For once in our lives...we've come into cash!!! £30,000!! AIBU to ask WWYD?

(218 Posts)
Stripedmum Sat 24-Aug-13 12:07:54

Well it's only gone and happened - we have money! Yippee!

We are now thinking of extending. What would you do with the cash?

chocoluvva Sat 24-Aug-13 12:08:53

Completely depends on the state of the rest of your finanaces eg mortgage?

VacantExpression Sat 24-Aug-13 12:10:55

If it were, say a competition win, I would pay £25,000 off my mge and spend the 5k. special holiday and a treat each.

Congratulations!!

wonderingsoul Sat 24-Aug-13 12:11:07

£2000 towards my debit.

buy flooring/carpet for my council house as it wouldnt be enough to buy own house but could aford to do flooring and m aybe painting.

take the kids on hoilday.

take them to toys rus and let them buy 2 things with out worrying about the cost.

buy myself somme decent clothes.

and other than that im lost.. prob savings.

wonderingsoul Sat 24-Aug-13 12:11:43

oh and congratulations smile
you must be over the moon.

Stripedmum Sat 24-Aug-13 12:11:49

Mortgage - £195,000. About £40,000 equity. We're early 30s, have a loan but it's due to be paid off soon so not looking to pay that off. No other debts. 2 young DCs.

MikeLitoris Sat 24-Aug-13 12:11:58

Pay debt about £5k

Holiday and rest as deposit on a house.

Can I be nosey and ask how you came into the money?

half for something sensible (e.g. an extension)
quarter for something luxurious (e.g. holiday)
quarter for saving

wonderingsoul Sat 24-Aug-13 12:13:00

deff a hoilday.. but i wouldnt go crazy some where decent but not spendin gmoney for the shake of it

Stripedmum Sat 24-Aug-13 12:13:18

We are over the moon!! We never have money to pay the window cleaner!

DreamingOfTheMaldives Sat 24-Aug-13 12:13:47

Put a chunk in the bank or pay off part of mortgage/loan, have a holiday or bit a bit frivolous with some, treat my family with some.

Congratulations -- you jammy bugger-- grin

DreamingOfTheMaldives Sat 24-Aug-13 12:14:05

Strike out fail!

Stripedmum Sat 24-Aug-13 12:14:19

A gift smile

FacebookWanker Sat 24-Aug-13 12:15:06

I would put down a deposit to buy a house.

BettyBottersBetterButter Sat 24-Aug-13 12:16:50

I'd splurge £5k on a trip to Disney, save £5k then spend the remaining £20k sorting out our finances & doing either a garage conversion or towards an extension. How lucky grin

Lara2 Sat 24-Aug-13 12:17:32

I inherited £38000 about 17 years ago - felt exactly the same as you! Congratulations!!!
We went on a fab family holiday and moved up the housing ladder to our forever home - still here. I wanted to make sure a large part of the money remained sort of intact and investing it in a house meant that that happened and we had the house we wanted.

Finola1step Sat 24-Aug-13 12:18:28

I would put in the bank and sit on it for a while to avoid making silly mistakes.

We would also look at putting the money into the house in some way.

Or one holiday. And then save the rest equally between the children for university fund etc.

It really depends on your circumstances. See it as a lovely chance to give yourself and your family some financial security.

Stripedmum Sat 24-Aug-13 12:20:59

Hi Lara! Yes that's what we're in a 'dilemma' (nice dilemma) about. Move or stay put and extend. Just don't want it be eaten up with the costs associated with moving. That's why we're thinking extension, add value and maybe move to forever home in five years or so when we actually may have money of our own too!

Fuzzysnout Sat 24-Aug-13 12:21:08

Congratulations! No idea what you should do with it but very happy for you!

Stripedmum Sat 24-Aug-13 12:22:49

Thank you everyone - we're cock a hoop.

chocoluvva Sat 24-Aug-13 12:23:41

Pay off some of the mortgage - you could either reduce the term while keeping the payments the same - that would save you the most money in the long run. Or, you could keep the term the same but reduce your monthly payments by paying your £30k into it. If you're mortgage conditions allow you to.

Sorry to rain on your parade, but you'll have higher living costs with an extension - eg, bigger utility bills, decorating furniture etc. Presumably it would add value to your property - useful if you're likely to move again.

chocoluvva Sat 24-Aug-13 12:24:16

x-=posted. Sorry.

magimedi Sat 24-Aug-13 12:24:55

I don't think I'd go through the expense & hassle of an extension for five years use of it & I would check with local estate agents about how much value it would add to your property.

If I were you I'd have a treat & then think about what you want to do with it for a month or two. Don't rush in & splurge it.

Am v pleased for you though.

MortifiedAdams Sat 24-Aug-13 12:27:12

£30,000 -

Put £10k away in a high interest savings accoubt for ten years - want to take dd to Florida when she is 10/11

Pay off the car loan - £7k

New kitchen and bathroom (teeny flat) - £5k

Build storage into lounge and bedroom - £1k

Holiday booked for the three of us for next year (UK probs), plus spends - £1k (days out, nice food, private hire of a great seaside cottage, petrol)

Give my folks 1k as they are always helping us out

Dh would learn to drive and get a banger, plus insurance - £2k

3k spare to see us through a nice year of comfort.

80sMum Sat 24-Aug-13 12:27:50

I think your idea of adding an extension to your home is an excellent one. In your circumstances, that is probably what I would do. You will have a nicer, larger home to which you will have added value should you decide to sell it and move in the future.

fifi669 Sat 24-Aug-13 12:27:54

I think I'd buy to let myself, whack a load down as deposit, have someone else pay my mortgage. Forget about it and have as retirement bonus..... Not as exciting as holidays etc but practical and would multiply your inheritance many times

Mumoftwoyoungkids Sat 24-Aug-13 12:27:57

Pay it off the mortgage.

[needsto get a life emoticon]

sheridand Sat 24-Aug-13 12:29:15

Wipe out debt, stick the rest in a high interest account for the kids, as it'd be the only way they'll ever afford to do university.

MrsWilliamBodie Sat 24-Aug-13 12:31:03

Pay the window cleaner grin

how exciting - congratulations

rosy71 Sat 24-Aug-13 12:39:47

Pay off loan
Book a holiday
New bathroom
Don't know after that!

RichManPoorManBeggarmanThief Sat 24-Aug-13 12:40:53

Purely from a financial point of view, what You should do depends what rate you're paying on your mortgage and if there are penalties for reducing the balance through one off payments. For paying down your mortgage not to be the best option, the other options need to yield more than that.

Eg if you spend 30k on the extension and it increases the value of your house by 30k but you're currently paying 5% on your mortgage then you'd have been better off paying down the mortgage and saving money each month.

However, if you're on some crazy low deal- like you're paying 1% or something, you'd be better off sticking the money into an Isa ( will take 2 tax yrs but do one now and another on 6 April 2014) as the return will likely be more than the interest on the mortgage

diddl Sat 24-Aug-13 12:44:29

New bathroom.

Wood floors downstairs.

Make cellar into a usable room.

primroseyellow Sat 24-Aug-13 12:45:24

Maybe put some aside for when/if DCs go to uni?

Sister77 Sat 24-Aug-13 12:46:37

Dunno but congratulations!

Stripedmum Sat 24-Aug-13 12:47:47

Everyone is so clever with money. We are so shite. Lots of good ideas here - Mortified you really stretched it to good use.

There's no penalties for one off mortgage payments but is it really bad to say we want to enjoy it now? I think with our two DCs the extension could be part sensible - adding value to property and more space for their plastic mounds of stuff - but also fun and exciting.

The buy to let idea is a good one too. Never thought of that!

DontmindifIdo Sat 24-Aug-13 12:47:52

I think if you are facing not having enough space and potentially moving in the future, it would make more sense to extend now. If we just came into a similar sum, I'd convert the loft. We love our house, just could do with a little more space upstairs.

sparklingstars Sat 24-Aug-13 12:48:30

Have a great holiday, put a bit in the bank for a rainy day and the rest off the mortgage.

dashoflime Sat 24-Aug-13 12:50:14

"I would put in the bank and sit on it for a while to avoid making silly mistakes."

This^^

Then maybe some in the mortgage and some for a holiday

thebody Sat 24-Aug-13 12:50:59

holiday, extension or put away as. nice nest egg for rainy day.

lovely for you.

MooseBeTimeForSnow Sat 24-Aug-13 12:52:04

When something similar happened to us, we put it all in Premium Bonds whilst we waited to build our extension. We won each month and received more in winnings than we would have in interest over the same period.

