27 answers

JFF - What Would You Do with a Big Inheritance?

If you were left an inheritance, say like - $100,000, what would you do with it? Would you pay off your house if you can or your car note and other bills? Or save it? Or do some of both? If you were to save it, would you put it in a regular savings account or something else?

What I would love to do is find a house that meets my needs for said amount pay cash for it and sell the one that I have. But I worry about no longer having that cushion so to speak and the fact that it would lock us into that house (if we want to continue not having a house payment). So my thoughts are I would pay off some of my other debt (medical bills, credit cards, etc) and maybe refinance my vehicle and home. Then put the rest into savings. While $100,000 is good chunk of change it's not huge in today's standards.

So what would you do with it? Thanks!

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Featured Answers

My husband just received around that amount. He invested all of it.
BTW--there is no tax for us. The money was already taxed.

3 moms found this helpful

I have inherited a little more than that. My parents both gone and my husbands also. We own 2 houses outright with no mortgage.

That much money really isn't the end of worries.

2 moms found this helpful

If I had debt, I would pay all of that first. I would also plan to take at least some of it (maybe $5000 or so) and plan an awesome vacation or buy something amazing that I had always really, really wanted. I would probably save the rest.

If I was debt free, and wishing I had a bigger house, I would definitely look into buying a new home.

1 mom found this helpful

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My husband just received around that amount. He invested all of it.
BTW--there is no tax for us. The money was already taxed.

3 moms found this helpful

It would go towards my son's future college tuition, hands down. Sure I can give it all to charity, but they have alot of my money and time already so I wouldn't feel bad.

MAYBE a thousand or two would go towards front row seats if the Texans ever make it to their 1st Superbowl. And MAYBE a few hundred would be spent on front row seats for U2 and Adele...but that's it.

2 moms found this helpful

If you need your mortgage interest to lower your taxes, and if you don't have a very high interest rate, I would not pay off your house. Car note, yes, and other bills.

THEN, and this is important, put back the money that you are saving on the principle of these debts. That way you don't spend it on something else.

Refinancing your home after you pay off your other debts is more likely than when you have these other debts.

And of course, seek out tax advice from a professional tax accountant before you do ANYTHING.

Good luck,
D.

2 moms found this helpful

I have inherited a little more than that. My parents both gone and my husbands also. We own 2 houses outright with no mortgage.

That much money really isn't the end of worries.

2 moms found this helpful

$100,000 differs in value depending on where you live. Around here the average price of a house is $84,000. My house is owned free and clear but I think if I had that kind of money I would buy a new house.

1 mom found this helpful

It's tough to get an inheritance these days if the older family members are really elderly - we have both a mom and a MIL in nursing homes and that has used up all the money they had from their home sales & life savings. It's not wrong to use their own resources first - before using Medicaid/taxpayer money - but I'm just saying - with modern medicine keeping little old ladies alive for many more years there's usually not much left.

We are waiting for an inheritence now from my late aunt who had no children. There are many cousins so it's won't come to much more than $15K - and we have combined $40K in life insurance policies on my mom and MIL - so we will have some inheritences coming in over the next few years in all likelihood. but it won't do much other than pay off debt, put some more money towards college funds and if we're lucky, reface the kitchen cabinets and pay for new counters.

But it there was $100K coming I'd redo my kitchen - knock down the outside wall and go out at least 5 feet, and go on a European vacation with the family. That would be a once in a lifetime thing!

1 mom found this helpful

It's totally fantasy time because none of my relatives have that kind of money.
$100,000 would not be enough to pay off the mortgage - it's our only debt - and we just refinanced it.
We'd probably bank it for now.
When the housing market recovers just a little bit more, we'll sell our 1st house and the proceeds from that with that bit in the bank will pay the current mortgage off.
Then we'll be debt free and will continue saving up for retirement and our son's college.

1 mom found this helpful

Student loans. Want to hear the sad thing - it would take almost ALL THAT MONEY to pay for both my education and my husbands. :-(

Ahh well - I'd put whatever was left into savings and take the family on a nice vacation.

1 mom found this helpful

I think we would splurge for a nice vacation for the family and a separate one for us. The rest of the money would go toward our sons' education.

1 mom found this helpful

Bless some other people and do a little traveling!

1 mom found this helpful

Whose inheritance is it - yours or hubby's? That is who the money belongs to. They make that decision. As you say in today's standards that is not a lot of money and could be gone faster than you think. Will there be taxes to be paid on it? That's a reduction. Will you put some in a CD to protect you for a few years say five? That's a reduction.

If you two are willing to "share" the money, then you need to have a plan that will benefit some savings first and then pay on things like medical and credit cards. If you can pay off the car so you don't have to refinance it.

Then learn to live below your means.

These are just some thoughts I have about inheritance. I had one and my husband did get something out of it but not a lot. We do have a grandfather's clock that we proudly display in the livingroom.

