An Inheritance Windfall: Pay Off Debts, Save for the Future, and Splurge Smartly

Are you stuck in a rut feeling like nothing is exciting left to do? Think again! If you were lucky enough to inherit $100,000 suddenly, what would be the first thing on your bucket list? Redditors had plenty of ideas for how they’d spend their newfound fortune. From purchasing exotic vacations, high-end home renovations, virtual reality headsets, and dream weddings to community sculpture gardens to more practical investments in college tuition grants—there are plenty of ways to imagine how you’d spend a large inheritance!

1. Attend the Funeral

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One user pointed out, “Attend funerals.”

Another user replied, “It took me a second, but yep.”

One commenter responded, “Goes without saying.”

“First, I would attend the funerals of the deceased. Then I would think about what to do with the money. Just a matter of respect,” another Redditor shared. 

2. Pay Off Debt

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“Become debt free!” exclaimed one user.

Another user added, “Become debt free, stash the rest in savings and CDs for sure. I’ll even get adventurous and go out and have a nice dinner.”

One commenter shared, “You know you’re an elderly millennial when you see the term CDs and start thinking about replacing your beloved but heavily scratched pop-punk and hardcore punk collection from the early and mid-2000s.”

3. Pay Bills

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One user posted, “Pay bills.”

Another user confirmed, “100% this. Pay bills. Pay off debt. Bank the rest against a rainy day.”

One replied, “Smart.”

4. Plan Ahead

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One user shared his own story, “I inherited a little more, roughly $150k total, than that after my mom passed away a few years ago. My dad [had been] a doctor, and she didn’t have to worry about money for her remaining 21 years. When they sold their rental duplex (they never raised the rent in the 30 years they had it), I used my share to open an investment account for both of my kids and used the rest to pay off one credit card.

“With the cash I received from the trust, I paid off the other cards and started my own investment account. I’m 50, and for the first time in my adult life, I don’t have debt other than a student loan (that will hopefully get discharged under the borrower’s defense for false advertising) and our house.

“Before doing that, though, I booked a family vacation to Riviera Maya. I mentioned Dad was a doctor; well, he and Mom traveled the world going to dads medical conferences and just seeing the world. They lived to see new places and do new things. So, to honor and thank them, I spent a small amount and took the family on our first trip outside the US. I cried on the plane, I cried on the beach, I cried when I saw apple pie at the resort like mom made, and I cried when we came home. At one dinner, we talked about Grandma and what we miss most about her. Dad passed before I met my future bride, so only I mentioned him.

“So if I inherited that again, I’d probably do the same thing again. I remembered where it came from, and I prepared for those it would eventually go to.”

One user replied, “This is beautiful, thank you for sharing your incredible story with me.”

“For a person who is not from the US, it’s mind-blowing that you are 50 years old (not that far away from retirement age), and you still have student loans,” one user commented. 

5. Make Sure it’s Not a Scam

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Another user posted, “You know how generational wealth is kind of a thing—well, so is generational poverty, as it turns out. So if I suddenly inherited 100k, the first thing I would do is make sure this wasn’t a prank or a scam.”

One confirmed, “Yes, fortunately, it’s not a scam, as my aunt passed away.”

Another user added, “I missed that part. Condolences and congratulations in whichever order you feel is more appropriate. Take the sincere advice of a generational poor person for what it is—but if I were in your shoes, I would act conservatively. I imagine there are a lot of people with a lot of enticing pitches for the newly rich. Just keep pulling in a regular paycheck for your day-to-day if you can, and make sure you have found a well-regarded accountant before the next tax season. Start inquiring into a money manager that can provide a realistic plan to ensure your long-term retirement.

“(Edit: Also, think of ONE affordable extravagance you could never financially justify before but might have been able to pull off and give to yourself as a gift. For me, that would be a 3-day weekend in some major city.)”

“Sending condolences, I was put in a similar situation when my dad passed away. The best advice I can give is to not rush into any decisions financially, take your time, and the money isn’t going anywhere!” shared one user.

6. Fully Exhale

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“For the first time in my adult life, I could fully exhale,” one user confirmed.

One user pointed, “THIS.”