Congrats and enjoy smile

Ghanagirl Sat 24-Aug-13 12:52:33

Lucky you
Clear credit card, pay off some of mortgage, then nice holiday to
St. Lucia me DH and kidssmilesmile

Are you thinking of moving for schools? Or staying put? That would influence my decision as to extend or not!

Xmasbaby11 Sat 24-Aug-13 12:56:33

Add extension, but keep some back for savings. And a treat for the family - maybe a holiday (while extension being done!).

Congrats!

melika Sat 24-Aug-13 13:00:15

new kitchen, bathroom, carpets, orangerie, garden landscaped, bed room furniture that matches, give kids few quid to go mad with and a great holiday!

Viviennemary Sat 24-Aug-13 13:03:20

Certainly an extension. And if you have any left after this then a family holiday would be nice.

DeckSwabber Sat 24-Aug-13 13:03:58

I think some needs to be 'rainy day' money - perhaps put 3 months mortgage repayments in an 'emergency' fund. Put some extra savings aside for the children.

Then see how much is left over for the extension.

Scarily, £30,000 doesn't go all that far these days.

You might also think about investments that save you money in the long term, like getting a more reliable car.

Rufus43 Sat 24-Aug-13 13:04:02

Yay you! When the same sort of thing happened to us we decided to put it towards holidays, so we would save a couple of grand and then use a few grand to "up" the holiday. Ie Florida rather than our usual beach holiday

If I got the money today, I would replace the doors in the house, put some money aside to sort the garden next year and probably put the rest towards holidays

SquidgyMummy Sat 24-Aug-13 13:04:04

I would build an extension, you may as well get the tangible benefit of it now.

Moving house will cost you at least £10k.
(Eg based on your current house value £235k; you will end up buying a new house for more than that £250k - stamp duty will be 3% = £7500 minimum.
Estate agent 1% £2300; Solicitor, £500 +)

That's a 3rd of your windfall already.

I would have a lovely large family room built - kitchen dining living all in one. 20sq m would cost you between £20k & £30k according to this website.

Also a lovely trip which your family will always remember. I would ask (if DCs are young enough to take them out of school, why pay through the nose for designated holidays.)

When i was young, my DM took me to the US for a month. I still remember it 30 years later

noblegiraffe Sat 24-Aug-13 13:04:29

Interest rates are shite at the moment for savers, I would think very carefully before simply putting it in the bank. Paying off the mortgage, or spending it on something sensible would be better.

Perhaps a session with an independent financial adviser would be an idea?

NeoMaxiZoomDweebie Sat 24-Aug-13 13:05:37

WOOOOOOH!! For you! How gorgeous. xxxx

Piffpaffpoff Sat 24-Aug-13 13:05:56

Deposit on a buy to let is what I would do, better long term investment I think.

fortyplus Sat 24-Aug-13 13:06:31

Sorry to be boring but if you have £195k mortgage I'd just pay off some of that unless your house is far too small for you. You probably wouldn't get a 2-storey extension for £30k. Have you got a long term fixed rate of interest? Rates will stay low for the next few years but could rise after that so paying some off now is prudent. Definitely boring but sensible!

maleview70 Sat 24-Aug-13 13:06:38

Those saying high interest account......

It doesnt exist anymore!

Extension sounds like a good idea if you need more space.

If not, reduce mortgage if rate high.

FitzgeraldProtagonist Sat 24-Aug-13 13:10:05

Pay off tAx credits overpayment and the council tax arrears from bastard exH that I am being chased for despite having paid my share and moved out. Pay off debts. Save remaining £9k to live off as job finished again. Maybe get slightly better SH car, present for DCs and some new baby and hOuse stuff. Congrats!

Stripedmum Sat 24-Aug-13 13:12:04

Oooh Squidgy! That's really helped.

We don't have ANY extra money which is why the moving thing seems counterproductive. We love where we live (good school for DCs when it's time). We would eventually like to move out the a cute country village but at the moment all we could afford there would be a big step down property wise when more space is what we need. The country dream will have to wait until the DCs are much older. Really, really fancy the open plan kitchen/living/dining room. I think it's a set up that works so well.

ChippingInNeedsSleepAndCoffee Sat 24-Aug-13 13:13:26

It would depend on what I could buy now with the equity in the house and £30k cash as a deposit. House prices are going up here, reasonably quickly - I would look at moving now if I could afford a house I really liked, in a good area etc

If I were you and decided not to move, I would talk to some estate agents to see if they thought we would get our money back before deciding on that. Unfortunately £30k doesn't go that far when you are talking about extensions.

I wouldn't spend that much 'frivilously' as I would rather do something 'big with it.

Did the person who gave it to you say anything about it?

Stripedmum Sat 24-Aug-13 13:14:18

Fortyplus - yes that's the sensible option isn't it? More space would be a luxury rather than a necessity if I'm being honest. I don't think we could bring ourselves to do that though! Would feel so disappointing.

FriskyHenderson Sat 24-Aug-13 13:14:44

Personally I'd blow the lot and buy a huge, pimped out 9 seater camper van.

Congratulations!

Spend it on your home, have somewhere fabulous that you love and enjoy coming home too.

Am well jel!

Stripedmum Sat 24-Aug-13 13:18:41

Yes people from who it's came would not like us to spend it on holiday etc. More like moving/extension/paying off mortgage/something thta's going to put us in a better position for the future.

Chipping in: yes. That's what we've been told by a few people. We live in a good area but there is a 'better' area just next to us where you can pick up a really big house at a great price atm.

I have a newish baby and a toddler though and I just can't imagine uprooting at this minute. It would, however, possibly really set us up for the future if everything added up.

There is the 'cost of moving' thing though - as I said earlier we literally don't have an extra £100 to add towards it...

Misspixietrix Sat 24-Aug-13 13:19:06

Pay debts off. Driving lessons. Get a car and have a bloody good Holiday and Christmas! grin. Put the rest in a Trust fund for DCs or something. Congratulations OP. Enjoy flowers

Stripedmum Sat 24-Aug-13 13:19:44

grin at camper van.

fortyplus Sat 24-Aug-13 13:22:34

ps you need to be financially secure for buy-to-let. You'll need a loan (obviously) and fab if you have good reliable tenants in straight away and paying rent. But if they lose their job and can't afford to pay then you'll be in trouble quickly. We let my grandad's house when he went into a home. All was well for a year then the tenant couple's relationship broke down - he moved out, she couldn't afford to pay full rent. She did the decent thing and eventually paid what she owed in full but we were lucky and could cope with loss of rental income for a few months.

BarbarianMum Sat 24-Aug-13 13:23:10

Congratulations smile

Sort your wills out, if you haven't.

Take out life insurance/critical illness cover for both of you, if you haven't got it.

Pay back any small loans/ credit card debts.

Put aside £5,000 as emergency money (if you don't have that much in easily accessible savings).

Then - whatever you want really.

Floatsyourboat Sat 24-Aug-13 13:24:27

My brother & his wife inherited over £100,000 last year from the death of her mum and they went out and bought a huge yacht because they love sailing. We all said they were mad to not put it towards getting a house but they are so happy with it and my husband and I get lovely free weekends away on it so I think they chose the right thing for them.
Enjoy it!

forevergreek Sat 24-Aug-13 13:25:27

Put it all on a high interest account.

Then spend the next year researching best way to do extension.

When you go to spend it you would have a few thousand extra that you didn't have and can use this for holiday/ clothes/ whatever you need

bochead Sat 24-Aug-13 13:26:05

These are economically uncertain times globally + the welfare state is dying a slow death & you have young kids. Our generation have uni fees to consider and no state pension prospects to speak of.

I'd put £25K on the mortgage and £5K into an easy access cash ISA. That would give you a cushion if job loss or illness comes your way. It's shocking how much money mortgage companies leach off us over the years, as a result of compound interest. The sooner anyone is mortgage free is the sooner financial freedom can be achieved, and £25K would bring that day a little sooner. £195K is a big amount to owe out to anyone.

Stripedmum Sat 24-Aug-13 13:26:25

Good idea re. putting a couple of grand away for emergencies.

Forty - no we have NO extra money and won't do for the foreseeable, so buy to let not sounding right for us. You'e right - it could v quickly 'go wrong'.

Lj8893 Sat 24-Aug-13 13:51:45

Clear out debts £3000

Splurge a little (holiday, car, nice home furnishings etc)

Save the rest as a deposit for a house.

Congratulations!!

