Reader Question: What To Do With A $100k Inheritance?


Okay, this is totally going to look planned considering last Friday’s hypothetical on winning $100,000, but I swear this is a real question and that our friend here did not win any magical genie requests :) In fact, she got the money through the opposite of a fun situation :(

Here’s her note below, followed by my own thoughts for her to marinate on and then hopefully yours as well! We’ll call her “joy” to hopefully liven up the situation more :)

Here’s her email below… Oh, and whatever you do, Joy, do not read this post here!!

J. Money! I’ve been a long time reader of your column but, well, have never commented. Finally thought I’d send in a question at least since your advice is always sound (and fun to read)!

It’s been a year since my dad’s passing, and our inheritance has finally cleared the estate. I’m looking at a cool $100k coming my way in the next month. Looking at the best way to use that, given my current life situation.

Here are the good details: I’m 36, married, and we each bring in $80k/year salary though we don’t comingle our income for the most part. I have no student loans (paid off last year!), approx. $200k in my 401(k) that I contribute 5% to with a company match, and $20k in a ROTH which I’ve contributed $2k to this year so far. I also have about $12k in personal savings. (Recently used a chunk for a down payment on a car)

Now for the debt: I do have quite a bit of credit card debt to the tune of $20k (most of it is 0% APR CCs through mid 2018), a personal loan of $26k (10% APR), a car loan of $6500 (4% APR). I also have a townhouse rental property where thankfully the rent covers the mortgage payment, and we each pay $800/mo towards the mortgage for the condo we live in.

The big life event that’s making this a tougher planning process: We’re expecting our first kid in 5 months! We currently have $6k in a “Baby Savings Fund” (separate from personal savings) with an auto savings deposit of $300/mo. Full time daycare runs around of $1900/month for the area. We’ll want set up a 529 for the kiddo, but not sure how much to put in each month. But otherwise, not really sure what to do to prepare for the kid!

What I want to do is: 1) pad my savings to $35k (~7 mo living expenses), 2) fully fund my Roth, 3) pay off the personal loan and car loan, 4) put $6k into a townhouse emergency fund (3 months mortgage). Should I wait on my credit card debt since most of it is on 0% APR til next year so I get a little interest (free $ is free $ right?) on what’s left of inheritance? If I pay 100% of my debt (besides mortgage), that’ll free up $1700/mo. That leaves quite a bit leftover, but with the baby coming I don’t want to squander it!

One more side note – my spouse is on a work trip that will bring in an extra $8k in the next month. He’ll use that to pad savings, too, and I want to make sure we both put $$ aside for the kiddo. He has no student loans, car loan, or CC debt.

What to do what to do? Thanks in advance!

PS: I did read an older inheritance post you did where you talked about goals… thought I’d add some of mine. My biggest driver is : I’d been unemployed for a year before,  which decimated my savings. I got help from family to pay my mortgage a couple months. That’s where half my debt came from too. I never ever want to go back! And now with the kiddo coming, I want to set him/her up for not stressing about money too. My husband has always been frugal so he’s totally on board.

Oh the possibilities! What a great position to be in! (Minus the reasons behind the money, of course)

I love that she threw in the PS there at the end too because one of the most important things with this stuff is to KNOW YOURSELF and *why* you’re drawn to certain actions over others, even if they look strange from the outside. There’s nothing wrong with making moves this way so long as they don’t F you or your finances over, so anytime you’re super excited to go one route over another I say go for it! Who cares if others would do it differently, they’re not living your life?

*Awkward transition to others giving their opinion now…*

Okay, so what would I do in her shoes? Well, pretty much everything she already stated above with the addition of one minor/major? change. I feel like she already *knows* deep down what she wants to do – which is great! She’s been thinking hard! – but we’ll see if our additional advice sways her one way or the other :) I’ll go first, then it’s your turn!

Here’s what I’d do with the money…

#1. Hold onto the $100k cash for 2-3 months and let it all soak in!