My aunt once said that if you do get money you should purchase something of substance so that when the money is gone you have a memory of something good from it. But once it is gone it is gone never to get it back.

The other S.

1 mom found this helpful

Hide it from my husband who keeps the savings account eternally drained.... And save save save!

1 mom found this helpful

pay off the rest of my car, pay off my credit card go on a vacation (nothing crazy) and put the rest in the savings account

1 mom found this helpful

$100K after taxes won't be much....more like $60K after you pay the inheritance taxes...

I would buy a new car and donate some to charity....we don't have any credit card bills so $60K would take our mortgage down - but - not enough to make a difference.

I would also use a portion of it to get my house painted...minor improvements to the house that will make a big difference....

If you got an inheritance - CONGRATULATIONS!!!!

1 mom found this helpful

If I had debt, I would pay all of that first. I would also plan to take at least some of it (maybe $5000 or so) and plan an awesome vacation or buy something amazing that I had always really, really wanted. I would probably save the rest.

If I was debt free, and wishing I had a bigger house, I would definitely look into buying a new home.

1 mom found this helpful

I would pay off the existing mortgage if it is enough to do so. If you pay off your car note and other bills, you will eventually get another car note later and other bills later. I would think it would be nice to own my home w/o the worry of losing it should something unfortunate happen (ie: job loss). I would definitely NOT refinance...banks are in the business to make money and refinancing options only serve to benefit them in the end.

@ Amanda G ---Sure it won't be the end of worries, but who wouldn't find comfort knowing that if they lost their job they would still have a place to call home. I'd much rather have a place to sleep at night, than have a car to drive around in.

1 mom found this helpful

I would purchase a home that would outfit us, and make room for one more just in case. I would feel secure if I had a home that was paid for that we would not grow out of. I luckily have little to no debt so there are no credit cards to pay off, but some medical bills that could use some paying off. I would invest in a new car since mine is nearly 10yrs old now, a well maintained car can last as well as a well maintained car - so those would be my investments.

1 mom found this helpful

Pay the taxes on it, then use the rest as a cash cushion since I'm working PT while finishing a degree and will be paying student loans, etc. and don't know how long it will take to find a FT job.

Now, if you'd said $1M, that would be fun to consider...

1 mom found this helpful

I would use it to buy a new house. Right now we can't sell our condo without owing money. $100k would allow us to pay off the difference and have a downpayment on a new place.

1 mom found this helpful

Travel travel travel...

(Planned during available vacation time over the next 10-15 years.)

1 mom found this helpful

pay off all my credit cards. We have alot of debt. :( We pay a good chunk a month. It would stop the interest free-fall and free up that much money per month.

After that, splurge on a trip to Disney in the Spring or Fall. Not the summer. Been there, won't do that again.

1 mom found this helpful

I would put some to a newer truck about 14,000 is what we are looking at. then pay off a little debt. and then the rest would go to the purchase of a house.

1 mom found this helpful

We don't have any debt except for our mortgage, but we live outside of DC so $100k wouldn't put much of a dent in it. I'd probably use about $1k for splurging (maybe $500 for me, $500 for my husband). He'd probably buy golf clubs or something and I'd buy all the fun new clothes I'd love to have. I'd put the rest into my 2 girls' college funds. Might pay for a year of college for each of them, and THAT would be a relief!

1 mom found this helpful

student loans :(
Maybe not all of them, and like H&H I'm not sure it would pay them all off!
I'd put a bit more down on the house, just enough so we can stop paying PMI (we didn't have a down payment that was 20% of asking price so we have a few years til we get there).

I guess I would keep a few grand out for some awesome vacation. Or maybe enough to buy a boat :) It's nice to dream. Although maybe that's not a good dream because an inheritance means someone close to me died. Yikes.

1 mom found this helpful

Pay off the credit card debt and don't run up anymore! Then set aside enough for something you really need---a better house if you need one, but put some in an annuity for when you retire. You cannot believe how fast the years will pass and you will be facing your senior years with nothing but a little retirement (if you are fortunate to be working for a company that has a retirement) and Social Security (if it exists by then). With interest rates as low as they are now, and the prices of homes dropping like a rock, you should be able to find a good buy. When you sell your present home, put that equity into the new one. Your house payment shouldn't be very much more, and so far the interest is still tax deductible. An annuity will grow as the years roll by and then you and your husband won't have to hand out baskets at Walmart when you are 70 years old!

1 mom found this helpful

I would pay off my house and any and all bills (we don't have a lot of debt, but things like my daughter's braces, and an amount we owe on some furniture). That way, we free up our income to save.

1 mom found this helpful

$100,000 is not that much money in today's terms.

I would add the majority of it to our investment portfolio. There is not really much that I want or need so I'd bank it.

We don't carry debt but if we did, I would get out of debt no questions asked.

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