SkinnybitchWannabe Sat 24-Aug-13 13:52:06

I'd spend £5k towards a newer car then another £5k saved then the rest goes on the mortgage.
Huge congratulations btw grin

elfycat Sat 24-Aug-13 13:52:10

We had a similar figure (DH finishing in the army) and we paid most of it off the house, used a bit to decorate and replace the front door. And put a couple of thousand in a rainy day fund ironically some was used to replace the leaking garage roof

Financial security is the way to go!

vintagecakeisstillnice Sat 24-Aug-13 13:57:24

Don't waste it , while you're thinking what to do put it somewhere you can't easily access. I was gifted a smaller amount a few years ago stuck it in my current account and before I knew it, it was gone. On crap.

Personally that amount I'd put 5 grand in a slush fund, get a decent holiday out of that. 5 grand in an Oh Fuck account. For the bad things and then either depending on where you live either extend or buy to let.

But while I ducked up, he thing I regret most is not having 'something' to show for my money. Not nessceserly. A physical thing, a really good memory would have been enough.

I had a 'big' birthday recently my Mum sent money. It was easy to think oh this will pay xy&z, but is budgeted for then so I bought a ring. In years to come I can look at that and say that's the ring my Mum bought me for my birthday. I hope some of my rambling makes sense.

TallulahTT Sat 24-Aug-13 13:58:07

If you paid the money off your mortgage you would probably have about £200 a month more space depending on your term remaining it may be more, would that make an ongoing difference to your life? A holiday budget each year if you put it aside and more security in your home ownership? (disclaimer I'd probably spend it!)

hackmum Sat 24-Aug-13 14:03:51

In your position, I would open a bank account that is combined with your mortgage, so that if you paid in £30k, your mortgage would immediately come down by £30k, but if you wanted to access the money to spend it, you still could. (We have now paid off our mortgage, but when we had a mortgage, this worked very well for us.)

The reason for this is that the interest on debt is always higher than the interest on savings, so it makes sense to pay it off as quickly as you can. Obviously a lot of people don't like to do this because they'd prefer to spend the money to treat themselves to a holiday, extension or whatever. That's why a combined account works well - you can reduce the debt immediately, then spend the money (or some of the money) later if you want.

EeyoreIsh Sat 24-Aug-13 14:12:12

lucky you!

Make sure you have three months worth of money in a savings account that is easily accessible. That way you have a back stop against redundancy/illness/car breaking/boiler breaking etc.

book a lovely holiday.

then put the rest in premium bonds whilst you decide. I'd either pay part of mortgage off or reinvest.

For what it's worth, we're in a similar position after selling one property. We could do the sensible thing but instead we're buying a flat to rent out. That will take all the money and then some. Just as DH loses his job. I despair!

Stripedmum Sat 24-Aug-13 14:17:47

Ooh I've not heard of the 'attached' bank account hackmum. That sounds interesting.

cozietoesie Sat 24-Aug-13 14:19:19

Congratulations!

I'd clear off any (non-mortgage) debts and then use a couple of thousand as 'mad money' to treat yourselves to some things you've perhaps been yearning for.

And then I'd wait. Put the rest of money in as good an interest earning vehicle as you can find and leave it there untouched while your thoughts season. 5 months down the line, you'll be over the shock of the good fortune and might be thinking very different thoughts.

Yes to paying off any non-mortgage debts and putting it aside for several months.

It's so easy to fritter away, sadly.

I'm rapt for you! smile

hermioneweasley Sat 24-Aug-13 14:43:38

I am going to be the boring one. You don't have a lot of equity in your house, so I don't think it's move or extend, I think it's pay a chunk off your mortgage. Maybe keep £2k back for a holiday.

Yes I am extremely dull, but I paid off the mortgage on my (little) house by my early 30s and then went about saving to extend it. I always enjoyed the look on people's faces when I said I was paying for the work in cash from savings.

Quiltcover Sat 24-Aug-13 14:47:31

If I were you:
A lovely family holiday (nothing crazy, just somewhere nice, and enjoy a rest, getting c

Quiltcover Sat 24-Aug-13 14:48:47

...cooked for etc
Few additional treats, maybe an iPad or something like that.
Some on savings
Extension to the house.

Enjoy smile

DumSpiroSpero Sat 24-Aug-13 14:50:19

Special holiday - have only ever done Butlins and camping since our honeymoon, so an adventure abroad would to of my list now DD is a bit older.

Replace the family car with something decent secondhand.

Redecorate/furnish our bedroom - 11 years in this house and we've done everything else - it's hideous and we really need a new bed.

All going well that would leave about £10k to stash in a long term savings account, or more likely, pay off a chunk of the mortgage.

Stripedmum Sat 24-Aug-13 15:00:22

I'd love you all to have a £30k windfall too.

marriedinwhiteisback Sat 24-Aug-13 15:11:54

Congratulations.

This is what I'd do in your circumstances:

2k for a bit of fun
20k off the mortgage
8k in Lloyds Bank shares (read the forecasts)

20k off the mortgage would save perhaps 140-150 pds per month. I would put 100-120 of that into a savings plan, possibly an ISA linked one and slip 30 a month into a savings account for stuff like Christmas or general extras.

Sorry to be so boring - well not that boring because I'm advising a stock market gamble and you could double the 8k in 18 months to two years.

SinisterSal Sat 24-Aug-13 15:18:21

Hold on to your hats to hear my thrilling plan

Get loft done.
Not even a useable room with stairs. Just a pull down hatch, floored, and shelved. i bet that would free up loads of real downstairs space if you could easily access all that stuff that's currently in cupboards, under beds, and under the stairs etc.

Holiday .

Mortgage.

BlehPukeVomit Sat 24-Aug-13 15:22:21

When you were skint did you ever 'borrow' money from anyone that you should repay? Parents etc??

Silverfoxballs Sat 24-Aug-13 15:35:59

What kind of house and what are bedroom arrangements? some extensions do pay for themselves and some don't.

In your shoes I would redeem as much as poss without penalty on mortgage and I would clear the debt first. Work out how much you would save in interest paying debts off early.

I would also save about 5k in an instant access ISA for emergencies, such as new car, boiler, roofing repairs boring stuff like that. Interest rates are dire but if you are not able to save regularly and not expecting any other windfalls then hang on to some.

I would splash out on a holiday though.

RobotHamster Sat 24-Aug-13 15:38:23

Put your details into this calculator

pull this face > shock

sarahtigh Sat 24-Aug-13 15:41:52

unless your loan is paid up within 12 months pay it off now

the sensible advise

do you have 3-6 months salary as a rainy day back up in a relatively easy access account? if not that first before paying off any of the mortgage as you can't access that money again

25% equity in your house is roughly 60,000 so by having an extra 20K put by you have 25% equity which gets you much better mortgage deals that your current 17% equity. However, do not tie 25k up in repaying mortgage as if you ever needed it say for a redundancy etc it would be inaccessible unless you have offset mortgage, if you are near the end of present mortgage deal an offset could be an idea while you decide, you will not find a savings account that pays after tax more than your mortgage interest rate

my idea would be

1. 3-6 months salary in savings, emergency fund
2. increase equity to at least 20%
3. £2-5k for treats, good holiday, new nice clothes, christmas, better car if necessary
4. check house is anything on last legs freezer washing machine etc
5, serious discussion as to whether extension is the best idea or saved towards a move

sarahtigh Sat 24-Aug-13 15:57:24

an offset works with linked account

your mortgage 195K you have 28K in your nominated account ( you have spent 2k on holdays etc)

so each month instead of paying interest on 195K you actually pay interest on £167K

1. if payments remain the same the money that would have been the interest on the 28K goes to paying off capital instead hence reducung term of mortgage so instead of taking 20 years to clear mortgage it would be paid off in 17.5 years approx
2. if you decide to decrease payments as you are paying less interest but repaying same amount of capital ie not reducing term of mortgage you will be about £75-85 better off each month which could then be saved for holidays approx £900-1000 a year

if 2 years down the line you spend £15k you are then still offsetting 13K so paying interest on 182K not 195K

hope that helps

RobotHamster Sat 24-Aug-13 16:24:32

Oh ignore me,offsetting is a much better idea

AnotherWorld Sat 24-Aug-13 16:35:25

Agree with 3-6 months of emergency money. If you literally don't have anything extra ie £100 then keeping some back in a fund would be sensible.

The other thing to ponder would be could you use the money for training or something to improve your income long term?

I'm watching this thread with interest as we are in a similar position.

ExcuseTypos Sat 24-Aug-13 16:47:31

I don't know if anyone has mentioned this but is the 'gift' eligible for tax? I thought you could only be given about £3000 from one person without needing to pay tax on it.

Of course the person giving you the money may have already thought of this and paid it. Just check OP.

LynetteScavo Sat 24-Aug-13 16:48:18

I don't want to rain on your parade, but I'm not sure how much of an extension you will get for £30K.