It’s one thing to *know* the money’s coming, but a whole other to let it simmer in your bank account and feel SUPER CONFIDENT knowing you can pretty much do anything you want before unloading it… This prevents you from doing anything stupid with it too, especially in the case of winning the lottery!

#2. Once the anxiousness kicks in, start knocking off your Want List

Again, our friend here has a great sense of herself and pretty much already knows what she wants to do with most of it, and since they all improve her net worth and general comfortableness, I’m 100% for it. The real question is what to do with the money that’s *leftover*. Which I’m pretty sure we all here know what that answer should be ;)

Here’s her want list again, along w/ the amounts it’ll take to release the kragle:

  • Padding her savings to $35,000 (+$23,000)
  • Fully funding her Roth IRA (+$3,500)
  • Paying off both her personal loan AND car loan ($26,000 + $6,500 = $32,500)
  • Putting $6,000 into her “townhouse emergency fund”

That’s a total of $65,000 going to a new home, leaving her with $35,000 left…


The extra savings in cash may feel good, but I’m willing to bet that being completely debt-free would feel even better over time – especially with the new baby on board. The Want List already took care of a bulk of the wanted savings, so why not shovel $20,000 right into the debt and have the best of both worlds? If the credit cards aren’t paid off now – with “free” money mind you – when will they be?

And here’s some other good motivation that she already alluded to: it would help free up $1,700/mo of cash flow too! Which can then be directed to a number of future goals as well! And considering NONE of this even accounts for any contributions by her partner throughout time – which I’m sure will be a lot since he’s so frugal and also makes a decent income – their family is definitely sitting pretty.

#4. Dump a chunk into the 529 account

If all the above wasn’t awesome enough, she still has $15,000 to play with! And since the 529 is the only thing we haven’t touched on yet, my vote would be to send $10,000 into it in one fell swoop to get that compounding going. It would serve her better over time than breaking it into smaller monthly deposits too (again cuz of compounding, despite dollar cost averaging), and from there you’ve hit all the main goals on the list. Woo!

But that still leaves us her with $5,000 left…

#5. Do something *special* for you or your family

As responsible as all the financial goals are, which now make up for 95% of the inheritance, I’d stash the remaining $5,000 aside to do something really rewarding or special for either yourself or your family in the near future. I’m sure your father would love to be able to contribute towards that, especially if it’s something you wouldn’t naturally do for yourself because you’re so “responsible!” And even better if it’s towards something that would also honor your dad’s life as well :)

Maybe a trip to somewhere he found special or always wanted to go? Or maybe starting or enhancing a hobby/passion you two shared together? Or what about going on a shopping spree that he’d look down and laugh at but approve of you finally letting loose?? Haha, I dunno…

Either way, keeping a little money aside to be able to “splurge” a little can def. do a person good. ESPECIALLY when a new baby is on the horizon and life will get about 10x more “interesting” :) But what a blessing indeed… One family member leaves, and another one comes in. The circle of life, baby.

#6. Allocate the new $1,700 earned back via cash flow towards whatever needs strengthening!

This is the cherry on top of it all, and the area you can feel even more free to do what you please in order to fill in the remaining cracks you see. Even if it seems like overkill to others (again – it’s your life! Do what makes you feel the best! Though may I recommend maybe upping your 401(k) contributions more for an extra boost? ;))

And here’s the best part of this cash flow cherry: It not only grants you $1,700 the first month, but it continues forward sending you $1,700 the second month and $1,700 the third month and the fourth month and on and on into eternity or at least until baby #2 and #3 comes ;)

It’s the gift that keeps on giving! Which means getting to make these nerdy decisions every single month as you continue to fortify your finances. A wonderful dream for any father’s daughter.

So those are my thoughts…

You’ve got plenty of money to last for years now, and you’ve got a loving husband who will also be helping you out across the board too. You’re going to be fine no matter which route you go, and all that’s left now is to love the crap out of your baby :) You can never love them too much! One of the best pieces of advice I got myself through this journey.