Another user commented, “YES.”

One Redditor added, “Hell yeah, just to breathe easy is a luxury.”

7. Add It to the Rest

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One user shared, “Throw it on the pile.”

One user added, “New paint job for the jet.”

“Ya know, my old boss traded in his propeller plane for a jet and got $100,000 in tax write-offs…” a user commented.

One user commented, “I get it… sometimes it’s just super exhausting just thinking of all the money I have.” 

8. Invest

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“Invest,” one user shared.

Another user replied, “All in SPY 0DTE 0.5% OTM calls.”

One user commented, “Invest half, and with the other half, live pretty much the same life, stay at my job, etc., but with complete financial security.” 

Another user said, “Invest, invest, invest.”

The OP asked, “What would you invest in?”

The user answered, “The reality is 100k is just the starting point to getting anywhere financially. If you did inherit 100k like you say you did in another comment, it’s worth knowing that if you’re still young (30 or under), you have a huge head start in a secure financial future. I’ll get crap for this, but only spend up to 15% or so of the actual money you get from this. For the rest of it, you should first look to invest in a tax-advantaged account like a Roth IRA. If you max out that annual limit ($6500 for 2023), then either open up high-yield savings (if you’re in a place to buy a house soon) or put it in something simple like the S&P 500 index fund (if you can put this money away for a long time you’ll be shocked at how much it’s grown in 20 years). But most importantly, if you have any high-interest debt, pay that off first.”

9. Buy Lottery Tickets

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One user shared, “50,000 lottery tickets.”

The OP commented, “Love this, thanks for a laugh.”

Another user shared, “Laugh?”

One user commented, “And then you get $70k back if the MrBeast videos are any indication.”

10. Pay Off Mortgage

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A user shared, “Pay off my mortgage and other debts, then go back to living as normal, just with more disposable income since I won’t be making repayments anymore. It’s such a boring adult answer, but it’s accurate.”

Another user replied, ‘I agree with it; I would do the same.”

11. Save As a Safety Net

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One user shared, “Wife and I inherited around $175k. What we did was largely just keep living life, exhale finally, and catch up on some… debts we had. Used the money as a safety net to get out of construction and into something else, and now our lives are, without a shred of doubt, 100x easier than they were before.”

The OP of the thread replied, “This is my hope.”

12. Ask a Financial Advisor

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One user posted, “I’m 50F on a disability pension with high rent and living costs. It’s an unexpected windfall, and I am not financially literate. I don’t want to blow it. Yes, I am going to get a financial advisor!”

One user commented, “Go to a personal finance Reddit or something and ask how to choose a good advisor. Some are shady!”

“It’s honestly not that much these days, a down payment on a house at most. Pay off any debt, but otherwise, live as you have been. Hopefully, with a safety net for the next financial speedbump,” replied one user. 

13. Trucks and Good Times

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One user freely posted, “Trucks and H–kers. It would be best if I didn’t get 100k.”

Another user replied, “That’s like 1 of each, lol”

One replied, “Each? You must have gotten a cheap truck.”

14. Government Bonds

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One user commented, “After potentially paying estate/ inheritance tax, Spend [40k] on settling debts (I don’t have much, so there’s going to be leftovers, but I will put them in government bonds as savings $. Spend [10k] on online courses and career certifications. Spend [10k] on buying stuff I’ve wanted for a while. Spend [10k] on new tech. Spend [5k] on a mini solo budget vacation to somewhere random. Keep [5k] as pocket cash. Save [20k] in a high-interest account or maybe split into government bonds, high-interest accounts, green tech stock options, etc. ( I am hesitant investing real estate because of the obvious market bubble).” 

“Love this detail; much appreciated. No tax and I’m debt free. I’ll be making a list off this,” replied one user.

15. Donate

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“Help out a lot of people,” one user shared.

Another user replied, “Yes. I’ve already decided who I’m going to help and how much. Giving back is important. I couldn’t imagine not sharing my blessing with those closest to me. I also need help as I have been living on the disability pension, so I’d also like to be out of poverty if at all possible, lol.”

Do you agree with the things listed above? Comment below!

Source: Reddit.

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