Personally I would keep £10K for emergencies, and pay £20K off my mortgage, but I am old and boring and have done the buy to let thing, etc.

And I would obviously have to use some of the emergency money for a brilliant holiday. grin

FutTheShuckUp Sat 24-Aug-13 16:50:57

A gift? Of 30k? Wowzer! I've just asked cap in hand if my parents would mind buying me a book for uni costing 25 pound!

catinabox Sat 24-Aug-13 16:52:46

We don't have ANY extra money

More space would be a luxury rather than a necessity

You have two very small children. No savings or spare money. Why on earth are you thinking this money should pay for an extension that you don't need or a lifestyle change?

For goodness sakes unless you need to move and are really unhappy where you are, or are totally cramped in your home, save the money and perhaps plan a nice family holiday.

You could open a savings account for DC, for future driving lessons, cars, school trips.

It really pisses me off to hear people getting a chunk of money in there hands and simply planning how they are going to spend it.

Sorry, I know i'm uppity. My husband has a name for me relating to my attitude towards money... but it is offensive so i won't share it grin

VoiceOfRaisin Sat 24-Aug-13 16:53:23

Congratulations!!!

Put away an amount equal to a year's expenditure for emergencies so that you will never be side swiped by joblosses/illness then use the balance to pay down the mortgage. Your monthly bills will be reduced for ever enabling you to have small treats every single month.

And yes, perhaps a small celebration but don't go mad - ? weekend away somewhere relaxing.

I am also old and boring.

catinabox Sat 24-Aug-13 16:53:28

*their hands. God, i'm illiterate.

LittleprincessinGOLDrocks Sat 24-Aug-13 16:56:52

With £30K I would either;
pay off my mortgage and get a new kitchen and bathroom
Or;
Move to a better house (as it would give us a much better down payment than just selling this house).

Blondeshavemorefun Sat 24-Aug-13 16:57:40

i would pay a chunk off your mortgage (maybe £15/20k) but keep monthly repayments the same, hence clearing quicker and saving 1000's on interest

have a nice holiday/days out treat for family

put rest into premium bonds, hence giving you a chance every month to win, i often win £25 a month, still waiting for the million grin but also means if you need money asap you can get it out

Adikia Sat 24-Aug-13 16:58:41

I live in a council house so I wouldn't spend any of it on the house, except maybe a lick of paint and I don't have any debts to pay off other than the £30 I owe my brother.

I would learn to drive and get a cheap car

Take all of my family on holiday (camping as the kids love camping but lots of places to visit)

Open savings accounts for each of my siblings, DD, DS and my parents. (the younger siblings, DS and DDs would be in accounts they can't touch until they are 18)

Have 2 really nice days out with my kids (so they could plan a day each) with some money to spend in the gift shop wherever they decide to go. - DS has been on about falconry courses all summer and DD wants to do a day as a zoo keeper. - both of which sound fantastic to me.

Put the rest in a savings account so I've got money for any emergencies that crop up/for bits the kids need.

catinabox Sat 24-Aug-13 17:02:37

Adikia I want YOU to have a windfall of 30 grand. You totally grounded lovely lovely person. I demand you go and buy a lottery ticket immediately. I have sent you some luck.

ChippingInNeedsSleepAndCoffee Sat 24-Aug-13 17:06:35

It really pisses me off to hear people getting a chunk of money in there hands and simply planning how they are going to spend it

Why is that then catinabox? It's not as if the OP is asking which brand of chocolate she should spunk £30k on. She has been given the money to put them in a position where they are better off in the future and she is having a bit of fun with it and taking on board sensible financial suggestions.

LadyKooKoo Sat 24-Aug-13 17:06:47

If you are in the position now where you manage each month without going into debt then I would suggest you lock it away for 12 months and actually think about what you want to do with it. Brittania do a 12 month fixed account which gives 2.03%. However, if you are disciplined and organised you could put £5k in a Lloyds vantage account (you and DH could have three accounts each). They will pay 3% on £5k but you have to put a £1000 in a month so would have to be moving the money around. We came into money a few years ago and did exactly this (locked it away for 18 months to figure out what we wanted to do with it). Good luck!

catinabox Sat 24-Aug-13 17:11:45

I don't know chipping it just does! I really resent spending money too frivolously or unnecessarily and hate not having savings. I have had chunks of money sat in savings for a few years here and there. Used for emergencies, deposit on house, wedding etc. Like i said, my DH has a name for me which is quite rude!!

Jenijena Sat 24-Aug-13 17:12:21

I would put £20k on the mortgage (this might reduce your payments by £50-100 a month so more treats one term), £5k on a holiday and £5k on a one off in the house - 'doing' a room. Currently, it would be my bathroom but. Enjoy it smile

Adikia Sat 24-Aug-13 17:20:40

Thanks catinabox. tbh a smaller win would do me at the moment, enough for a day out and maybe some sweets for on the train grin

catinabox go on, what does your husband call you? grin

catinabox Sat 24-Aug-13 17:31:03

Message deleted by Mumsnet for breaking our Talk Guidelines. Replies may also be deleted.

ChippingInNeedsSleepAndCoffee Sat 24-Aug-13 17:42:38

Hmm - somethings are probably better left unsaid these days.

Catinabox - I can understand wanting savings behind you and I can understand wanting to save for special/big things (and I said earlier on that I wouldn't spend it on frivilous things) - but I really don't understand why threads like this make you angry. No-one has said 'piss it all up the wall doing x' have they? Pretty much everyone has said something 'sensible'. There's no point in just putting in a regular bank account.

KellyHopter Sat 24-Aug-13 17:47:31

Uh...

Stripedmum Sat 24-Aug-13 17:48:33

Right - absolutely need to do this emergency money thing. DH job is very secure, mine not so. Perhaps £5k.

Re. the tax thing - I have heard about the £3k gifting thing. They are holding it until we decide what to do. Ie. if we choose extension they can pay directly. I have to be honest and say I have no idea what yhe law is on doing that and so will have to check it out. I suppose with there being four of us each of us could get a £3k gift and the rest is then taxable?

MUST get life insurance. DH has it - I don't blush

Will have nice chat with DH tonight about it (like we've done every night since being told). The sensible decision is the paying a chunk off the mortgage and keeping payments the same + £5k for emergency...however i just don't think we could bring ourselves to do this!

Maybe a compromise on extension (20k), 5k savings, 5k overpayment.

Tax thing could be an issue...

KellyHopter Sat 24-Aug-13 17:49:48

Frivolous and unnecessary are subjective though. Holiday? Great, I would, but surely comes under the frivolous and unnecessary heading?

catinabox Sat 24-Aug-13 17:51:03

chipping yes. Someone did ask and the general mumsnet audience are reasonable enough to know that i am not being anti semetic. I know it's a bit offensive.

No lots of good advice on here. I whole heartedly approve.

I'm thinking about maybe moving some of my money into premium bonds actually. With interest rates so low at the moment it would make sense.

Coconutty Sat 24-Aug-13 17:51:32

cat that's really not at all funny.

OP, enjoy it, book a holiday, pay off a bit more of the mortgage and then have a bit of fun.

KellyHopter Sat 24-Aug-13 17:52:36

Shall we move away from that particular can of worms?, lets not spoil a lovely thread.

ExcuseTypos Sat 24-Aug-13 17:58:46

OP- how many people are giving you the gift? If its 2, they are allowed to give £3000 to each person, tax free. So if there are 4 of you, one will give £12,000 and so will the other, giving your family £24,000 tax free. smile

(Cat next time your H calls you that, I would remind him how utterly offensive he is being)

fussychica Sat 24-Aug-13 18:00:22

Just don't blow it all - some yes - all no.

As you have a mortgage I assume you'll have mortgage indemnity with it - if you have then personally I wouldn't bother with life assurance but that's just me.

ivykaty44 Sat 24-Aug-13 18:05:22

I think I would want to make life easier for a few years rather than possibly spend the money now. I would want to know how much I would save on the mortgage each month if I paid of 28k. So I went and used a mortgage calculator and stuck in 150k at 3% to see the repayments were 1047 per month over 15 years, then I knocked of the 28k and the repayments went down to £852

So I would pay of 28k of the mortgage and have 2k for holiday and a good christmas.

As having someone put £200 extra in my bank every month for the next 15 years would be lovely. Or as the above poster says pay of the same and reduce your mortgage quicker.

Thing is it means over 15 years you would save 36000

obviously you may have less time left to pay of your mortgage, but if you had more time left you would make more money. If you interest rate is more again you would make more money

Stripedmum Sat 24-Aug-13 18:15:06

I'm shocked at the good advice on here. It makes me feel quite appallingly bad with finances.