I now open it up to you, readers! What do you think of these plans here? What would YOU advise if you got this $100k and were in her shoes?

Share all your smart words below, and then pat yourself on the back for being productive this morning! It’s much better than the 100 other things we’re about to do when we log off here to distract us from the work that’s needing to get done today ;)

God bless, all.

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  1. Ember @ An Intentional Lifestyle September 11, 2017 at 6:28 AM

    I’m not sure J money left much room for other good ideas. But seriously, Joy obviously has thought hard about this. And knows what she wants.

    I fully agree that paying off all the debt is the way to go, especially with the baby coming. You are going to want to be able to enjoy that baby, not be worried about money in that time. I’ve had 3 kids, and trust me when I say you will not have the energy to think about all that. The extra income you would be getting monthly from that margin after debt payoff would give you the freedom to build up and pad all the areas of your life that you feel need it.

    I’m so sorry for your loss, but it’s amazing that your dad prepared for his family in this way. And congrats on the baby!!

  2. Mrs. Adventure Rich September 11, 2017 at 7:11 AM

    Great suggestions, J! During the 2-3 month “soak in” period, I would suggest putting the money in a high interest savings account (ideally not the same account as your primary banking/checking). This will help to earn a little interest during the wait period plus it gives an added layer of separation so Joy is not tempted to dig into it for normal expenses. Bank Rate and Magnify Money are both good resources for finding a savings account like this.

    Other than that, I like the plan!

    I am sorry to hear of the loss of your father, Joy, but I think it is amazing that he was able to give you such a great gift. And congratulations on the baby :)

    1. J. Money September 11, 2017 at 9:25 AM

      I do like the idea of the money being separated out, but maybe at you current bank vs new one so you can at least *see it* when you log in every time and really feel its impact? Half the fun of holding tight w/ the money is just to be able to see it’s there and ready to be used for good :)

  3. Chadnudj September 11, 2017 at 7:11 AM

    Can I tweak that second to last $5000 slightly, JMoney?

    Use that to create an estate plan, including things like term life insurance/disability insurance on both parents, etc. Now that you will soon have a kid, you need a plan in case anything happens to you or your spouse — who will raise your child, how they will receive any money/when, what happens if you become disabled and can’t work, etc.

    It’s really boring and all, but it does give you tremendous peace of mind to know that your little one is provided for in case the worst happens. And $5k should entirely pay for (or go a long ways towards paying for) an estate plan set up by a reputable attorney.

    1. J. Money September 11, 2017 at 9:26 AM

      That’s a good idea :) You could probably get away with spending $1,000-$2,000 too and just doing a couple of the “biggies” vs the whole shebang.

  4. Krystal @ Simple Finance Mom September 11, 2017 at 7:27 AM

    I’m so sorry to hear about your father’s passing. It is never fun to lose a parent.

    Can I just say I was waiting for advice on investing a portion of it?! That is probably the one thing I would change. Definitely pay off all of your debt, build savings, max out your Roth, and start that 529. I love all of those ideas.

    But if it were me, I would probably invest the last 5,000 so compound interest can do it’s thang. Then with the 1,700 extra I would plan something fun to splurge. It’s important to splurge every once in a while!! I would then make a plan for those extra bucks each month so we don’t squander them all.

    Best of luck to you and yours! And congrats on your new little one!!

    1. J. Money September 11, 2017 at 9:29 AM

      I left out investing as much because it seemed the other avenues made her feel more comfortable :) Though you certainly can’t go wrong throwing more there and less to savings!

