Possibly inherting 25k...

[mamadelbosque]

So, my grandma died a couple weeks ago now, and I just found out that all of us grandkids are probably going to be getting 25k. I'm in shock, honestly, sad she died and all that... but I had *NO* idea this was going to happen... and now I don't know what I/we should do with it. Some (most?) of it is likely going to be in stocks, so I'm planning on just holding onto them for now... but if some if ends up in a lump sum, what should I do with it? Buy stocks? Buy gold? Just stick it in a high-interest savings account??

DH & I blessedly have essentially no debt (both went to community colleges), and he is just finishing up school this next year... we've talked about moving out and buying a house, but that won't be till he gets an actual firefighting job (no point in buying and then having to sell in 6 months or a year, yk? Specially when we can live here (w/ my dad) for free for as long as it takes...). My car is a 99 accord and getting kinda old and starting to have 'issues' so we've also talked about buying a new car... but after talking to my dad about the whole thing we've kinda come to the conclusion that we might be better off getting a loan for a car and just building up some credit...

So yeah. All you financial guru's out there... what would you do if you were suddenly given a lump sum of cash and didn't have bills to pay off (other than a few hundred in CC which'll be paid off w/in a couple months anyhow...)

[nd_deadhead]

Wow, what a nice problem to have!

Do you max out on IRA contributions? That might be one place to invest. Starting college accounts for your kids might be another. But I think you've already pinpointed the best use for a windfall (once you're settled) - a down payment on a house. I don't have any good advice on where to put the money until then, however.

I tend to agree with your Dad - if you don't have debt, and you won't have any trouble making a car payment, loans are awfully cheap right now. Better to hang on to the money for an even bigger purchase (a house) later.

[A&A]

I would NOT put it in stocks, personally!

http://www.nytimes.com/2010/07/04/yo...e&ref=business

"The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said. That unraveling, combined with a depression and deflation, will make anyone holding cash “extremely grateful for their prudence.”

[SleeplessMommy]

Originally Posted by mamadelbosque

Buy stocks? Buy gold?

no and no. !

i would go for an emergency fund (vanguard) and make sure you have aretirement fund.

[Poddi]

I'd save it in a secure account, CD or other things like that, and use it for a downpayment in a couple years when you're ready to buy a house. I feel it's probably the best use of what grandma left you. DH's grandma didn't leave grandkids any money, although she gave them regular cash gifts when she was alive. DH saved all of his and used it towards downpayment of our first home. It seems to be universally approved by everybody.

[annekevdbroek]

Yeah, not stocks or gold.

. Bonds have more secure returns than stocks. There are bond funds available at places like Vanguard, so you don't even have to mess with buying individual bons.

HOwever, if you are saving for a house in the next several years (like w/in the next 5) I'd go for a money market account (Vanguard) or the best CD rate you can find. The money is still fairly liquid if an emergency arises, but the returns are also reasonable secure and you won't lose money (as you would be at high risk to do with either stocks or gold).

[Denvergirlie]

I would stick it in a normal savings account or the like. ING still offers a bit over 1% in interest, CD rates are very low right now, and I certainly wouldn't lock it up for numerous years. A 10 year treasury is only a bit above 3%, so locking this cash up into an investment over savings would not be the path I would take since you might want to buy a house soon.

Stick it in a savings account, leave it alone for at least 6 months until you have more time to really think thru what your wants and desires are.

[phathui5]

Do you already have an emergency fund in place with 3-6 months of expenses?

[mamadelbosque]

Hah, no, we currently have ~$600, and ~ $700 on the credit cards. DH is working now for the first time in 2 yrs, almost and will be paid for the first timee ~ the end of the month (probably right around $600, and the same every 2 wks from there on out), so I expect that we'll have the CC's paid off in a couple months and be back to paying them off every month (last month was the first time I'd been unable to do so in yrs).We have no other bills though aside from car insurance every 6 months (which my dad usually pays for and calls it my xmas & bday present respectively ) - we live w/ dad so no rent or utilities... and are on foodstamps atm anyhow which helps immensly. We've been living off of xmas/bday/overage checks (from dh's fafsa) for the last 2 yrs... So this is all wonderful fantastic news.

[Shakti77]

I'll move a part to emergency fund...maybe 7 thousand...and then start saving the rest in a high interest savings account for a down payment for a house till I reach 20% of downpayment. I'll think of this as a blessing from my grandma for a new house. I might not be ready to buy a house now...but by the time my down payment has grown nicely, I'll be totally ready to own a house.

What I absolutely will not do is I will not increase my living expenses. No stocks...not investing in gold. NOT right now!