Excusetypos - yes two people! I didn't even think of that and I doubt they will have either. Excellent advice we can really benefit from.

The other idea was to just do a few things to really change our home for the better but that wouldn't cost a ridiculous amount. Like knocking the wall down between kitchen and dining room to give open plan effect and converting garage.

I know this is a totally indulgent thread but I hope others have been given food for thought too. We feel really lucky smile

Where are these high interest savings accounts whereof people speak on here?!

OP, it sounds as though you have your head screwed on. We had a little windfall last year ("only" five grand, but it saved us at a very tight time) and now 'tis practically all gone, but I will never forget the heady, giddy joy of receiving it. I can't imagine what 30k would be like!

catinabox, thanks for the reply. I did ask! Your husband is a cheeky sod and his ears need tweaking. I say that as a partial Jew myself. smile And that's all that needs saying about that.

heidihole Sat 24-Aug-13 18:20:30

OP before you start planning too much...just have a think about mortgage overpayment.

Use a calculator like this one www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

I put your details in, £195,000 mortgage and guessed an interest rate (3%) and it said if you paid £30,000 off the mortgage you would save £28,000 in interest alone and knock 5.5 years off the term.

A saving of £30k in interest effectively would double the money you had been gifted. You'd be dropping your final mortgage payment by £60,000

Something to think about (but check terms of mortgage etc etc to see if you can over pay without penalty.)

heidihole Sat 24-Aug-13 18:21:11

loads of people beat me to it!!

15 grand savings.
5 grand doing up the house/garden, replacing electrical items etc.
10 grand to spend on a fabulous holiday.

Purple2012 Sat 24-Aug-13 18:24:16

I would clear a loan and then use the rest to reduce the mortgage. I would immediately see the benefit as I wouldn't have the loan re payment and the mortgage would be less so I'd be a few hundred better off each month.

catinabox Sat 24-Aug-13 18:26:45

The other idea was to just do a few things to really change our home for the better but that wouldn't cost a ridiculous amount. Like knocking the wall down between kitchen and dining room to give open plan effect Oooh that i approve of!!

Open plan is lovely and not frivolous at all. It's great being able to sit round a big table with all the family.

maltesefalcon me too. and yes i will. no more shall be said.

ivykaty44 Sat 24-Aug-13 18:28:49

Yes please can you point me int he direction of high Interest accounts as at the moment the only high interest rates I can find are below the rate of inflation and therefore losing money...

ExcuseTypos Sat 24-Aug-13 18:57:57

And another thought regarding tax OP.

They are allowed to give £3000 (ish) per tax year to each of you, so they could give £24,000 this tax year and £6000 next April.

marriedinwhiteisback Sat 24-Aug-13 19:05:39

Re gifts and tax I believe an unlimited amount can be gifted and there will be no tax liability providing the giftor is still alive seven years later. If they die in the meantime a calculation is done via probate on a sliding scale with some of the liability knocked off for each year the giftor survives having given the gift.

ivykaty44 Sat 24-Aug-13 19:17:59
maleview70 Sat 24-Aug-13 19:37:20

Don't worry about the tax issue. An individual can gift whatever they want. The only time it may become a problem is if they die within 7 years and their estate including gifts over the £3k limit take them over the IHT limit.

Runningchick123 Sat 24-Aug-13 19:47:58

I would pay the vast majority of the money off my mortgage. I have a flexible mortgage so could redraw the money in the future if I had any financial difficulties, but at least i would have benefitted from paying less interest in the meantime and have the security of knowing that I could not pay the mortgage for a while without problems if there was any redundancy etc.
I would use the rest for a family holiday.
Sorry if that makes me sound very boring and overly sensible.

FatAssPantaloons Sat 24-Aug-13 19:54:02

Congratulations on your windfall.

Please don't buy to let. It's exploitative of others' need for a home, it distorts the property market (inflating prices), & it takes affordable homes even further out of renters' reach. Buy to let both feeds off and makes worse the gap between owners and renters. It's immoral, end of.

FatAssPantaloons Sat 24-Aug-13 19:55:41

The house someone lives in should be primarily their home, not a nice little earner for someone who's wandered into being a landlord cos it pays better than an ISA.

stopprocrastinating Sat 24-Aug-13 19:58:16

Savings. Used up our rainy day money after redundancy. Need to top them up again, starting from £500 overdraft.

OldMacEIEIO Sat 24-Aug-13 20:01:49

one third into savings (or pay off debt)
one third invest in the house
one third pee up the wall

Very dull here but what savings rates at an appalling low, young children who would love a holiday but not appreciate the difference between 2 weeks, 5 star USA Disney and a long weekend Disneyland Paris and camping, I would be using the bulk to clear s chunk off the mortgage which frees up money long term.

An emergency fund is a good idea, extension, new kitchen and/or bathroom of needed.

If I was in the situation you have described. I would have £3000 emergency savings, £1000 holiday and the rest for mortgage/home improvements.

The monthly reductions in payments I would plough back into my mortgage repayments.

Check out houses on your street, have others extended, at what cost and what added value to the house. If you plan to move in 5 years an extension may not be worth it in the long run.

Very dull. Am very happy for you. Everyone deserves luck like this at some point in their life.

This £30000 may affect your tax credits (if you claim) .... Look that up too. Sorry.

GangstersLoveToDance Sat 24-Aug-13 20:12:27

I would put £10k into our wedding fund for next year so that was sorted.

I'd spend £10k on our house - re-dashing needs doing, the gardens could do with a lot a bit of work. Inside i'd decorate through and finish the partially converted loft.

The remaining £10k would go into savings. We do have some debts but the payments are manageable and they are coming down nicely - i'd rather put the £10k in savings and think about what to do with it.

Murtette Sat 24-Aug-13 20:37:13

I agree with putting enough in savings to cover 3-6 mths outgoings (in this climate, no one's job is secure) and the rest on mortgage UNLESS you think you may have to change your work pattern when your DC start school as you may need more accessible savings to cover that if you're only just breaking even each month now.
And whilst my understanding is also that someone can give you as much as they like provided they live for 7yrs, if the money isn't needed immediately, I'd prefer to stay within the £3k annual allowance rather than spend the next 7yrs wondering if I was going to get an unexpected tax bill. If you do chose that route & these kind people each give £3k to each of your daughters, I'd check whether there are limits on what you can do with that cash.

Mumoftwoyoungkids Sat 24-Aug-13 20:47:16

I don't think that the Op will have to pay tax on her money whatever - it will come out of the estate. (So whoever is left "the remainder" which may be the Op but then she'll have the rest of the estate to pay the tax with.)

But note that the £3000 is the total each person can give - not the total you can give to a person. You can carry forward from the tax year before though - so if they gave nothing last year then the first £6k from each person ie £12k in total is not affected.

NonnoMum Sat 24-Aug-13 21:04:33

Congratulations. We have a similar dilemma. Only ours is 2 grand!

I want to get Premium Bonds but DH wants to put it in a High Interest account...

itshotintexas Sat 24-Aug-13 21:28:16

Read what Martin Lewis says about premium bonds for those thinking about them.

StoicButStressed Sat 24-Aug-13 21:53:14

Hey OP

Firstly, congrats; am super happy for all of yousmile

Secondly, please feel 'honoured' as I haven't posted for aaaggggggeeesss as was (genuinely!!!) bloody addicted to MNblush

However... I've seen thread and can't cut & run (although I'm not sure you'll love what I'm going to write!)

I I were advising you professionally, then the below (will even bullett it report stylee for you grin - then THIS is what I would advise.

1: You are in an amazingly fortunate postion, do NOT fuck it up! (No, I wouldn't write that in a proper professional assessment BTW!)

2: You've been super clear that, micro (monthly) and macro (overall), that you are verrrreee close to the wire (window cleaner, "don't even have spare £100 etc").

3: Given that, that shapes your choices (or rather, what you should actually DO..) HUGELY.

4: You have £40k equity alongside a mortgage of £195. That is a, frankly terrifying and even more so in today's climate, a pretty perilous ratio. Bluntly put, your equity is less than 20% and your mortgage a shade over 80% of your home's value.

5: Putting together points nos. 2 & 4 paints a reality of you being very close to shit street (no, I wouldn't use that term in a report either!) in event of DH losing job, or one of you falling ill. You would or could lose your home in a matter of few short months if anyting like that occured.

6: Before you spend anything, you MUST, as others have said, check the tax position to ensure you don't spend it and then find yourself in debt to HMRC for CGT (Capital Gains Tax).

7: Before you ACCEPT the money into one of YOUR 'named' accounts, then ditto re above if you are in receipt of tax credits etc.