  5. Lance @ My Strategic Dollar September 11, 2017 at 7:45 AM

    Sounds like both Joy and J Money have provided great ideas. I think the most important move is to pay off your debt. Once 2018 comes around and your 0% interest kicks in, you’ll be thankful you did. I’d personally put less in savings. I would figure out what the minimum monthly bills you can have and work to get them down before the baby comes. I would then follow what you mentioned above, except with the leftover I would refinance your rental property to a point that you have better cash flow. It’s possible you could earn a few hundred extra bucks a month by doing that and that’s a longer potential income stream than some of the other options. Then you’d have maybe $2000 extra a month instead of $1700 and you can allocate that into areas that need it.

    1. J. Money September 11, 2017 at 9:50 AM

      Good call on looking into refinancing!

      That’s a nice tip for *anyone* here, regardless of an inheritance :)

  6. Michelle at Savings and Sangria September 11, 2017 at 7:55 AM

    Wow, $100K sounds like a ton of money, but doesn’t seem to go terribly far when you start allocating it, does it?

    I completely agree with J. Money’s recommendations. Solid plan! The increased added cash flow from paying off that debt will be a huge benefit when the baby arrives.

    And I love the idea of doing something special for the family that will also celebrate her father’s life and honor his memory.

  7. Austin September 11, 2017 at 7:57 AM

    I agree 110%. I would make sure the debt is blasted and never comes back. Thanks for sharing!

  8. Penny September 11, 2017 at 7:58 AM

    I agree with waiting. My son was just born and I finally moved my (very small) inheritance from my grandmother to an account for him. I probably waited too long to spend the money, but now that I used it for what I did, I know she wouldn’t have wanted it any other way. No matter how you spend it, I’d say to do something to honor him (it sounds like you’ve done this very well with your plan!). So very sorry for your loss and good luck to you with the new arrival.

  9. Mr. Tako September 11, 2017 at 8:12 AM

    Definitely pay down the credit card debt first! Since she’s had some employment difficulties in the past I would think about building up larger cash reserves for the future.

    You never know when job loss is going to occur. Might as well prepare for it if your work is a little unstable.

  10. Lily @ The Frugal Gene September 11, 2017 at 8:31 AM

    The plan sounds solid! If I have debt (consumer and personal) I wouldn’t invest it until they’re both paid off and I would direct all the funds to prepping for the baby + property. The only thing I would change is to half the soak period if she’s prone to overthinking like my husband. Or gets itchy fingers like I do..too much time without a plan makes me do crazy blogging.

    1. J. Money September 11, 2017 at 9:52 AM

      Haha, good point… 3 months could be wayyyy too long for the anxious :)

  11. Paul September 11, 2017 at 8:36 AM

    #1. Pay off personal loan immediately.
    #2. Wait till April on CC debt then pay off
    #3. Max IRA

    This should leave you about 50K:
    #4. Put $25K in 529 for child…it will be around $100K most likely by the time you need it.
    #5. Put $25K in an investment account. Vanguard, Fidelity or robo advisors like wealthfront…etc…

    Note: Don’t worry about the car, it depreciates (unless you have the same vehicles as J$, lol). All your other savings and emergency fund goals are met by the taxable investment account #5. If you aren’t big on college savings then just put 50k in the investment account.

  12. Ms. Frugal Asian Finance September 11, 2017 at 8:39 AM

    I love tip #1! 100k is not a small amount of money. It can be overwhelming to suddenly receive so much money, which can easily prompt us to make decisions we might regret later. I totally agree that we should up the savings and investment accounts. It’s 100k now, but it can be $1M later.

    I’m sorry to hear about the loss. I hope you and your family will get through this tough time with support and encouragement from family and friends.

  13. Jamie Jeffers September 11, 2017 at 8:49 AM

    J Money, you rock. I always feel encouraged when I read your advice.

    Joy, I’m so sorry about your loss, but congrats on the baby! We have 5, and it is nuts… but so much fun! :)

    As someone in the noose of credit card debt, I say pay those suckers off! I know you’re in 0% right now, but heaven only knows what will happen over the next few months. I don’t trust the variable APR, and if something happened to the money in the meantime you could be facing some steep interest rates next year.

