To Blow (that Dough) or Not to Blow, That is the Question

[Jerry1]

I would spend it all on a trip that would create a memory. True, the kids may be a bit young for a lifetime memory, but you’re not. We took our kids to Disney and spent a lot of money for us at that time. I don’t regret it one bit. It still stands out in my mind as one of the best trips we ever experienced together as a family. It wasn’t so much that it was Disney. It was because we did not focus on the budget. We didn’t say no to the kids when they asked for stuff or to do something. We just did it.

Funny story - we gave each of the kids $100 for some extras. We took care of the obligatory Mickey Mouse hats and t-shirts but they had the $100 for stuff. You can tell how long ago we went to Disney that $100 was a good amount of money. Anyway, a couple days into the trip, we realized the kids weren’t spending any money. They didn’t physically have the money, it was just a tab we’d run for them. Come to figure out that they thought that if they didn’t spend the money, we’d give them the $100 when we got home. Sorry, it’s vacation money. Spend it or lose it. They spent it.

[Sunset]

I always advise someone getting an inheritance, if they are not going to blow it immediately on something, is to put it into some investment "IN THEIR NAME ONLY".

Not a joint/shared account ever, not even to cash the check, and move it.

Because, ~50% of even the most wonderful marriages end in divorce. It will be at that time the person will find out inheritances kept always separate are not counted against them in the division (in most places).

[EastWest Gal]

It's $10K vs NW of $1.3 million. It doesn't matter if you co-mingle that amount. FWIW, I received a seven-figure inheritance from my dad. I co-mingled it into our investments. This year we're celebrating our 39th wedding anniversary.

Do something fun, but wait awhile to decide. Put it away for a memorable family trip when your kids are old enough to enjoy it, and for you not to spend your time chasing toddlers. Maybe an I-Bond. In 5 years they'll be old enough to appreciate the travel experience.

[oiseux]

I'm of the mind of taking 10 to 20% (or whatever you feel) and buying some that will help you or your kids to remember her. Not everyone has a heirloom to pass down, but sometimes we can start our own.

I'm sorry for your loss.

[RobbieB]

Do what you want to do. Or honor your relative and do what you think they would want you to do.

Me, I'd bank half and blow the rest. No, wait. That's me at your age.

I'd blow all of it as 10 grand is a mere "drop in the bucket"

[DrRoy]

Quote:

You can do both; i.e. take between 10 - 30 percent to buy a keepsake or experience, and invest the rest in something long term. P.S. Great job on you net worth.

+1, although I was going to say 10-20%.

[The Cosmic Avenger]

Too funny...my rule of thumb for windfalls like that is to splurge 10-15% on myself and save the rest. Not surprising that great savers think alike! Although with an amount that is such a small percentage of your NW, you could probably splurge half and save half (not something I'd advise with a six-figure sum, natch). You're also in much better shape than we were at 33, so there's that, too.

[Gary from Tampa]

Normally I would say save half spend half. But with your NW I would spend half on something for you and the wife, and put one quarter in an investment for each of the toddlers to draw on from when they get older. It would be Grannys gift to them. Also don't fall into the trap of saving everything and spending nothing. Balance your saving and spending. Enjoy life now and save for the future. From 77YO

[The Cosmic Avenger]

Oh, I forgot; another tip for windfalls earlier in your working life is, if you haven't yet maxed out your 401(k) contributions, jack them up or even max them out, park the money in a savings or checking account, and draw it down to supplement the missing income. You might have to dial back on the contribution eventually, but maybe not, either way you're giving your retirement accounts a few decades to grow that added contribution.

[PandaBear]

I hope this doesn’t sound too funny, but with two little kids at home, do you have a king bed? We had lazy weekend mornings with all three of mine on a queen bed. We could have used the bigger bed. As they got a little older, we still sometimes had visitors and it was also the place I’d lie down with one of the kids and we’d have some heart to hearts.

Just a thought.

[Sojourner]

You are asking about how (or even whether) to spend some "found" money that equates to roughly 0.75% of your total investable net worth. No wonder you have so much saved and invested at the age of 33!

The answer, IMHO, is to spend some (between 10% and 50%) and invest the rest. No matter what you do, you are in a great position financially and shouldn't worry about occasional, small splurges like this.

