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Home > Unexpected windfall; kind of flummoxed

Unexpected windfall; kind of flummoxed

November 25th, 2010 at 09:54 pm

I spoke to my family earlier today, the usual Thanksgiving phone call. Except when my dad got on the phone, he said he's giving me $13,000.

I was so stunned that I couldn't really ask him much about it or thank him. His only explanation was that his savings account wasn't earning any real interest, so he'd researched what the maximum amount was that he could give as a gift to his kids tax-free, and now he's going to give us each that amount. Then he said he'd get my bank details later and wire me the money. And then he passed the phone to my mom, who was more interested in gushing over the videos of AA that my nieces were showing from my Facebook profile.

So, huh. I've been chewing over it for a couple hours (in between stuffing my face and socializing) and I've come up with a few thoughts, but no decision, about what to do with the money when I get it.

The first is, my parents live very frugally. As in worn-down house, thrift-store furniture, cheap old clothes, etc. But they always take care of family. So whatever I do with the money, I want it to reflect their values of thrift and family.

So then, I came up with three things I could do with the money: Pay off the rest of AS's highest-interest student loan, and then make sure I use the freed-up monthly money to invest or pay down even more debt. Or, throw the money into the Roth IRAs I was planning to start in January. Or, set money aside to make sure I have enough for the estate-planning/third-parent adoption legal fees.

There's $9,072 left on AS's student loan. In the 2011 budget, I have $700 allocated to education, whether paying down extra debt or taking on NT's loans if he goes to less than half-time class load and his loans come due. AS's monthly loan payment is $147.47 per month. The interest rate is 6.5%.

I'm just throwing out the figures. I don't know what it all means. I know we don't have enough saved for retirement, and I know we have too much debt. I don't know if one problem is more serious than the other.

As for the third idea, lawyer money, well AS has already earned about half of what we'll probably need, and the freelance jobs she's been getting are still coming fast and furious. Plus, NT is getting a holiday bonus that we can probably put toward the lawyer stuff as well. So I'm really leaning toward debt payoff or IRA.

Two more reasons to be thankful today, besides this big windfall: I'm so glad we've already splurged on ourselves several times this year, because I feel almost no temptation to spend this money. And I'm SOOOOO thankful this money didn't come to me before my financial come-to-Jesus, because I would've piddled it away and probably managed to not improve my financial situation one iota. This is an optimal time in my life for me to put it toward our future well-being; I really don't think it could have come at a better time, and for that I am truly thankful.

7 Responses to “Unexpected windfall; kind of flummoxed”

  1. miclason Says:

    from what you said about your parents, they probably wouldn't have given it to you if they thought you'd go crazy with it! Good luck finding just the right decision!
    Happy Thanksgiving!

  2. zetta Says:

    Have you considered using the money to start a 529 plan for AA? That would meet the "taking care of family" criteria.

  3. NJDebbie Says:

    I thought the same as zetta, but I know you'll do what's best for your family. Congrats!

  4. MonkeyMama Says:


    I think starting the ROTHs is a good idea, since you were just asking about not having the VG minimums. (Retirement before kids!). But, no matter what you do with it will be fine! Honestly, just pick with darts - LOL. If you pay the student loans, you will have more to save for the lawyer, etc., etc. It will all work out.

    I had a similar experience. My dh and I have always been uber conservative, but I found this site and have became MUCH more efficient with managing our money - much more learned about investing, etc. Meanwhile, my parents have never handed me much cash, in my entire life. One day my parents came over and hand me a $5k check. It was beyond unexpected - I don't know if they ever gave me $100+ before that day. But I couldn't help but feel that it was a better gift at that time than it ever would be earlier. I just think it's funny how that works out sometimes. In that case, they had received a VERY unexpected inheritance ("poor" relative) and knew my sister and I could use a little money more than they did.

  5. Homebody Says:

    Well I am going out on a limb here and saying keep the money separate for yourself and AA. I have been married 32 years and I still will keep my inheritance separate. One reason is if something happens to you, if your partners bring on another partner, that your assets from your family will go directly to AA. So with that in mind, I would do a 529 for AA, Roth for you with AA as the .....I can't think of the word.....beneficiary. That's it. Or just do a savings for AA, maybe investing in some DRIPS or something. Just my 2 cents and probably worth that much!

  6. Ima saver Says:

    Congratulations. I would put the money in the IRA's if it was me.

  7. creditcardfree Says:

    Very exciting!! I would put the money in Roth's...divide three ways if you are okay with that. $4333 each...for 2010 (you have until April 15), so that if you find more retirement money in 2011 you can add to it. Smile

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