    If you follow the plan here, you’ll be in a sweet spot when baby comes. Good luck!

    1. J. Money September 11, 2017 at 9:54 AM

      I still don’t know how you do it, Jamie :) My wife and I are finally starting to talk about going for a third but it’s just so easy and comfortable with two! Man on man defense! Haha…

      1. Miriam September 12, 2017 at 4:57 PM

        With three you learn how to juggle. (Not literally, at least not the littles!!) But once you have the kids outnumbering the number of hands/parents bit down, 4 isn’t so much harder than 3, and 5 isn’t so much harder than 5, etc. Also, unless you have multiples, the older ones start to be able to help, at least a little. And it gets way easier once some of them are old enough to leave home alone, and still easier once you have in house babysitters.

        Unless you’re totally crazy like me and not only have a dozen or so kids, but send them all to private school…

        Anyway, I also think your money advice is spot on. Sorry for your lost, Joy, and hope everything goes well with your expected little one. Babies are the best!

        1. J. Money September 13, 2017 at 5:27 AM

          You are an angel :)

  14. Dave September 11, 2017 at 8:54 AM

    It depends on the type of person you are. If you are already are a saver, don’t have debt, and are planning on reaching financial independence soon, I would say take 10% of it and spend it on something you really want. Take the other 90% and invest it into your current asset allocation. If you have debt, pay it off. If any of the money is left, start an emergency fund and Roth IRA.

  15. Steveark September 11, 2017 at 9:24 AM

    I inherited just under 7 figures three years ago. I was already FI but it gave me the confidence to walk away from my lucrative corporate career that I no longer enjoyed. We spent about $15k on an off road side by side vehicle and put the rest into our investment portfolio. I agree with being smart with the vast majority of windfall money but making sure to take a small piece of it to just have fun with. I know my dad would have agreed. As always, I couldn’t agree more with your excellent advice!

    1. J. Money September 11, 2017 at 9:56 AM

      Oh wow – you must inherited your parents’ smarts as well when it came to money!

  16. Mrs. Picky Pincher September 11, 2017 at 9:32 AM

    Sorry to hear about your dad’s passing, but how wonderful of him to include your needs in his estate. I’d just add that you can see about setting up an HSA or FSA account to pay out your daycare expenses; it’ll decrease your taxable earnings since daycare costs are necessary to keep you at work anyway!

    1. J. Money September 11, 2017 at 9:58 AM

      Good one! I always forget about HSAs cuz I don’t have access to one… Though we did take up some option with my wife’s employer (federal government) to shave daycare costs off which helped a lot and is similar. Good thing to research for sure.

  17. ZJ Thorne September 11, 2017 at 9:46 AM

    I’m sorry for your loss, but I am glad that your father was able to continue adding good into your world even as he left it. Holding on to the money and doing nothing for a few months is what I’d suggest, too. Too many decisions are made rashly. Then I would most likely knock out all of the debt and pad my EF since babies come with many unexpected expenses – including parents suddenly shifting and now desiring working less for a time period.

  18. Dora September 11, 2017 at 10:00 AM

    She should work with a fee-only Certified Financial Planner to ensure that all the bases are covered. That means insurance needs and retirement funding with appropriate investment risk.

  19. Natalie September 11, 2017 at 10:27 AM

    Hey this is a timely post (for me) I’m waiting on an inheritance from my father’s estate although that will probably be $8000 and my student loans are currently a thorn in my side

    1. J. Money September 11, 2017 at 10:30 AM

      Sorry to hear :( on both accounts.

  20. Mindy Jensen September 11, 2017 at 10:35 AM

    I love real estate. (I didn’t see the part of the country where Joy lives…) Investing in an income producing rental property would generate money every month that could go into the 529. I would definitely pay off the 10% and 4% loan and any CC debt with a higher-than-0% interest rate, and take $50k as a down payment on a rental property.

    Take the rental income after expenses and throw it at the CC debt, then into the 529 plan for the kiddo.

