unexpected windfall....

[buckler]

I know you said you are saving for retirement already, but if you haven't contributed to a ROTH IRA for 2009 or 2010 yet (and you meet the income limits) you could put the money in a ROTH IRA. Coincidentally, the maximum you can contribute per year per person is $5,000.

 

[pantherlj]

If you aren't currently on a "financial plan" of some sort, I think it's a really personal decision.

Me? I would do 2K to debt, 2K to emergency fund and 1K to have fun with on Grandpa's behalf (nice furniture that will last a long time, a nice summer trip, etc)

But then again, I am not on a structured plan I currently have more in savings than based on the debt I have based on everything I have read but I just can't seem to get past that mental point of having a few months worth of mortgage in savings even though I know I am paying interest on my debt.

 

[3boymthr]

I got such a windfall (though not quite as much $) when my DGM passed away a decade ago. I too was in a dilemma of what to do. In the end I set it aside and left it for years until I really needed it. I was soo soo grateful for that money when it finally came time to use it.

I have to admit that with that much money I would probably go a tiny bit crazy and treat the family to a vacation "weekend" of an overnight at a fun location like coco-key or tubing in No. Conway and put the rest of it away.

 

[mommymeg]

My mother had a similar inheritance a few years ago... she contemplated long and hard over what she felt was the right thing to do with it. Paying down debt is always an option for everyone...I don't know anyone with ZERO debt. In the end, my mother decided to do something that will leave a lasting reflection of our dear Uncle Dan...
Our family enjoys the beach and every summer we head to New Jersey several times...There are numerous "camp grounds" that offer purchase of a trailer or RV on a lot that is allowed access 8 months out of the year. In the end my mother decided to put her inheritance towards purchasing a lot and RV...and now every summer my mother enjoys herself and her grandchildren at "Uncle Dan's Place". Every time we go we are reminded of our Dear Uncle Dan and how much he meant to us.

 

[bethy]

I vote emergency fund.

Maybe also take a small amount (a couple hundred) and do something w/ your family that your grandfather would have like to enjoy w/ you or known that you did.

This is my vote too. On the one hand $5000 is a lot but on the other hand it's easy to envision an emergency or two that could come up where you would need that much money on hand in order to avoid going into further debt. . . .

 

[MickeyMomOfThree]

As much as I love the BB, sometimes I think I don't belong here. This may be one of those times. I hate our debt and am working hard to get out of it, but if God forbid my grandpa passed, I would want to do something that honored or remembered him. And I am by no mean saying you need a thing to remember someone, but I still would want to do something with part of it.

When my grandparents pass I will be willed their grandfather clock. I don't look forward to the day I get it, I'd much rather have them healthy as long as I can, but I do know that when they are gone I will cherish that clock forever.

For $1000 you could get a grandfather clock and still have $4000 to put towards debt, emergencies, etc. If that isn't your thing, there are pleanty of options of something that you can have, cherish, and pass on yourself someday.

Sorry for the loss of your grandpa. Mine means the world to me as does my grandma. They raised me when my mom and dad both wouldn't or couldn't. They are almost 73 and I am starting to see that they are aging and it makes me so sad. I can't imagine the day when I can't call or see them. Grandparents are so special.

 

[SarahKate]

I'm definitely no financial expert, but agree with pantherlj's idea of some to debt, some to the EF and another amount on something tangible or something special to do w/ your family. I don't mean splitting things "three ways" equally ....definitely more to debt and the EF.

I know some people don't have the sentimentality of wanting to actually BUY something tangible to remember someone by, but if you are a sentimental person then definitely do something like that. Something that you would look at and remember him - could be a beautiful wall hanging for home, or maybe a blown up picture of you and your grandpa/him by himself/family pic with him that you could put into a nice frame and have displayed. Or something more practical that you could really NEED for your home.

 

[RNtheRN]

Give it to me, I'll hold it for you. (wink-wink-nudge-nuge)

 

[Ka' eo]

Pay down the debt! You are asking for advice on what the best use of the money is. Go add up how much interest you pay each month.

I would NOT buy a hutch or jewelry, with all due respect.

Not paying down debt because it won't cover it all, is a terrible excuse not to pay down debt.

Good luck and I hope you figure out what you'd like to do.

 

[neatokimmo]

If someone handed your Grandfather 5K, what would he have done with it?

That is what I'd do with the money.

If you have no idea, I wouldn't use something special to pay down regular old debt. I'd use it to improve the quality of your life. How is your bed? If you are better rested, you'll have better days. Overweight? Use the cash for a diet program. Need more family time? Get a Wii and have family game night. That way you can look back and say Grandpa helped me achieve a particular goal that made my life better.

 

[Swimalie]

I would definitely put more into your emergency fund if it isn't sitting at 6 months salary now. If that is sitting at 6 months salary now, then pay down debt with part of the money and then use some of it to do something neat like season tickets to the zoo or something you and your family can do together for the year that you think your grandmother and grandfather would love.