[MarieIG]

Quote:

Originally Posted by EastWest Gal It's $10K vs NW of $1.3 million. It doesn't matter if you co-mingle that amount. FWIW, I received a seven-figure inheritance from my dad. I co-mingled it into our investments. This year we're celebrating our 39th wedding anniversary. Do something fun, but wait awhile to decide. Put it away for a memorable family trip when your kids are old enough to enjoy it, and for you not to spend your time chasing toddlers. Maybe an I-Bond. In 5 years they'll be old enough to appreciate the travel experience.

My DGF passed when I was 2 years old. When I was 21 DGM gave me $1,000 which she told me DGF had been contributing to a passbook for me. Obviously, she did not invest the money, and it was a small sum, but I cried because he had loved me enough to do that for me.

[Life_by_Fire]

Wow lots of great suggestions and it seems like I should splurge some. Direct conflict with how I generally live haha. Putting the amount of money in to percentage terms of the entire profile does help.

If I can't bring myself to spend it now, maybe I will set some aside for a trip to my grandmother's homeland, Norway. That would be a great experience.

Quote:

Originally Posted by PandaBear I hope this doesn’t sound too funny, but with two little kids at home, do you have a king bed? We had lazy weekend mornings with all three of mine on a queen bed. We could have used the bigger bed. As they got a little older, we still sometimes had visitors and it was also the place I’d lie down with one of the kids and we’d have some heart to hearts. Just a thought.

If we hadn't just upgraded to a King Bed, this would def be what I spent money on. We often find ourselves with 2 small visitors who somehow take up the same amount of room as a full grown horse.

And thank you everyone for the condolences. They are much appreciated.

[HI Bill]

Invest 75-100% in VTI. Sounds like you have no burning desire to spend $!

BTW, after 20 years of saving and LBYM, I'm closer to Robbie (but not there yet), and have a budget of twice what I was spending the last year I was working and saving for ER. Deferred spending is worth it, as long as you don't deprive yourselves of things in life that give you true joy!

[Badger]

Quote:

Originally Posted by Life_by_Fire Hi everyone. Recently received an inheritance of $10k. I've been thinking what to do with it and how to best honor the person I received it from. My gut reaction is to invest/save it all but I've been thinking maybe I should spend some of it on something for myself (I never spend money on myself). Anyone have any thoughts, suggestions, ideas, etc.? Quick note, I'm 33 and married with 2 toddlers. Excluding the house we have NW of ~1.3 mill.

I think you already have it covered. I would follow your gut reaction for now.
As with most important decisions it is often a good idea to take some time to think about what would make you most happy. In the meantime let it sit in some type of short term investment. Since you don't usually spend money on yourself it may take some time to decide. It isn't necessary to rush into a decision or determine how much you might want to spend.

Cheers!

[bigriver]

I have to ask why did the person leave you money and what do you think they would want you to do with it. I’ve left 2 good friends some money and I hope they do something to enjoy themselves and remember me by it.

[Sirka]

I would put it in college funds.

[imnontrad]

Consider:
1) A percentage donated to a charity your benefactor supported
2) A percentage in the toddlers 529 accounts for their future
3) A larger percentage invested for your retirement
and
4) Something you want for yourself (trip, item for the house) Every time you see/remember hat item, you will think of your benefactor.

[arcyallen]

I would treat it as a big picture: your net worth is now $1.31M. The new money isn't really special, it just feels that way. As Nobel prize winner (I'm economics) was once asked what he did with his prize money. He said (something like) "I don't really have prize money. It's just money, like the rest of it."

[Closet_Gamer]

Quote:

Originally Posted by Life_by_Fire Hi everyone. Recently received an inheritance of $10k. I've been thinking what to do with it and how to best honor the person I received it from. My gut reaction is to invest/save it all but I've been thinking maybe I should spend some of it on something for myself (I never spend money on myself). Anyone have any thoughts, suggestions, ideas, etc.? Quick note, I'm 33 and married with 2 toddlers. Excluding the house we have NW of ~1.3 mill.

Many years ago DW's great aunt starting sending checks to the extended family. She and her husband had saved and invested forever but had no kids. She started doling out $5K checks and ultimately sent everyone a $10K check.

We decided that if she had the discipilne to save all those years, the best way to appreciate her effort was to do the same thing. Mid-90's so we put the money into a 6.75% five year CD.

When we later bought a house we used the money towards a down payment.

YMMV