    1. J. Money September 11, 2017 at 1:50 PM

      I admire all y’all who invest in rental properties – I just can’t bring myself to do it :)

  21. Dads Dollars Debts September 11, 2017 at 10:45 AM

    Agreed. Do the things you laid out (well thought at that too) and pay off the credit card debt. I paid off a number of 0% loans early and never ever regretted it. How nice would it be for you and your husband both to be debt free except for the mortgages. Then that debt can be shared amongst the 2 of you. Plus, hypothetically if you lost your job again, you have no debt and a few months of mortgage saved up.

    $1700 in cash flow is a nice chunk of change. You can use that over time to save instead of the lump sum payment. I do agree with J money though, get that 529 started if it is a priority. We have $15k in our 2 year olds name already and it makes me happy to know it will compound over 16 more years. The goal is a $100k by the time he is 10.

  22. Katie September 11, 2017 at 10:57 AM

    I like tip #1 and think that with the baby about 5 months away it may make sense to wait for some of these items even longer. I would pay off the personal loan and car right away, but wait on the CCs since they are 0% interest for now. I would hold off on the rest because with baby on the way, you just never know what’s to come. Between the remainder of pregnancy, labor, and delivery, there are a number of health concerns that could come up. What if you have to go on bed rest and can’t work for a few months? What if the baby needs to be in the NICU for an extended time? Maybe I’m a bit pessimistic, or overly conservative, but I would hold off on putting funds in any accounts that would cause you to lose access to them now (i.e. Roth IRA & 529), until after the baby is here and safe. Then pay off the CCs, open a 529 and of course enjoy some of the money as a family of 3.

    Btw, I have a 7 month old, and this is probably what I would have done a year ago :)

    1. J. Money September 11, 2017 at 1:53 PM

      Ooh congrats, Katie! Exciting new world for you :)

  23. Joe September 11, 2017 at 11:54 AM

    J’s advice is pretty much perfect. That’s why he’s a famous personal finance blogger. Heh heh ..
    I wouldn’t worry too much about the baby. You’ll have some added expenses, but it shouldn’t be too much. It’ll work out.

  24. Done by Forty September 11, 2017 at 1:12 PM

    I have a post coming up next week on this sort of analysis, but my short answer is that for most people, their tax-advantaged accounts like 401k, HSA, and Traditional IRA are usually the best things to max first.

  25. Becky September 11, 2017 at 1:29 PM

    Two things I love about this post:

    First, she already is planning to not blow the money and to use it responsibly, she just isn’t sure which route would be *most* responsible. Go “Joy”!!

    Second, I love that she recognized that paying off that debt would give her $1700 more cash flow each month. I think as long as she uses that cash flow to attach more goals, she will be on the right track.

    I know the money can never replace your father, but I’m sure it gave him peace knowing he was able to bless his daughter in this way when he was setting up his will, sort of in the same way that “Joy” is hoping to give her child a life without money stress.

    1. J. Money September 11, 2017 at 1:56 PM

      I second that :) What a blessing to be able to help your kids out!

  26. DaveC September 11, 2017 at 2:26 PM

    I’m not a financial expert and don’t play one on TV. A caveat I heard from another financial planner was; what if you’re diligently socking away $$ into the 529 and then your child that you thought was college bound announces, “Nah, I’m gonna travel the world and discover myself/anything BUT go to college.” There are fees and penalties involved in getting the money back if it’s not used for college. Just an FYI. Thanks for the great content, sir.

    1. J. Money September 12, 2017 at 1:21 PM

      Yup, there’s fees and such involved for sure. Though you can also use the $$$ for other kids in your family and even yourself if you go back to school. But it’s def. set up for school. Another route could be just banking the money or investing it elsewhere too of course, but there are pros and cons to that just the same :)

  27. Jeff @ MaximumCents September 11, 2017 at 6:17 PM

    I agree with some of the other comments. Pay off all debt other than the 0% interest rates. Next year pay off the credit cards. Allocate $1,000 extra money toward your monthly mortgage payments for a year. Go on a nice vacation. Finally invest the remainder into a brokerage account.

