KmmFIdreamer
Recycles dryer sheets
In my 50's I inherited money and am glad that I was mostly wise with it. I was already on a Dave Ramsey plan so I knew to just start applying it to Baby steps. I paid off all debt except my mortgage within a month. Established an Efund of 3-6 months. I earmarked a small amount for spending but it was stuff we really did absolutely need - a new mattress, a clothes dryer, replaced the old furnace and water heater in our house.
After that (about 9 months later) with a substantial amount of money left, I looked at what would improve my life that was more "luxurious". I bought a used vehicle that was 2 years old and low mileage. Since I am now "debt free" I started a car replacement/repair fund from a payroll withdrawal because that was the biggest thing that created debt for us in the first place. I also paid off about 25% of my mortgage in one lump sum, and got on a firm footing of prepaying my mortgage monthly to make it go away at a projected retirement age that I was comfortable with.
At that point I still had money left and it was a year later with less emotional attachment. I looked at what I should do with it and decided that rather than paying the mortgage off totally, I would invest in some vacation rental property to generate greater income for myself. (My entire 401(k) was already in stocks and I didn't want to risk putting all the inheritance there too...)
Two years later the "inheritance" is gone except for the Efund, but I am on a firm footing financially now that will benefit me the rest of my life. I am putting about 40% of income into retirement and savings vehicles and working that mortgage away as well. I have a paid off rental property that generates $1000+ dollars a month average profit and that will continue to provide me income into retirement (plus I can occasionally use it myself when it is not rented!) That was the hardest decision was whether to invest or do a mortgage payoff - I had to evaluate the value of the increased income for life against the time it would take to pay off the mortgage for where I live. Considering I might sell the house I live in anyway when I retire, I think that I made the right choice for me....
All in all, a step by step plan of what is most to least priority is the way to go. Then take your time doing what you need too. It doesn't hurt cash to sit into the bank for a while until you really decide what to do with it. (Everybody I work with said they would quit their job immediately, but they would have been broke and looking for work again in another 3-5 years. I had the vision to know that I would have an absolutely awesome retirement if I work past my minimum retirement age of 56, collect my pension & health insurance, and still retire early! My ultimate plan is age 57.5)
After that (about 9 months later) with a substantial amount of money left, I looked at what would improve my life that was more "luxurious". I bought a used vehicle that was 2 years old and low mileage. Since I am now "debt free" I started a car replacement/repair fund from a payroll withdrawal because that was the biggest thing that created debt for us in the first place. I also paid off about 25% of my mortgage in one lump sum, and got on a firm footing of prepaying my mortgage monthly to make it go away at a projected retirement age that I was comfortable with.
At that point I still had money left and it was a year later with less emotional attachment. I looked at what I should do with it and decided that rather than paying the mortgage off totally, I would invest in some vacation rental property to generate greater income for myself. (My entire 401(k) was already in stocks and I didn't want to risk putting all the inheritance there too...)
Two years later the "inheritance" is gone except for the Efund, but I am on a firm footing financially now that will benefit me the rest of my life. I am putting about 40% of income into retirement and savings vehicles and working that mortgage away as well. I have a paid off rental property that generates $1000+ dollars a month average profit and that will continue to provide me income into retirement (plus I can occasionally use it myself when it is not rented!) That was the hardest decision was whether to invest or do a mortgage payoff - I had to evaluate the value of the increased income for life against the time it would take to pay off the mortgage for where I live. Considering I might sell the house I live in anyway when I retire, I think that I made the right choice for me....
All in all, a step by step plan of what is most to least priority is the way to go. Then take your time doing what you need too. It doesn't hurt cash to sit into the bank for a while until you really decide what to do with it. (Everybody I work with said they would quit their job immediately, but they would have been broke and looking for work again in another 3-5 years. I had the vision to know that I would have an absolutely awesome retirement if I work past my minimum retirement age of 56, collect my pension & health insurance, and still retire early! My ultimate plan is age 57.5)
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I think you have done a great job of putting it to work for you.
