Unexpected Windfall

[Teacher Terry]

I am lucky enough to be a recipient of 20k left to me by a good friend that I have taken care of for the past year. I am really shocked but happy how much he appreciated me. His brother who is the beneficiary for the rest of the estate said that I certainly deserve it. So I have decided that I will use this money for something special.

I have thought about buying a new or slightly used Honda Civic or Toyota Corolla. At the present I have a 14 year old Toyota Corolla with only 67k miles on it. My original plan was to drive it until it died and then replace it with a car for 10k. I am 68 and a 90 year old friend drove a old car until it was toast at 85. Then because she was still driving she bought a new one. She wishes she had bought it sooner because realistically how much longer will she be driving. Although she is a good driver still.

I could also take 4 nice trips to Europe with that money. I have a pension and SS that covers all my expenses with a yearly cola. I also have a small savings for emergencies. If I don’t use it for trips I will be taking one more European trip in 2 years. The other option is to save it of course. I own a condo that has a huge reserves so no special assessments in the future and the only thing I am responsible for is the appliances as everything else is on a boiler system. What would you do in this scenario?

 

[whatnot]

Aww love to hear that your friendship was appreciated .
Well deserved as I know you have had a rough year or two.
I say take a trip as your Ireland trip was disrupted (if I remember correctly).

 

[aaronc879]

I would buy the new car. Enjoy

 

[Souschef]

Dear TT,
I am not sure of your age, but for us, we would take the trips while we were still able. DW was 63 when we started traveling. Now, 15 years later, we are done.

 

[Gotadimple]

Things or memories... You can travel overseas or you can travel in a newer car - both make memories. I know that doesn't help the decision, so it comes down to what do you want to do more?

 

[Teacher Terry]

Aww love to hear that your friendship was appreciated .
Well deserved as I know you have had a rough year or two.
I say take a trip as your Ireland trip was disrupted (if I remember correctly).

My Ireland trip was ruined by Covid. I am going to France in 2024 with a friend. However, that’s my last European trip if I buy the car. You have a good memory). To put it mildly the past 2 years have sucked.

 

[Teacher Terry]

Dear TT,
I am not sure of your age, but for us, we would take the trips while we were still able. DW was 63 when we started traveling. Now, 15 years later, we are done.

I am 68. Part of the dilemma is that I can’t have both the trips and the car. If I take the trips I will be driving old cars forever. But if I buy the car only one more trip.

 

[Sunset]

I would wait on buying the car, the prices are still extremely high compared to pre-covid years. Of course check for yourself on new car pricing, and see what carmax would pay for your car.

In the meantime, I'd buy short term treasuries with the money planning for it to be available when you want to use it, regardless of whether it's used for trip(s) or a car.

 

[Irishgirlyc58]

Can you split the difference?
2 trips to Europe and what’s left for a car?
I personally hate car trouble and typically drive newer cars.

 

[Ronstar]

I would take the trip. That Toyota will last the rest of your driving years.

 

[Kork13]

Your 14y/o car only has 67k miles on it. Is the car in good shape? Have you had any problems with it? It doesn't sound like your car is a problem at all, you just want something newer.... Not even anything luxurious, just a Civic/Corolla... So my bet is that you'd be fine with keeping your current car for a few more years.

Personally, I greatly dislike either/or choices when "both" is a realistic option.

You estimate $5k per trip. So maybe set aside $10k for trips over the next year or two, and reserve the rest for a future car replacement. Look at where you can trim your current budget, and save another $150-$200/mo toward the car. After a few years, you'd be able to get the new car, while still having been able to enjoy some of that money.

 

[HarveyS]

Take a trip or trips. Why limit yourself to Europe? Have you been to Africa or Asia. How about Alaska, or South America? Lots of options!

 

[Teacher Terry]

Your 14y/o car only has 67k miles on it. Is the car in good shape? Have you had any problems with it? It doesn't sound like your car is a problem at all, you just want something newer.... Not even anything luxurious, just a Civic/Corolla... So my bet is that you'd be fine with keeping your current car for a few more years.

Personally, I greatly dislike either/or choices when "both" is a realistic option.

You estimate $5k per trip. So maybe set aside $10k for trips over the next year or two, and reserve the rest for a future car replacement. Look at where you can trim your current budget, and save another $150-$200/mo toward the car. After a few years, you'd be able to get the new car, while still having been able to enjoy some of that money.

I haven’t had any problems with my car at all. I have cut all discretionary expenses so I have nowhere else to cut. I originally did this to free up more money for savings but due to inflation it just kept me even. Getting divorce 2 years ago cut my income in half. That allows me to save 150/month for dentals every 2 years for my 2 dogs. Luckily I have pet insurance for any big dog expenses. I don’t intend to spend any of it for at least a year so will put 10k in another I bond.