  28. Actuaryonfire September 11, 2017 at 9:55 PM

    Very nicely laid out!
    With the arrival of a new family member make sure to leave a couple hundred to get wills drawn up. I know it’s boring but once it’s done, it’s done.

  29. Libby September 12, 2017 at 12:59 PM

    I’m coming from the old-school, New England WASP family money perspective:

    In my family for generations (and I’m talking about family company going back to mid 1800’s, trusts still in place based on handwritten wills, etc.), inheritance is to be preserved and passed down to the next generation. Live it up with the investment income but make sure the principal is preserved and keeps up with inflation so it can be passed down intact to the next generation.

    This means no debt payment, no going wild and buying anything the first year, no funding Roths or IRA, etc.

    Your daily life is to be funded from your own-generate salary.

    It means investing the entire $100K and using the investment income ONLY for the rest of your life.

    Harsh and a different perspective than other posters, but this is how money lasts in old-school families.

    And finally – I am sorry that you lost your father. Money is never a replacement for a loving parent.

    1. J. Money September 12, 2017 at 1:29 PM

      How fascinating! We talk a lot about that concept in the blogging world when it comes to *retiring* or “foundations” and what not, but I’ve never seen that with inheritances before… I really like that! Totally adding this comment to my “ideas” folder to marinate more on, thank you :)

      1. Libby September 12, 2017 at 9:59 PM

        I think most parents want their children to be healthy, happy, standing-on-their-own-two-feet, productive citizens.

        If a kid thinks they are going to inherit a “boatload” of money as my teen son would say, it is tempting to kick-back and wait. However, if you know that you have to pay your own way, it is much more motivating.

        Combine this with the fact that the average age for expiring in my family seems to be the very late 80’s, all wild oats have been sown before someone inherits money.

        My ancestors are probably rolling in their graves at the fact that I am publicly discussing money! It is uncouth and “just not done!”

        1. J. Money September 13, 2017 at 5:29 AM

          HAH! It’s a new era, baby :)

  30. Dino September 12, 2017 at 6:35 PM

    I like your idea J. Money of sitting on it for a couple of months It will give her time for several new realities to sink it (I know it has been some time, but the when the money comes, it will probably come in a new wave). The first of course is the loss, and the generational impact of that loss. It saddens me especially hearing of your little one coming. The second, would be musing on the values that your dad had, and seeing how yours and his could converge together financially, in terms of how to re-purpose those monies. Lastly, since the gift came through a deep and lasting loss, perhaps using that “leftover” $5000 to serve someone who recently experienced a deep and lasting loss might just bring a sweet and lasting moment for you. Receiving a gift to be a gift.

    1. J. Money September 13, 2017 at 5:28 AM

      A very loving idea, Dino :)

  31. Jason September 13, 2017 at 7:57 AM

    I might add this nugget. I might wait until the baby is born to actually spend any of the money. Once the baby is born, everyone is fine, etc. then taking that money, paying off the car, personal loan, etc shouldn’t take more than 1/2 hour of moving the money around. Then you can the security of knowing everything is truly ok and the like. It might be to the point that one of them could even stay home and not have to work or only work part-time. I mean almost 24k for daycare is a huge sum of money. If one person could work remotely you could save yourself tons of money.

  32. Adam September 13, 2017 at 11:45 AM

    After receiving $14k from my grandma’s estate a year ago, I decided to live off that and direct 100% of each paycheck to my 401k for the next few months… which made me realize I can max the thing out and still live reasonably and frugally off my remaining earnings, which then led my higher-earning wife to realize the same.

    So we’ve gone from ~$15k pretax savings each year to about $40k after employer matching (or up to $51k if it’s worth IRAing some dollars to offset taxes). Grandma ended up leaving us a much bigger gift than she understood: FIRE is neatly lined up in our sights about a dozen years out, happily coincidental with paying off the 15-year mortgage.

