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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask how you would spend inheritance?

95 replies

Username9876547 · 20/05/2018 18:15

If you inherited a good chunk of money, say £100-£150k from a relative, how would you spend it? If you still had a mortgage to pay, would this be your first priority? DH is due inheritance and we were considering purchasing a new car to replace his ageing Ford and perhaps having a once in a lifetime holiday for us and the DC, but it feels slightly wrong to spend money that a relative has saved on something so frivolous. WWYD?

OP posts:
CPtart · 20/05/2018 20:08

I inherited about £150k last year. We paid off the mortgage (was only £30k left), bought a new much needed car (£10k,) put £10k in premium bonds which has won me (very luckily) just over £1k in four months, and am drip feeding the rest into stocks and shares for me and DH with the aim of being able to retire, from nursing anyway, at 55 in several years time. So more long term benefit really. Luckily DH earns well and we already enjoy a few holidays a year so don't feel the need to splurge.

thatwhichwecallarose · 20/05/2018 20:13

I’m going against the majority and actually saying I wouldn’t pay off the mortgage. In fact we inherited some from my DMIL a few years ago and have it sat in savings until we know what to do with it. I just know that personally I wouldn’t save the equivalent of the mortgage every month if I cleared it (we don’t have enough to clear it 100%) and I don’t want to waste it. We also have £25k for each DD in Trust. We did buy us both new cars though.

ForalltheSaints · 20/05/2018 20:14

A larger house if that was possible.

ilovesooty · 20/05/2018 20:17

I inherited from my mother's estate last year. I was renting an absolute dump as a result of my divorce and I did exactly what she wanted me to do - bought a house outright.

I'd use it to pay off the mortgage.

Original poster
Username9876547 · 20/05/2018 20:25

Paying off the mortgage just seems like the sensible thing to do, and I can’t imagine the relative we’ve inherited from would be over the moon about us spending their hard earned cash on a holiday.

But OTOH, life feels hard atm and I think a holiday for us and DCs to enjoy would really lift our spirits as we haven’t had holidays since having DCs.

So I suppose there’s no right answer. It just doesn’t feel ok to spend someone else’s money on holidays and cars though.

OP posts:
User467 · 20/05/2018 20:26

You'll be paying so much interest on you mortgage that paying a big chunk off will dramatically reduce how much you'll pay back. You could prob pay off £100k and then get that back again with how much you'll save

LakieLady · 20/05/2018 20:30

We've paid our mortgage off now, so would use it to buy somewhere rural with an annexe that we could use as a holiday let to generate some income and semi-retire.

It's 3 years till I can get my state pension and I'm bloody knackered.

coffeeagogo · 20/05/2018 20:30

That would clear my mortgage and leave enough to pay off my student debt. Would be amazing! I'd have such freedom to do so many things.

Unfortunately is just a pipe dream - no one to inherit that kind of money from and no one I don't love too much, even if they had it, that I'd want to (appreciate no one wants to, but you know what I mean....)

Cannockcanring · 20/05/2018 20:31

You'll be paying so much interest on you mortgage that paying a big chunk off will dramatically reduce how much you'll pay back. You could prob pay off £100k and then get that back again with how much you'll save.
A compromise would be to move to an offset mortgage, and just keep the money in the account offsetting all the interest. If you're sensible people (I.e. not prone to impulsive spending!), this allows you a lot more flexibility if you find you want to use the money in some other way, a couple of years on. But in the meantime, you won't pay any interest on your mortgage (assuming the sum is more than the mortgage, if it's less, it'll reduce the interest proportionally).

Storminateapot · 20/05/2018 20:33

We didn't get an inheritance but did get a critical illness insurance payout 9 years ago when I was diagnosed with cancer. Paid the mortgage off and bought a (second hand) soft top car.

Knowing that whatever happens we have the roof over our heads (and we have substantial house value we could borrow against if desperate) is invaluable to us.