8. Thereafter, what I would advise is that you do a split of splurge and sense.

9. I'd 'allow myself' (in your overall financial position as described by you) 10% of it, so £3k on 'fuck it' money - IE the 'splurge' bit. I'd aim to use that on something that CONTINUES to gift you 'splurge' fun. IE, I would go nuts on the very best and most lux set of camping equipment possible (remember to factor in costs of trailer and tow bar!), as THAT would be the self-gift that keeps on giving - ESP. with 2 very young DC's. Did this when mine were younger and once even travelled Europe for 4 weeks with them and had a total ball which, even though they have been on way more expensive 'single' holidays since, they DO remember as THE BEST TIMES THEY EVER HAD. So in one fell swoop, you will have secured your family holidays for a pretty long time.

10. Would echo (with a bloody loud speaker emocion if MN had one!) what other posters have said about 'emergency' money. General rule of thumb is that if anyone possibly CAN, then they MUST have 3-6 months of their 'normal' living costs in an account. Your best bet would be a high interest (this is though a very relative concept at the moment) account but which also is accessible - do NOT tie this 'chunk' of cash up in an account that will penalise you if you DO need to access it.

11. Would echo (again..) other posters who have said use the balance after the splurge and the emergency account (I obviously don't know how much that amount would be as don't know your normal monthly income and outlay) to draw down the mortgage. SOLE caveat to that would to check that you won't be unduly penalised for that, although would add that even if T&C's of your mortgage say you WILL be, then speak to someone senior from your Lenders as sometimes they will be flexible.

12. Given the potential tax issues, would where poss, get the 'givers' to pay as much as poss direct - IE bypassing your current account/s - so if doing say the camping thing, get them to directly pay it. My guess is even if they are giving it to you to help solidify your future, they will understand that splurge, ESP. as it itself is an ongoing investment in terms of holidays for you all (& the savings you will make by NOT having to pay for the holidays you might have tried to take).

13. Would caution you to think carefully before entering an 'attachment account'. They do work brilliantly but ONLY for those who maintain their normal monthly expenditure (as the 'access' works both ways, IE have seen people who have actually ended up increasing their mortgage as have seen the 'balance' on that account as 'spendable' income).

14. Emphatically would take out life insurance (& also use some to fund drawing up a will if you/DH have not yet done so).

15. Under no circs would I advise you to even think about buying a flat for Buy to Let. Bluntly, you can't afford it AND it's risk-laden

16. The only other option I would suggest investigating other than using the amount above for drawing down your mortgage would be looking into an extension, but ONLY if it is an extension that - as an absolute minimum - adds the same value to the house as the amount of cash you'd spend on it (the ideal, obviously, being an extension that DOES actually ADD value as opposed to being cash neutral as per above). There are so many house re-modelling options that do NOT even end up cash-neutral, I.E. the added value being LESS than the amount spent on it, so do your homework first via 3 or 4 of your local estate agents AND stalking Sarah Beenygrin

17. Lastly, beware of going to an 'independent financial advisor' - one, as it itself costs money [I know, no shit Sherlock huh?wink] and two, many of them are NOT 'independent' anyway, and 3, a fair few of them are not exactly great (no offence to anyone on here who IS a financial advisor and IS a good one!)

18. In summary, do NOT do anything rash - other than the amount you decide IS your 'fuck it' fund to splurge with - and would suggest you see this as not just the awesome gift and opportunity it is, but also as your opportunity to get more financially savvy. Don't be scared to do that (know sounds like dumbest statement ever, but reality is that many peeps ARE 'scared' of learning about finances etc and see it as some giant brick wall when it's really not. Is exactly the same as any other subject that any of us might not know much about, as is the solution - IE go learn it!)

And VERY lastly, your new best mate here is going to Martyn Lewis's site www.MoneySavingExpert.com - there is literally NO financial subject or aspect that you won't be able to either learn or get advice on there.

Good luck (& congrats again!) x

StoicButStressed Sat 24-Aug-13 21:55:17

'1: IF I was advising you professionally' even..

It's Saturday so I'm blaming the Pinot wine for all and any typoswink

Stripedmum Sat 24-Aug-13 22:04:39

Thank you Stoic! That was really thoughtful and I've tried to absorb all of the advice.

So...can we still get the extension?! Are you saying to ring a few agents, get them round and ask to see whether what we have planned would actually add value to the tune of the 30k (or £25k if we tuck a bit away for emergency)?

AnotherWorld Sat 24-Aug-13 22:07:57

Fab post stoic

vintagecakeisstillnice Sat 24-Aug-13 22:16:29

WOMEN GET LIFE INSURANCE

Not just you OP but in general.

SERIOUSLY DO IT NOW!

Think how much chilcare is
Think of it on one salary.
Think of all the wifework you do, not pushing any agenda here, but how much anyone has to pay out to do the incidentals.

Life insurance won't cover all of it but it will help. . .

ChippingInNeedsSleepAndCoffee Sat 24-Aug-13 22:25:09

stoic - good to see you smile - you have been missed!!

BlehPukeVomit Sat 24-Aug-13 22:28:24

Brill post stoic.

noblegiraffe Sat 24-Aug-13 22:35:43

Can someone please clarify why spending some of the gift might end up liable for Capital Gains Tax? I'm going to be in a similar (but not as generous!) position next year. I read the HMRC website but didn't really understand why it might apply here.

I understand that the gift itself doesn't incur tax, unless the giver dies within 7 years.

ivykaty44 Sat 24-Aug-13 22:38:37

I have life insurance until my youngest dc reaches 21 as it wouldn't be fair of me to die and leave my eldest dd to pick up the pieces - so there is a small amount index linked to cover roughly 7 years or bill paying and taking into account the bills going up and having to pay tax on inheritance. This would include an au pair and a car.

My eldest is 21 and I really wouldn't want to shit all over here by not having a will and an insurance policy

Mimishimi Sat 24-Aug-13 22:41:25

We've paid off the mortgage so we'd probably put half towards a holiday and half towards investments. That's if it was an unexpected sum. If it was an expected bonus from work etc, probably most of it would go to investments.

goforthejobular Sat 24-Aug-13 22:42:29

I would put down a (very small) deposit on a flat. I have no other chance of ever owning a home. That would take all of the money.

sarahtigh Sat 24-Aug-13 22:51:51

the priority is getting rid of debts except mortgages and sometimes student loans you say you have none so

an emergency fund of 3-6 months normal expenditure( include food and petrol not just bills etc) must come before an extension; holiday or anything it is really important

candycoatedwaterdrops Sat 24-Aug-13 23:07:07

Catinabox's husband sounds like a cunt....and not in a good way.

Back to the OP though, congrats! You've had some great advice, hope it helps you make a decision.

Angloamerican Sat 24-Aug-13 23:58:41

Agree completely with stoic. At risk of sounding a bit Catherine Zeta Jones, £30k is really not that much money. Given your financial situation, I would save/spend down the mortgage. Forget the extension and cap your holiday/present spends at $2k. Give yourselves a bit of a financial buffer and peace of mind.

And congrats!! I envy you!

StoicButStressed Sun 25-Aug-13 00:51:41

SHOUTS.... REALLY FUCKING LOUDLY!

StripedMum....THIS:

Stripedmum Sat 24-Aug-13 22:04:39
Thank you Stoic! That was really thoughtful and I've tried to absorb all of the advice.

So...can we still get the extension?! Are you saying to ring a few agents, get them round and ask to see whether what we have planned would actually add value to the tune of the 30k (or £25k if we tuck a bit away for emergency)?

OR, MORE SPECIFICALLY,- THIS BIT:

(or £25k if we tuck a bit away for emergency)?

if.

IF.

IF

IF.

IF?

IF?... WTAF???!

You are MORE than welcome re advice, but you have my UTTER word that if 'IF' is ANYWHERE in your thinking wrt to the 3/6 months fund, then I won't be offering any more [& I mean that in a really really REALLY nice way smile]

<thread will be watched with a beady eye...:->

And Anglo is wholly correct BTW in her summation of what £30k is right here, right now and especially in context of rest of your financial landscape (just flagging that before a possible predictable barrage of retorts to her..)

CorrineFoxworth Sun 25-Aug-13 01:23:15

Way to make a comeback StoicButStressed. I didn't realise you had taken a break but I'll never forget you now! I see neon lights and fireworks all over the thread blush

Pitmountainpony Sun 25-Aug-13 01:41:55

Mortgage and a cheap holiday. Save 5 k for emergency fund.

NoComet Sun 25-Aug-13 01:47:45

New kitchen, mortgage.

