What would you do?

amother

Chartreuse

Wed, Jan 11 2017, 3:02 pm

If someone gave you a very large gift, let's say $25,000. You're a family that budgets very tightly, and certainly could use the money for practical things, tuition, food, rent, etc. What would you do with the money?
Would you consider it irresponsible to buy a gift (or have your husband buy for you) that you would never be able to afford otherwise?

momX4

Wed, Jan 11 2017, 3:07 pm

If the money was not given for specific purpose then I would use some of it to pay bill, some to put away for emergency, and a small percentage as a splurge.

You can also use it as a down payment on a house, just about.

zaq

Wed, Jan 11 2017, 3:11 pm

Different strokes for different folks. being a very practical person, I would give some to tzedaka, spend a token sum on some much-desired luxury (although I can't think of any luxury I actually desire), and invest the rest. Some poet or other wrote :

“If thou of fortune be bereft,
and in thy store there be but left
two loaves, sell one, and with the
dole, buy hyacinths to feed thy soul.”

Such a pretty thought. But I wonder: If genuinely faced with the possibility of starvation, would John Greenleaf Whittier really sell his next-to-last loaf of bread for flowers? And if yes, did he tell his future wife this when they were courting? Ah, I see on Google that he never married. Perhaps this is why.

cozyblanket

Wed, Jan 11 2017, 4:06 pm

amother wrote:

Assuming the money didn't come with instructions and they wanted you to use it wisely and enjoy, then -sure, a gift of a few hundred or up to 1000 or so, is very nice. You should enjoy. If you normally give maaser, that is first.

The rest? Surely you have a need for something like a better car (you can put this aside til your current car dies, but it is earmarked for a car later). You want to avoid a car loan or lease in the future if you care about your money. OR -- some kind of home repair that you really want to do but can't or will make the house more energy efficient/insulated/etc-basically something that will pay you back and then some.

Then invest the rest (hopefully this is close to one third - half of the total amount).

Iymnok

Wed, Jan 11 2017, 4:33 pm

Pay off our debts. After 10% to tzedaka, Schools and friends first, mortgage next... then get dh a pair of pants.
The rest? What rest? You'd be surprised how fas a large sum like that goes.
If told to buy a luxury, being on top of finances brings much more relaxation then a luxury and peace of mind to actually enjoy life now.

amother

Lime

Wed, Jan 11 2017, 5:40 pm

op- you don't say how much the splurge is or if's the type of thing you will continue to enjoy but it's ok to use a somewhat small portion on yourself. You don't sound like you plan on "blowing" the whole amount.

amother

Royalblue

Wed, Jan 11 2017, 6:10 pm

Right now my one big financial goal is to save for a downpayment so I'd probably put the entire amount minus maaser towards that. Otherwise, I wouldn't use it for regular bills if I was covering that already. I'd want to continue living within my means and not have this one time gift affect that.

amother

Chartreuse

Thu, Jan 12 2017, 1:40 am

OP here, to clarify, I meant a splurge of something like a few hundred dollars. The rest, to use responsibly. The question is really is it wrong to have an attitude of "for x number of years I never buy anything for myself that's beyond my means so now I deserve it" or I'm someone who is responsible about what I buy, no reason for that to change just because I got some extra cash.

Teomima

Thu, Jan 12 2017, 3:41 am

The closest thing to a splurge that I would do is some necessary house repairs we've been putting off. Other than that, save whatever possible (but lately I've been freaking out about retirement savings...finally did the math and I'm so far behind!)

ETA: My opinion on gift-type splurges, for myself or dh, is that it's better to save what I can from regular income and budget for something special. Unexpected large financial gifts should, imo, be put to better use than that.

theoneandonly

Thu, Jan 12 2017, 4:33 am

If you got $25,000, I don't think it's unreasonable at all to spend a few hundred dollars on a gift for yourself. Mental health is important too! And a few hundred dollars out of a few thousand is really a very small amount.

amother

cornflower

Thu, Jan 12 2017, 6:30 am

This is what I would do.

$25,000

$2,500 maaser- I would ask if I can use it towards kids tuition.
$1,000- $1,500 a new Sheitel, and or clothes, shoes, but nothing extravagant, depends on what's really needed. Some people call this a luxury
$21,000 -pay up loans, bring all my bills up to date, put the rest into a mutual fund savings, or full life insurance(not term).

I don't think I would put it for a mortgage on house, unless I was sure I would be able to make the monthly payments. If I had a mortgage already, I may put $20,000. Towards that. I consider that a Loan payment.

cozyblanket

Thu, Jan 12 2017, 8:02 am

amother wrote:

Dave Ramsey tells people who get a gift/inheritance that as long as they are debt free except the house they should use a token portion (a few hundred in your case) to get something they will enjoy. then use the rest really wisely as we have discussed. You sound like you have something in mind that you want. You should enjoy a bit and invest, use wisely the rest. Try not to use it for daily/monthly expenses.

Very happy you have this oppurtunity.

amother

Pumpkin

Thu, Jan 12 2017, 9:01 am

$3000 - wig

$2000 - watch for myself

$1000 - new laptop

$4000 - shades/curtains for kitchen and living room/dining room

$15000 - furniture for living room/dining room

A girl can dream, can't she?

amother

Taupe

Thu, Jan 12 2017, 9:38 am

amother wrote:

A few hundred bucks when you were just given 25K? Go for it, girl! Life is for the living. I thought you meant splurging most of the 25K.