 

[Teacher Terry]

Take a trip or trips. Why limit yourself to Europe? Have you been to Africa or Asia. How about Alaska, or South America? Lots of options!

I have actually been to Alaska and Thailand. I hate heat and that trip was the least enjoyable. I don’t want to go to Africa or see anymore of Asia. 2 of my 3 kids are world travelers so have seen their pictures and heard their experiences. They actually all liked Asia but not me. My son is living in Vietnam teaching but the air quality in that part of the world is not good and I have asthma.

 

[Sojourner]

I would wait on buying the car, the prices are still extremely high compared to pre-covid years. Of course check for yourself on new car pricing, and see what carmax would pay for your car.

In the meantime, I'd buy short term treasuries with the money planning for it to be available when you want to use it, regardless of whether it's used for trip(s) or a car.

+1

Ultimately, IMHO, life is all about experiences. You only have so many opportunities to see and do exciting, extraordinary. soul-enriching things. A car is just a tool (one of many) that allows you to go do those things. Take the trip(s) while you still can and soak in every minute of the experience.

 

[street]

What a nice gift!!

 

[ivinsfan]

Can you just put the money in a CD or something until you decide how to proceed?



You won't be traveling in 23 , in your shoes I might just defer deciding until after I went to France...see how much you enjoy that trip and if it leaves your hungry for more travel.


Travel is getting pretty expensive at this point. It doesn't seem as though you drive your car much so another couple years with it should be fine.

 

[Teacher Terry]

Ivansfan, I put 4K/miles a year on my car. I have owned it 6 years. I went to Ireland in June and while fun the travel on the plane was exhausting. I am putting 10k in a IBond. If I decide to keep for trips I might take one by myself in 2023. My friend is going on a trip to Alaska with her husband so that’s why we are going in 2 years.

 

[Souschef]

I just sent you a PM.

 

[Teacher Terry]

Thanks Souschef!

 

[Accidental Retiree]

I am lucky enough to be a recipient of 20k left to me by a good friend that I have taken care of for the past year. I am really shocked but happy how much he appreciated me. His brother who is the beneficiary for the rest of the estate said that I certainly deserve it. So I have decided that I will use this money for something special.

I have thought about buying a new or slightly used Honda Civic or Toyota Corolla. At the present I have a 14 year old Toyota Corolla with only 67k miles on it. My original plan was to drive it until it died and then replace it with a car for 10k. I am 68 and a 90 year old friend drove a old car until it was toast at 85. Then because she was still driving she bought a new one. She wishes she had bought it sooner because realistically how much longer will she be driving. Although she is a good driver still.

I could also take 4 nice trips to Europe with that money. I have a pension and SS that covers all my expenses with a yearly cola. I also have a small savings for emergencies. If I don’t use it for trips I will be taking one more European trip in 2 years. The other option is to save it of course. I own a condo that has a huge reserves so no special assessments in the future and the only thing I am responsible for is the appliances as everything else is on a boiler system. What would you do in this scenario?

Take care of that Toyota as well as you take care of your pups and it’ll last you a good long time. Save the $ for your trips.

 

[Chuckanut]

A reasonably well maintained Corolla at 68,000 miles is just entering its middle-age. I would not replace it unless the newer one had something you really wanted such as some of the new collision avoidance features.

I used to joke that my old Camry came with a free trip to Europe every year compared to the cost of replacing it with a new one. I saved over $350 dollars a year just on lower car tabs and insurance. It ran very well until some guy hit it in a parking lot and totaled it.

 

[MarieIG]

How nice of your friend to show his appreciation in such a thoughtful way.

Me, I would save half (via a US bond) to allow for the purchase of a car in a few years if you still want one. Seems that your current car is in good condition, so there is no rush there. I would evaluate how you feel about the trips starting next year, since you recently got back from Ireland. (I say in a year, because, if me, I would want to monitor world conditions closer in time, and space out my trips.)

 

[38Chevy454]

I agree that your car, assuming previous good and continuing good preventative maintenance, will last for many years without issues. Especially given only 4K/year miles.

It also sounds like longer trips are getting tougher to do, so now or never as the saying goes. Waiting too long may be a case where you don't make a trip.

A nicer car is something that you can enjoy each time you drive though. So I kind of like using $10K for a trip, and then saving the remaining $10K in a car fund for a future newer car (note newer could still be few years old, not necessarily brand new) purchase when you decide that is a priority. It doesn't have to be when your current car is significantly older. Just when you would like to upgrade. Nothing wrong with having a new car if that makes you happy and is in the budget. The $10K plus investment returns, along with older car value can be a nice sum of money toward the newer car.

 

[iloveyoga]

What a nice story of friendship! If you get the car, you will always think of your friend when you drive it.