I got a larger inheritance from my grandmother and sadly (but good for our bank account), it's just sitting in the bank. Now, it's collecting a nice interest for us but we need to decide what to do with it. We've talked about granite counters My grandmother would have loved that.

One thing I always did when my grandparents sent me money if, once I spent it on something tangible, send them a picture of what it was or at least tell them. Once they sent me $1000 to put as a down payment on my first car. So I sent them a picture of the car with the thank you note. So what ever you do, let your grandmother know what you did with the money so she knows it went to good use.

 

[GoofyGolferGirl]

I would just put the money in savings or a CD and let it earn a little interest ( and i mean little ha) just until I decided what I really wanted to do with it. You sound like you are very "business minded" and headed in the right direction before this money just shocked because of the windfall. I would buy something even if it was a very nice music box something that was special to your grandfather and you it doesn't have to cost a lot of money $50.00 to $100.00 it is not how much it cost just that it is very special to you an you don't have to buy it right away it is a know it when you see it thing! That is just me, but I am a sentimental fool and always have been! My grandparents sent me money for my birthday and christmas every year and I always went and bought a charm for my charm bracelet with there name and the occasion. They did not cost much but I still love to look at that bracelet and read each one, so does my DD. I am sorry for your loss!

 

[jfoofj]

Thanks to everyone for all the great ideas.

My grandfather obviously was pretty smart financially to get to where he was, so I think that I will be using half of the money to pay down debt, and get me that much closer to being debt free, and half into my emergency fund. I talked to my siblings and we all agree that we each want to take a portion of the money and all together donate it to a charity in Gramps honor, my Gram would really like that I'm sure.

I'm also going to buy the Dave Ramsey book.

ETA- thank you to everyone for your condolences too, much appreciated.

Also, my emergency fund is a savings account in a bank that I don't have a check book or ATM card to... I did this intentionally so that I have to physically DRIVE there to take the money out, so that it couldn't be nickel and dimed.

 

[Swimalie]

The donation in his honor is an awesome idea!

 

[disneymarie]

So, my grandfather passed away in January... he was 89 and had a great life. He left my gram (who misses him horribly...), six children, 11 grandchildren, and 9 great-grandchildren. Today I got a card in the mail from my gram with a check for $5000.00 in it, "from Grandpa". I am shocked. Totally shocked. While I would consider my grandparents to be well off (he was very successful in his career, they have 2 homes, etc), I never in any way, shape, or form expected any money from him. I didn't really even think about it much, but I guess I figured my gram would get everything, then maybe when she passes spread any money to her children. Especially with so many children and grandchildren, I just never expected anything like this!

I am still trying to digest what to do with this check. I'm going to deposit it tomorrow and think about it for a few days. I am just looking for some input from some budget minded people. We have a $280,000 mortage on our home (which we bought for $399,000 in 2005... I don't even want to think about what it is worth now... but we have no intentions of moving anytime soon, good interest rate on mortgage). DH and I have some debt on credit cards, but it was transferred to a 3.9% interest till it is paid off (approx $8000 from re-doing our floors throughout the house/work in kitchen). We don't have a great "cushion" savings account... I have been trying to hard to pay down debt (finally got the student loans paid off, and DH had assumed $26,000 in debt from his divorce in 2002, all paid off) that we only have a couple thousand in an emergency fund. We both contribute to our retirements, and are on track with that, but the kids don't have much in the way of college funds (but due to DH's job they can get free tuition to any MA state university... an option...). We each owe on our trucks... too much... I owe $12,000 and DH owes $10,000, trucks are newer, in good shape, with extended warranties, good interest rates on the loans. We also have a loan on a boat, but is is a 12 year loan and the interest is low and the payment is approx $100.00/month. I have about $600 in a vacation fund too, that I deposit $50/week to, we are planning on going on a cruise next year.

I just got my tax refund, and used half to pay down debt, and with the other half bought a new mattress and couch (both which we were in desperate need of!)

Any advice (aside from calling Gram to say thank you, all over that!) would be appreciated!

ETA........ ugh, after re-reading this I feel like I have SO much debt! That is why I have hardly any savings, I just keep trying to pay stuff off! DH and I have good jobs, pretty secure, and make approx $112,000/year combined, and we have a plan to have at least our credit card debt paid off this year. We are not HUGE spenders, but we aren't coupon cutters either (but I'm trying). We go out to eat, to the movies, one "big" vacation every other year, spend too much on birthdays/christmas, but my goal is to be debt free (other than house) which I feel like we should be able to do with the money we make.

What an honor for grandma to fulfill a request in her time of loss. I know he will be missed and honored by your family.

What a wonderful grandma, being on a fixed income and all. Maybe it was in a life insurance policy he had for a lond time and wanted to have the grandkids have a cushion. OR , Grandpa must have left instructions in his Will. For geneology, contact the courthouse register of wills for a copy of the probated Will if there is one.
I did this for my children as part of my geneology. Only in our case my chidren were part of the Will and the ex never notified them although he was executor.

But, it was neat reading the way the grandfather cared for the grandkids and great grand kids.