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?

£40k is really lovely but won't stretch far.

Don't buy an expensive car, they depreciate fast.

A nice but inexpensive holiday.

A chunk off the mortgage.

Some renovations on the house.

The rest in savings.

Oh, and if you are staying in your house longer term look at energy saving options. We recently got solar panels and our electricity bills have more than halved. They will pay for themselves in about 7 years.

Take it all off the mortgage.

We're very lucky in that we have paid off the mortgage and done all the major renovations our house needed.
I would put £30k into our pension savings and spend the rest on a luxury river cruise. We have never had much to spend on holidays, I have been receiving treatment for cancer for the last 6 months and my DH has myaesthenia gravis, so if we don't have a big holiday very soon we will never have one.

This

Personally I would invest £20k in a stocks and shares ISA, with a plan to keep adding to it monthly with a nominal amount.

I would set aside some for a family holiday and put the rest in a cash ISA whilst deciding on next financial priorities I.e., home improvement, car, etc.

Could you put it in a high interest account and use the interest to over pay your mortgage while you think about it?

In our situation (affordable mortgage and enough savings that we could survive for 6 months if lost jobs etc) I would save half and spend half.

Half to go on bathroom renovations and special family holidays.

Half to go into savings or to be paid off the mortgage.

If it was me it would be 35k off the mortgage and 5k on a holiday. I suppose it depends on what needs doing to the house for you. Maybe split it, house, mortgage and holiday.

It would be a drop in the ocean of our mortgage

If the £500pm childcare saving offsets the increase in mortgage payments you can consider that net neutral

Car
I would keep £10-15k for a decent 2nd hand car (3years old prob an ex motorbility one with low mileage and low running costs)
Home
£15-20k home improvements - in a family of 5 a well designed spaces in a home makes a huge difference day to day.
Rainy day fund
Make sure you have at least £10k emergency fund
Holiday
Remaining money would be used to upgrade family holiday or do nice days out.

No we go on holiday twice a year but pay approx £2500 each time. I said we would not spend money on expensive holidays until we paid our mortgage off. Also we are on track to pay off our mortgage off within 8 years. So it's a very short time of focusing the majority of our income on it.

@Reesescheeses

Generally, not without paying fees.

Your agreement will tell you what you can pay extra each year. I think most are 10% of the amount initially mortgaged.

when does your fix end? You can pay as much as you like off then before fixing again.

in your position id pay off the amount I could without paying fees. Then take the kids on a nice, age appropriate holiday they will remember.

put the rest in savings that you can pay off the mortgage with each year until you end the fixed period.

maybe get a few things done around the house & treat yourself to something nice to remember the person you inherited the money from xx

@Torganer I love this.

Deposit for a house

Depends on your circumstances. If you’re happy in your current situation then use it however you want. If you want the money to work for you, you could invest in yourself through training / education. Or you could start a business and spend a % of it on marketing, or as a runway until profitable. Or you could use it as a deposit on a property…exciting times, good luck !