What would you do with £40k?

[Reesescheeses]

I’ve just been gifted £40k. I’m feeling very very lucky and grateful to put it mildly. I need to think of how to use it.. how much to put in savings, how much to spend on things like doing up the house, holiday etc. Just curious what others would do?

as you say you are doing OK I assume you have no debts apart from mortgage, you have an emergency fund suitable for the level of risk of losing your job, you are both enrolled in pendion schemes
putting the whole 40K to your mortgage would reduce it by about £250-300 per month depending on the rate
putting £30k to mortgage will make you £200+ a month better off then 5000k in a holiday fund and 5k to savings
being £2-300 a month better off relieves a burden it can be saved for whatever
kids will remember a £1000 camping holiday as well as a more expensive holiday in terms of the long term a holiday every year with parents will make more memories than just one splash out holiday

So do you just work and pay bills? That sounds like a waste of your youth.

Get a boob reduction

Depends on how much overpayment you’re allowed.

You could hold on to a chunk in savings and then pay off a lump sum and remortgage when the fixed rate runs out if it’s more than you can overpay.

Nothing exciting but it would be life changing. How lucky, and lovely for you.

1/4 my children
1/2 my mortgage
1/8 towards house moving costs
1/8 for fun/holiday.

normally you can pay off 10% each year without penalty, there is no point in doing it now if not credited until next september, there are several accounts paying near 5% interest so put it in there for now while you consider your options.

Pay our mortgage off!

Check for any early repayment penalties. Some info here. And I'd keep some in easily accessible cash.

https://www.unbiased.co.uk/discover/personal-finance/budgeting/low-interest-rates-save-or-overpay-on-my-mortgage

It would be my holiday fund.

build an extension on our house, holiday and savings.

You’ll have an early redemption penalty if you’re in a fix.

you might be able to see in the app but you want to know

• what’s the penalty
• how much interest do you pay monthly
• how much can you overpay without penalty

once you know that into you can make an informed decision about how much to pay off.

ideally, you want 3 months expenditure in instant access cash.

Other considerations are:

one of our cars has only got a year or so life in it yet. We will need to buy a new one soonish.

By the end of the year we will be £500 per month better off because of not paying childcare

we are both climbing up the career ladder and likely to be earning better in a few years

I'm not as sensible as most on here. I'd spend it on current home improvements/new kitchen and pay off overdraft.

Take your kids on holiday if that's what you would like!

I was lucky enough to be in a similar situation this year with inheritance. I had eight months to plan and be happy with my final choices. We paid off a student loan, maxed out our S&S ISAs as our mortgage is quite small and 4% rate so not too onerous, that gives us options in future for education, and have been able to donate to causes and treat family.

I’d use it to pay off mortgage or if work needed doing on the house. Possibly treat myself to a holiday too but I think home stuff is more important to me.

Make an overpayment on my mortgage x 2 , it’s 10% a year without any penalties.

Some for doing up the house, some for a nice (but not extortionate holiday) and the rest paying off a chunk of my mortgage at renewal to reduce the monthly costs.

It would pay my remaining mortgage off and leave enough for a holiday

Assuming you’re in a fixed mortgage but can overpay a % of the capital each year up to a limit, I would over pay that amount to reduce the amount the mortgage is going up by then use the rest to pay off any loans etc or do work on the house but I work with people in debt so would do all the sensible things 1st

If I were you I would save 5k for each child (junior Isa or something they can't access till 18/21), pay 10k off the mortgage, spend 5k on whatever you like and save 5k.

Sounds like you will need some money for a car soon so maybe you could use some of this money for that.

I'm all for having a nest egg but after loosing a parent when I was very young I'm all for living & enjoying in the present.

You could always start over paying your mortgage once you stop paying so much in childcare.

Personally, in my current circumstances, I’d put £15k on a decent car, 5k holiday fund for 2 nice holidays and 20k in savings for a rainy day. Oh what a dream!

You need to ring them to find out if there are any penalties for overpayments. Some mortgages will only allow 10 percent per financial year so up to the end of March.

I'd sink it into house renovations, plus keep some back. That sort of money would go a long way towards a loft conversion, though would need a top up.

Home improvements
Garden landscaped
Car
Holiday.

Anything left pay off the mortgage. Not everyday you get money like that, enjoy it.

Mortgage is paid off now so I'd keep £10k for me, DH and Foster son to have a fab holiday. I've always wanted to go to see the Boxing Day ashes in Australia. It's in 2025/26. I'd gift £10k to each of my 3 kids to pay off their mortgages. I do regular gifting to them anyway.