Unexpected Money

[globetrotter]

I just received notice from a lawyer in charge of my aunt's will that I will be getting $20,000. I'm in total shock because I had not expected this at all. I also have no idea what I should do with this money after paying off our credit card ($1500). We have a car loan ($5000) and our house loan ($85000), but that is all fro debts. We have DH 401K plan for our savings. Any suggestions on how to use this money?

[Tree0164]

Hello,
That is a nice windfall to get.

I would pay off your credit card debt and the car.

You also need an emergency fund- you should be using DH 401k as that. Take atleast 6-8 months and put that away.

You could also take $5k and put that towards a new car fund so you don't have to have a huge car payment next time around.

Also enjoy some of the money, make take a nice weekend trip or buy a new toy. I am sure that your aunt would love for you to have some fun.

[globetrotter]

Good ideas. I have already decided that the credit card and car are going to be paid off. That still leave $13500. More suggestions are welcome.

[DivaJen]

DH and I inherited some money a few years back...also $20K. We invested $15K of it for DD's college and used the other $5K to help fund DH 's business. Nothing too glamorous there, but it provided us with some nice security.

[globetrotter]

I think that is the approach I'm going to take with this money. While I'm tempted to spend a part of it on a vacation, I think I will try and use all of it for basics --- paying off credit cards, paying off car, adding more to the 401K plan this year, putting some aside for the next car we are going to buy. If I can have a lot of the basics taken care of, then I will feel a lot more at ease and we can work toward the fun things.

[DivaJen]

Originally Posted by globetrotter

If I can have a lot of the basics taken care of, then I will feel a lot more at ease and we can work toward the fun things.

I think that's how we function around here. It is hard for us to spend money on to many frivolous things if we feel like there are bigger things looming that need our attention, and that includes saving for the future. That's not to say we don't buy anything that we don't need and don't spend fun money now and then. But when we inherited the money, we saw it as an easy way to get a jump start on investing in our future.