    1. J. Money September 14, 2017 at 5:42 PM

      Wowwwww good for you!!! She would be so happy to hear!!

  33. Lee September 13, 2017 at 11:57 AM

    This felt a lot like my situation back in February when my mom passed away. I inherited some money but also farm land and shares of a farming corporation. So, I went from making 26k a year to a darn bit more depending on the crop season. I also spoke to J Money about it and took his recommendation to sit on it for a while, which I did. My debts were already paid off, we had done the Dave Ramsey debt snowball a while back so credit cards and cars were paid off. I inherited a house that is paid for, so we could wait. Oh! My wife does have 30k in student loans which is our only debt. So, I’m definitely a fan of the get out of debt and don’t go back club. Use those freed up funds to buffer your accounts and enjoy less stress. I’m hoping that I can one day jump on the 4% FI train.

    So, I invested it to grow it to help with retirement and so one day I can pass it on to my kids. Life insurance policies were found and those now fund an emergency fund.

    I love the baby advice, we are planning for one and a lot of this I have written down and plan to make sure we execute when the time comes around. J should do an article about planning for kids and daycare some day, I’d love to read it.

    1. J. Money September 14, 2017 at 5:45 PM

      Hey man! Glad to hear the advice helped!

      I’d totally take you up on that planning/daycare article, however not having mastered either of those it’s probably best I do not :) I will say though that it’s amazing what you can get used to once kids come into the picture. Humans are pretty damn adaptable, so plan or no plan you will get through it all just fine. The biggest worry is *before* they’re born and praying they come out happy and healthy!! Most of which are outside of your control :(

  34. Peggey September 14, 2017 at 6:19 PM

    Have the inheritance taxes been covered already? I feel like I’m asking a stupid question, but… it’s the “WTH” taxes that mess me up every time.

    1. J. Money September 19, 2017 at 12:08 PM

      Good question! I assumed that was covered w/ the estate people figuring out her $$$ stuff, but I never asked so I could be wrong. From the little I know and have researched, a lot of inheritance stuff is tax-free, but there are certainly pockets where tax implications are HUGE, so as with everything with important $$$$ stuff, it’s always good to do your own research and ask your accountant/financial planner as well if you have one :) Better to be surprised now vs later for sure!

  35. Thea September 17, 2017 at 8:03 PM

    Great advice and lots of perspectives. Quick hopefully not dumb question for Lee’s post – what do you mean by “4% FI” train? Thanks

    1. J. Money September 19, 2017 at 12:12 PM

      The 4% refers to the trinity study that states you can comfortably live off 4% of your investments, more or less, while in retirement. Or 25x your yearly expenses. It’s a quick rule of thumb when starting to calculate “your number” for when you can retire safely :)

      Here are some good articles on it from bloggers in our space who live and breathe this stuff (whereas I’m a FIRE blogger in training! Haha…)

  36. James September 25, 2017 at 10:14 AM

    The alarm bells were ringing at the town house situation as well as the debt. Glad you sensibly suggested for her to create an emergency fund and get rid of the debt! Good work

  37. Jolie May 24, 2018 at 2:23 PM

    I received 102k (after taxes) about 2 years ago – here is what I did (late 40s) …

    I only had 15k in retirement .. so I added in 85k giving me a NET retirement savings balance of 100k which I put in moderate risk accounts for long-term growth (not looking to make a quick buck thanks … slow and steady with me).

    I took 10 k and divided it up over a couple years to travel and see family. I
    blew 5k on whatever I wanted.

    I totally loved how I spent the inheritance and to be able to say I all it all with me a couple years later .. I chose wisely. It will reshape my retirement outlook as I have nearly 2 decades for it to grow.

    That is what I chose to do with it.

    1. J. Money May 24, 2018 at 3:25 PM

      Love it – well done :)