Prob divide into 3:
£10K rainy day fund (never had one and constantly panicking about paying mortgage should anything happen)

£10K into mortgage to reduce the term

£10K traveling (prob £7K to kick start our 3month trip round South America planned for 5yrs time, £3K on a US touring holiday - we live in US so don't need to factor in initial travel costs)

Lizzabadger Sun 25-Aug-13 05:14:05

So pleased for you!!!!

£1K family treat
£5K emergency fund
Rest - mortgage

jessieagain Sun 25-Aug-13 05:33:50

With £30 000, I would book a big holiday for this year and next summer.

Then i would give my dp and myself £500 each to blow (he would buy gadgets and I would buy new wardrobe and makeup).

I would treat ds to some new clothes an toys (£200).

Then I would spend/invest the rest in something sensible, extension in your case sounds sensible.

Quodlibet Sun 25-Aug-13 06:10:40

When factoring cost/benefit of extension, surely it depends if you would outgrow your house and need to move otherwise and if so what the full costs of moving would be - one of the benefits to my mind is that you would avoid the £10k costs associated with moving, which never seem to get properly accounted for in the whole 'moving up the property ladder' thing.

Say you have a 2 bed house and 2 children so need a three bed.
Scenario one: Spend £25k on an extension which agent reckons adds £20k of value to your house.

Scenario two: Sell house and buy a bigger one with third bedroom at (optimistically) £20k more, pay £10k in estate agent fees/legal/tax/moving costs.

Quodlibet Sun 25-Aug-13 06:11:52

Making that point generally about extending/moving, not saying you should spend £25k on extension OP.

VoiceOfRaisin Sun 25-Aug-13 10:06:56

Stoic gives sound advice.

One clarification only: there is no tax to pay for the recipient of a lifetime gift. There is only Inheritance tax anyway if it is someone old (ie someone who dies within 7 years) and rich (over the IHT limit) giving you the money, and even then it is the estate that will have to pick up the bill. There is no question of CGT.

Disclaimer: I know nothing about tax credits so also recommend you check that out.

Stripedmum Sun 25-Aug-13 10:12:55

Okay - no if. I promise.

Back2Two Sun 25-Aug-13 10:34:17

This is a great thread. Thanks for that post stoic it's great to read and has got me thinking about my own finances despite not having just received 30k

Big congratulations to you OP!! With all this great advice hopefully you can find a nice compromise!

Silverfoxballs Sun 25-Aug-13 10:54:14

You do seem quite extension obsessed.
How many bedrooms and bathrooms do you have?
Are you in a semi or detached?

What kind of extension do you want?

Having chatted to builder mate he said it can be pretty negligible when it comes to recouping costs of an extension on semi detached houses. We considered this but was not worth it.

CorrineFoxworth Sun 25-Aug-13 11:15:31

Er, not sure why I put a blushing face on my post about Stoic's excellent post. It was supposed to be a grin because it was such cracking advice so passionately expressed!

Got me thinking about my situation too - thanks Stoic.

AnotherWorld Sun 25-Aug-13 16:10:55

£5k doesn't seem enough for a 3-6 month fund. Surely you'd be thinking at least £10. For us we'd be thinking £15k minimum as a backup fund.

And agree again with stoic's second more sweary post too.

sarahtigh Sun 25-Aug-13 17:04:38

it depends on their expenses our basic living costs are about 1,250 a month so 5K would be 4 months asthere would be no tax

a 30,000 gift is tax free if donor lives 7 years; if they do not inheritance tax is only payable if estate is worth more than 320K it is on a sliding scale as well so if live 3 years you pay X live 6 years considerably less etc so if the donor is unlikely to be paying inheritance tax no worries if they are then certain allowances still apply

if you are on any means tested benefit you have to declare it unfortunately but not if it is not it will not affect your weekly child benefit or contributes to childcare costs if you get them
you would no longer be entitled to free school meals help with council tax, prescriptions or dental treatment

Toohottohandle Sun 25-Aug-13 17:07:15

Bits for kids
Clothes for everyone
Lovely hol
Amazon spree

Jinty64 Sun 25-Aug-13 17:46:07

Congratulations OP. I hope you make good use of it. Lots of good advice.

Jumping on the bandwagon a little here but I have inherited a similar sum and plan to put it all towards paying credit card debt and mortgage. Could one of the experts tell me how this will affect my tax credits? We don't get childcare paid or free anythings just child tax credit.

sarahtigh Sun 25-Aug-13 21:15:46

the OP has stated that the people giving them the money are not giving it for a good holiday etc but so they can make their lives better long term they are expected to be sensible with money they do not actually have it yet

MummytoMog Sun 25-Aug-13 21:50:54

We redid our loft conversion with a similar amount of money that was an inheritance. If we hadn't been doing that then we'd have paid off a chunk of our mortgage so we could clear it quicker.

ShakeAndVac Sun 25-Aug-13 21:57:50

That'd pay off the rest of our mortgage so I'd pay that off and be mortgage free! smile

MacaYoniandCheese Sun 25-Aug-13 22:01:24

Big houses are overrated. More to clean, decorate and maintain! Buy the kids a fabulous gift each and put the rest on your mortgage.

flowers.

jamdonut Sun 25-Aug-13 22:06:53

We had that sum of money when my husband had an accident at work. It was the first time we had any money too.

We were so careful,paid of some debts, bought a newer car,and a few other things,but gradually it got eaten up by fuel bills etc.

It finally ran out this year (took about 5 years). I really wish we'd paid some of our mortgage off,and paid someone to do our kitchen and bathroom. Now we are back to struggling again,having lost the security of the 'safety net'. sad

catham Sun 25-Aug-13 22:11:31

spend it all on plastic surgery

MummytoMog Mon 26-Aug-13 00:16:06

Have now read whole thread and feel like I should point out that our old loft conversion was pushing our house down, and it really did have to be fixed sad I have all the shame now.

TheDoctrineOfPositivityYes Mon 26-Aug-13 00:26:38

Agree with Stoic.

OP, have you had any quotes for the extension? I don't know where you are in the country but I don't think we'd get much change from £30k for any extension where I am.

Stripedmum Mon 26-Aug-13 16:43:54

No quotes as yet.

We have a four bed detached and although that sounds fancy it really isn't - it's really quite small. It's 15 years old.

The 'problem' with extending is the garden ain't huge and ATM it's perfect for the size of the house.

Maybe we should just hold onto our guns and keep it safe! Kids have lived in a lot smaller happily!

marriedinwhiteisback Mon 26-Aug-13 16:55:09

Yes; I agree even a small 4 bd detached should be sufficient, safeguard what you have. When they're teenager you'll need an extra sitting room - and they won't need the garden for play.

LizzieVereker Mon 26-Aug-13 17:01:09

Oh how lovely, it's so nice to hear good news thanks

I hope you enjoy it, whatever you decide to do - it would be lovely to have a little emergency fund tucked away and you'll never have worry about the window cleaner again!

Stripedmum Mon 26-Aug-13 17:09:19

Thank you Lizzie! I have a feeling that the window cleaner thing won't even be resolved with 30k - we're so disorganised we don't even have a petty cash tin in the house!

LaVitaBellissima Mon 26-Aug-13 17:19:11

Congratulations! Great post from stoic too!

ChippingInNeedsSleepAndCoffee Mon 26-Aug-13 17:21:40

Stripedmum - how do you think the 'giftgivers' will feel about you 'sitting on the money'? Will they be worried it will be frittered away if you don't build an extension/move/whatever concrete thing they can see? Would they, in that case, invest it in your name so they know it's 'safe' until you decide/need it?

I pay my window cleaner online smile

MissStrawberry Mon 26-Aug-13 17:30:48

A 4 bed detached with only 2 children. Why on earth do you need more space?

You have no spare money yet you are focussing on spending most of it doing something you don't need but just want.

If you are so skint you can't find an extra £100 I really think you should be looking at sorting yourself out not spending it on holidays and extensions.

Stripedmum Mon 26-Aug-13 18:12:45

Hi miss strawberry - like I said; small house. It's smaller than every single one of our friend's three bed semis.

Gift givers fine with them looking after the money until we decide what it is we'd like to do with it.

Stripedmum Mon 26-Aug-13 18:15:31

Also we weren't considering a holiday!

MissStrawberry Mon 26-Aug-13 18:18:49

I am just gobsmacked that a 4 bed house could ever be described as small.

Stripedmum Mon 26-Aug-13 18:26:36

Small was the wrong word to use. Not spacious probably better.

Stripedmum Mon 26-Aug-13 18:29:46

A traditional three bed semi would be a step up the property ladder.

whois Mon 26-Aug-13 18:41:08

Depends person to person.

I'd probably bank all but £1k towards a deposit for somewhere decent in London. The £1k I'd spend on some new clothes - could do with a couple of new work suits and associated stuff.

