extra moving expenses, new furniture for new house, etc.--so b/c of that, I would keep car loan--at least until I had moved into the new places and was all set. Elaine

 

[ssawka]

I would pay off any debt that you are paying interest on and then put aside the money to pay off any 0% debt. Then, I would take a vacation and put any remainder towards the kids college funds. Then with the money you save from not paying bills, I would continue to add to the college funds, assuming your retirement savings is sound. Retirement should come before the college funds!

 

[sweetdana]

I would spend 25% on yourself, FUN FUN FUN STUFF a Disney trip is a must *** (at least in my home), upgrades to home, or anything else you want to splurge on, tvs, toys what ever .. but leave only 25% for fun. this is really a lot of money. (amount depends on taxes if any.)

The other 75% I would put 6 months aside bills liquid ( unless you have this skip if so) and the rest for debt, and the balance savings.


I live debt free incld no mortgage I CANNOT stress the level of stress off your shoulders when you have no bills per month ( minus util).

 

[MooskaMinnie]

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.

This this this.

Paying off debts would be my #1, then kids' college funds.

 

[manning]

Pay off the debt.. Paying interest reduces what you have available to spend.

 

[Marlea98]

.

 

[Ashlotte]

This this this.

Paying off debts would be my #1, then kids' college funds.

Another vote for this. Not as much immediate gratification as splurging, but the most financially responsible and most life changing in the long run.

 

[DLgal]

We were in a similar situation a few yeas ago. We paid off both cars, the last student loan, and our remaining CC debt. We didn't have any left over after that, but our financial situation was much better. We were able to take a really nice vacation later that year since we had so much more disposable income.

I wouldnt recommend putting large lump sums into the 529 plans because of how those investments will be made. Makes more sense to up your monthly contributions (double or triple them) with some of the extra money you will have going forward.

 

[mom to minnie&mickey]

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?

OK, I know my opinion may not be popular and I hope I will not be flamed but this is what I would do. Assuming that you are currently able to pay all your bills on time with your current income I would bank all of the money minus maybe a couple of thousand for a vacation (got to have some fun!). My thinking is that #1 will be paid off when the house sells. The rest are ordinary monthly payments that you are used to paying (we just finished this month paying or second child's ortho. at $230/month. I have been doing that payment for 5 years total for 2 kids and we just got used to it) Your debt is not excessive or out of the ordinary and even if you pay everything off how long will it be before you are back to some kind of debt (car/home repairs, furniture, whatever... life happens.) If the reason you are not paying your 0% cc is lack of funds then I would pay that off as well and get rid of it.

On the other hand, how feasible is it that you will be able to save $40,000 anytime soon. My family would have such peace of mind knowing that even if we did not save anything on a month to month basis that money was there growing steadily if invested properly for a true emergency or for the future.
Perhaps down the road it can be used for education.

Of course, only you know your true financial situation and I am sure any decision you make will be the right one for your family. Good luck!

 

[DLgal]

OK, I know my opinion may not be popular and I hope I will not be flamed but this is what I would do. Assuming that you are currently able to pay all your bills on time with your current income I would bank all of the money minus maybe a couple of thousand for a vacation (got to have some fun!). My thinking is that #1 will be paid off when the house sells. The rest are ordinary monthly payments that you are used to paying (we just finished this month paying or second child's ortho. at $230/month. I have been doing that payment for 5 years total for 2 kids and we just got used to it) Your debt is not excessive or out of the ordinary and even if you pay everything off how long will it be before you are back to some kind of debt (car/home repairs, furniture, whatever... life happens.) If the reason you are not paying your 0% cc is lack of funds then I would pay that off as well and get rid of it.

On the other hand, how feasible is it that you will be able to save $40,000 anytime soon. My family would have such peace of mind knowing that even if we did not save anything on a month to month basis that money was there growing steadily if invested properly for a true emergency or for the future.
Perhaps down the road it can be used for education.

Of course, only you know your true financial situation and I am sure any decision you make will be the right one for your family. Good luck!

This is pretty good advice. OP, truly your debt situation is pretty minor. But, it does sort of depend on whether you are TRULY comfortable with all your current payments on your income. If you actually have no savings, this would be a great way to establish that.

 

[MistressMerryweather]

In your situation, I would pay off all debt and take a Disney trip.
If it were my situation, I would do home renovations and take a Disney trip.