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

[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.

 

[street]

You are in great shape for your age financially. Great Job!!

Okay, if it were me, I would put it in some sort of investment account. I would have that money tagged for something down the road for your family or set aside for the kids.

 

[Ronstar]

I would save it in some kind of a college fund for the toddlers.

 

[MarieIG]

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. When I was your age, my net worth was just starting to come back from $0. (Savings were drained for university costs.)

 

[Car-Guy]

I would save it in some kind of a college fund for the toddlers.

+1

 

[Aerides]

What would the person who left it have wanted you to do?

 

[athena53]

I was in a similar position in late 2021 with a larger amount- Dad, may he rest in peace, left this earth and managed to leave behind far more than I expected after 18 months in LTC. I'm 70 so in a different position than you, but I don't need it- really. I bought myself a nice bracelet but most of the rest will be given away over 10 years- mostly to my grandchildren's 529s and the rest to charity. The exception will be a family trip someplace in the Caribbean or Central America in a year or so. (Youngest grandchild is only 3 1/2 right now.)

With $10,000 I'd just put most of it away for the kids; education.

 

[Life_by_Fire]

Thank you all for the thoughtful responses. I should say, some more is coming for the kids that I will put in their college fund accounts.

With this money, I think my grandmother would want me to do whatever would make me happy. The problem is I'm torn on exactly what that would be haha. I'm thinking I'll most likely put it in the investment pool but part of me wishes I could bring myself to spend 10-30% (as recommended earlier) on something nice just for me.

Anybody have any ideas on items to make life easier or more enjoyable at home?

 

[Aerides]

2 toddlers and you need ideas for easier at home? Lol... A housekeeper!

 

[steelyman]

Anybody have any ideas on items to make life easier or more enjoyable at home?

Maybe a sinfully comfortable chair? Recliner if you like. You can think of the source every time you sit back and say “ahhhhh, nice”.

 

[pacergal]

Why not spend/save 50/50? You have a good net worth for your age, so appear to be doing well with savings.

Ideas:
Take the family on a memorable trip (well for the adults, toddlers won't remember)
Buy something that reminds you of your Grandmother
Purchase something you have always wanted

If you can't think of anything right now, that's ok. Put the money in a savings account and know that it is there when you want. Your Grandmother gave it to you to use as you wish.

Common advice is to wait a bit, especially with an inheritance, to allow for the grief period.

Sympathies on the loss of your Grandmother

 

[CRLLS]

Why not spend/save 50/50? You have a good net worth for your age, so appear to be doing well with savings.

Ideas:
Take the family on a memorable trip (well for the adults, toddlers won't remember)
Buy something that reminds you of your Grandmother
Purchase something you have always wanted

If you can't think of anything right now, that's ok. Put the money in a savings account and know that it is there when you want. Your Grandmother gave it to you to use as you wish.

Common advice is to wait a bit, especially with an inheritance, to allow for the grief period.

Sympathies on the loss of your Grandmother

Whenever I have a choice like this and there is no obvious answer, 50/50 is my go-to solution.

My name is CRLLS, and I approve this message.

 

[jollystomper]

Our "rule" for those type of things, when we were your age, was to go have fun with 10-20% of it, and save/invest the rest.

 

[kgtest]

5k to each of the kids 529s. The gift of education can never be overvalued. I had nothing when it was my time for college. DW had hers completely paid for. Since neither of us had college debt (I paid cash for mine) it gave us a HUGE leg up IMHO. I was able to buy a bigger home, sooner, in a better neighborhood and my family is reaping the rewards of all of that. Which then allowed me to refinance sooner when rates were excellent, which then pushed me into the FIRE zone that I felt most comfortable with. On the flip side, my DS had college debt for quite some time, she recently bought a nice home in a nice neighborhood, but missed the 15yr super low rates, and is in a 30yr mortgage. She will be retiring a lot later than us, which is fine...just means working longer.

 

[qwerty3656]

Maybe something that creates family memories? We are much older, but my wife got $15k when her mother died. She uses the money to buy our kids plane tickets, etc. to come and see us.

 

[Teacher Terry]

Recently I was in the same position as you but a different stage of life at 68. I decided to spend half of the 20k on a trip and some other things I wanted. The other half I used to buy a IBond.

 

[N02L84ER]

DH was 42 when his GM died and he inherited $10K. Our NW was slightly less than $700K at that time. He invested 100% of the money within a month of receiving the money. We were both able to retire within the next 10 years and are both very happy with his decision.

 

[Lemonade]

Where was your grandmother from? How about a trip/vacation to that state or country to learn more about your roots? A nice getaway from the young ones, with a connection to your grandmother tied in. Any remaining funds into savings.

 

[foxfirev5]

DH was 42 when his GM died and he inherited $10K. Our NW was slightly less than $700K at that time. He invested 100% of the money within a month of receiving the money. We were both able to retire within the next 10 years and are both very happy with his decision.

FWIW the upfront 700k probably contributed much more than an inherited 10k.

 

[N02L84ER]

DH was 42 when his GM died and he inherited $10K. Our NW was slightly less than $700K at that time. He invested 100% of the money within a month of receiving the money. We were both able to retire within the next 10 years and are both very happy with his decision.

FWIW the upfront 700k probably contributed much more than an inherited 10k.

True, of course. I was just pointing out that the mind set to invest 100% of any extra money at that time helped us to retire early.

 

[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"