That's not really very exciting though.

BikeRunSki Mon 26-Aug-13 19:21:41

We inherited £30k two years ago. I was expecting dc2. We did

£2k for stuff round the house
£7k each for each child, for mortgage and for holiday. Then DH got made redundant and we used the holiday money for living expenses. We decided that his grandma (who left us the money) would rather I spent more time at home with the DC than go.back to work when DD was 4 months old and have a holiday

foreverondiet Mon 26-Aug-13 19:29:09

I would put it into mortgage... Make it easier to move up in a few years - wouldn't spend on extension unless really needed the space. It isn't really that much money so wouldn't start splurging on holidays etc. we were in similar circumstances with inheritance and we paid every penny into mortgage - increasing financial security for us as a family.

sarahtigh Mon 26-Aug-13 19:40:21

is it the type of 4 bed that is 2 singles and 2 doubles when at least 1 bedroom is over garage so the square footage of bedroom space is much greater than living space, 4 beds is plenty with 2 children buy maybe you just lack living space I reckon for comfortable living you need 2 reception rooms plus decent kitchen or the equivalent of if open plan I do not think unless you have to a kitchen diner with 1 living room is enough space if you also need space for home office and the kitchen dinner is really not big enough to have a table seating six

can you reconfigure your existing space to make it work better, 2 DC's have 2 smallest rooms to sleep, you have largest the middle room becomes playroom with proviso that it can become guest bedroom with decent blow up bed and later an office/ study would you be better losing garage and parking car on drive and turning garage into playroom/ utility and then using smallest bedroom as office rather than actually building more

you say not paying window cleaner is at least in part disorganisation maybe you should spend a few pounds on money management books/courses etc

Stripedmum Mon 26-Aug-13 20:09:36

Ha ha! We definitely need a 'money organisation' course! We have been doing a LOT better though since DCs came along.

Yes integral garage. Yes more space up than down, which is where we need more. I looked at a house today and it really made me appreciate what we already have though. I don't think I could go through the stress of moving with two young DCs - and although we don't live in by any means an exclusive area it's nice enough and safe. Lots of families.

I'm being swayed to pay off some mortgage now and maybe 2k reconfiguring like you say Sarah. Knocking down kitchen walk to make it a lovely kitchen/diner. Also fancy making garage into a kind of games room. Not a proper conversion that would need planning permission - just a clear space with a bit if Lino down and a ping pong table. And maybe a door through from the kitchen into it. So we're getting the feel of an extension but not actually extending (and eating up precious garden).

I do realise this thread us swiftly becoming a very tedious me talking about my not-so-wondrous living arrangements. I apologise before I get flamed! How indulgent grin

sarahtigh Mon 26-Aug-13 20:25:01

so maybe new plan

1. 5k as emergency fund
2. 3-5k refiguring downstairs it will cost more than 2K as will probably need reinforced steel joist where you knock wall down
3. £500 decent lockable shed to put stuff presently in garage no point in good lock if a swift kick with a boot would break door
4. £500-£1500 treats if donors happy with this
5. 17-20K reducing mortgage
6. £500 reorganising and buying storage for house think floor to ceiling so you maximise floor space

unfortunately modern houses have been getting smaller ( now almost smallest in europe technically more rooms but still smaller) with less storage space

I think some of these 4 beds like yors are not truly 4 beds as you can not get bed wardrobe and chest of drawers in each room, I've seen show homes like this beautiful double bed nice bedside tables lovely en-suite shower but it's only on looking second time you notice there was no wardrobe at all not free-standing not built in because if you put one in it would not be possible to walk around bed; as you said traditional 1930's semis have more space and probably 3 bed victorian terrace too but that would have no garage or parking

Stripedmum Mon 26-Aug-13 20:36:24

Sounds like a good plan! Now just need to convince DH. Treats are banned but I just don't think it'd be doing the right thing - and tbh it would be treat enough to have exciting things fine to the house. Maybe some more premium binds for DS and start an account for new DD.

Yes we grew up in a traditional semi and it was a lot bigger than this. Huge garden too. I'm always drawn to them as they're so solid and just lovely family homes. Quite right re. shoehomes and their 'tricks' if putting no furniture in the rooms. Have also seen so called 'detached' houses with literally one INCH between them! You can't even get a person between them!

Stripedmum Mon 26-Aug-13 20:36:53

* aren't banned

Stripedmum Mon 26-Aug-13 20:37:58

Oh God - really should have read that post through. Apologies.

SeaSickSal Mon 26-Aug-13 20:39:12

If I had £30k I would use it to buy into a shared ownership scheme hopefully.

Anything left over would be for my son.

I stand to inherit around £75k when a relative dies and she is in her mid 80s now.

I won't be able to afford a house outright with it and might struggle getting a mortgage even with that as a deposit as I only work part time. So hopefully then I will be able to get into shared ownership and put at least £30k away for my son so when he is older he will be able to by his own house, I don't want him to be unable to do it like I am.

Stripedmum Mon 26-Aug-13 20:41:18

That's lovely Seasick. Perhaps we should be thinking more about DCs than ourselves too.

BlehPukeVomit Mon 26-Aug-13 20:42:43

Isn't this a nice helpful thread. smile. I think the OP has been given lots of good advice.

Congrats op, really happy for you smile wine wine wine

I'll echo what other posters have said, that you've been given great advice, so no point in me saying the same.

Ooh I've had time to think and with dh and I, it would be:

£15,000 towards the pension pot, via high interest accounts/premium bonds isas etc

£10,000 on home improvements.

£3000 on a holiday, aaaaand...

£2000: £1000 each for dh and I, to treat ourselves.

BewitchedBotheredandBewildered Mon 26-Aug-13 22:04:25

Stripedmum, a fantastic opportunity for you all, congratulations!

Some of the best news is that you haven't actually got your mitts on this money yet! The givers are not only generous but also very, very wise.

I think you should read this thread through very calmly and make notes. And research everything carefully, as the gorgeous Stoic said, (in among the rest of the sparks and rockets!) this is a good opportunity to learn how to not be shite with money.

It really isn't a huge amount but it could make a big difference to your lives for a long time to come. So plan really carefully.

The only idea i will throw in that I don't think any one has suggested is that, if you need more space, now or in a couple of years, I think some of the stand-alone garden rooms are cheaper than an extension.
Yet more for you to research!
Have fun planning.
And don't have rows about it!

BewitchedBotheredandBewildered Mon 26-Aug-13 22:06:15

Stoic lovely to see you on form smile
xxx

Stripedmum Tue 27-Aug-13 07:10:31

Thank you Bewitched! The kind wishes of everyone has been lovely.

Stripedmum Sun 08-Sep-13 14:13:35

Hello everyone. I thought people may be interested to know what we've decided to do with our lovely pot of money: nothing!

The gift givers are keeping hold of it for about a year until we decide what we really want as we don't 'need' anything right now and are happy. The thinking is though that we will then decide if if it's a good time just to pay it off the mortgage.

Feels good to be sensible for a change.

Hope you all land a pot of gold soon.

stopprocrastinating Sun 08-Sep-13 15:44:24

Having experienced a redundancy, and been terrifically grateful to rainy day money and family help, I think you are doing the right thing.

ChippingInNeedsSleepAndCoffee Mon 09-Sep-13 00:18:45

It sounds like a good decision smile

In the meantime you can enjoy 'spending it' 200 times over grin

Oriunda Mon 09-Sep-13 08:46:54

Pay off whatever you are paying highest rate of interest on (prob loan). Then pay down 10k off mortgage. Save 10k .... Either fixed rate or stick in into a stocks/shares isa if you want potential higher returns and are happy with more risk. There are currently no high interest rate savings accounts over 2% so with a 10yr outlook you could consider equity. Remainder on extension.

ModeratelyObvious Mon 09-Sep-13 08:51:41

You may want them to gift you both the gift aid limit in this tax year (£3k I think) and put it somewhere inaccessible.

Oriunda Mon 09-Sep-13 08:56:18

If you put money into pension pot, do it in a tax advantageous way via a SIPP for eg whereby you only pay 80% of the total and the government puts in the remaining 20%. So you pay in 8k and the govt puts in 2k (assuming you are basic rate tax payer).

Oriunda Mon 09-Sep-13 09:00:45

Moderately makes good point .... How old are they? If getting on in years and there's a chance they may not survive 7 years, they would be better off gifting 3k each (they are a couple?) to you this year, putting it into a fixed rate 1-2yr bond, then doing the same next year. Other suggestion would be to save whole amount in a fixed rate a/c in your names now. Lovely gift, but it's not yours until the funds are in an a/c in your names.

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