The money we saved not paying the mortgage has also allowed us to save for home improvements (new kitchen & bathrooms) over the years, a decent family car and the odd nice holiday. It's just that we didn't do those all in one go but had the spare money each month to save for them.

SweetSummerchild · 20/05/2018 20:35

I would pay the mortgage as the priority - because the money saved would probably pay for a holiday within a few months

^this

We are going to be inheriting a sum of about this magnitude and will be using the majority of it to pay off the mortgage. We are very fortunate that the DCs will also inherit a similar sum, so we no longer feel obliged to ‘save for their futures’.

The money we have been using to put away for the kids and pay off the mortgage can then be used to save for holidays and put extra into pensions/long term savings.

Cars aren’t really an issue as DH gets a company lease car and has his ‘midlife crisis’ for the weekends.

bert3400 · 20/05/2018 20:48

My husband inherited £130k nearly 10 years ago . We split the money into half and put down a hefty deposit on our first house to buy and we started a business . We worked really hard to get our business going & we are now very comfortable and working for ourselves. Think very carefully what you will do with this money as it's once in a lifetime opportunity. I would invest in something that will generate an income if that possible .

FullOfJellyBeans · 20/05/2018 20:50

Spending 150k on a car and holiday would be outrageous (unless you're very rich) spending 20k on a car and holiday and using the rest for savings and getting rid of some of your mortgage sounds great.

ilovesooty · 20/05/2018 20:54

bert3400 that last point is a good one too I think. I'm self employed in addition to my job and I have a room to work from home now. As I no longer have rent to pay I'm considering dropping to four days to give myself more flexibility and free time.

Fairyliz · 20/05/2018 20:55

Look at it from the 'other' side. You have children when you die if you leave them an inheritance what would you want them to spend it on?
Be sensible pay off their mortgage or use if for fun?

NoSquirrels · 20/05/2018 21:05

I don't know.

I'd say "pay off the mortgage" because that is my first thought.

But, with £150K we could buy outright a small property that it would be possible to rent out in the future. So that would be a consideration. Neither my DH or I have brilliant pensions, and diversifying into BTL seems like it could be a good idea on a number of hypothetical scores at the moment.

I'd definitely like the security of having no mortgage payment at all, though. And being able to save that money towards holidays, pensions etc. It just seems as if such a huge chunk of money might be better spent in a chunk too, rather than the slow-burn of having to save up to get to the same position.

JaceLancs · 20/05/2018 21:28

I would pay off mortgage
Have new kitchen and bathroom
Few other household jobs done
A couple of holidays
An expensive piece of jewellery
150k would do that for me

PurpleTigerLove · 20/05/2018 22:49

Personally I’d buy another property to rent out .
If I had a mortgage I’d pay it off and use the mortgage money to buy a car .

reluctantbrit · 20/05/2018 23:11

Lump sum towards the mortgage

Some into long term saving for retirement

Some towards DD ‘s uni savings

Nice holiday

birdladyfromhomealone · 21/05/2018 00:42

dont pay off your mortgage as its the lowest form of loan.
with £150,000 Iwould but 2 buy to let properties using 75k deposit on each, rent them out at 7% yield - damn site more than your mortage or bank rate, invest the rental money and then sell when you retire, pay off your mortage with equity from the rentals and enjoy the surplus in your retirement.

DragonMummy1418 · 21/05/2018 07:16

Mortgage would absolutely be my priority.
That money doesn't depreciate the same way as it would a car.

You could also put 80k to the house and 20k to a new car.

stopfuckingshoutingatme · 21/05/2018 07:18

I wish 🙏
50 in mortgage
50 extension
50 savings

No treat ! Well
Grin Maybe one or two

DragonMummy1418 · 21/05/2018 07:19

With your mortgage being paid off, you are saving £££ each month which you can save for a holiday if you want.
Got to think in the long run here.

forumdonkey · 21/05/2018 07:27

Take the holiday and make memories with your family

holdmybeer · 21/05/2018 07:27

I'm about to inherit a decent amount from my mum's estate (If we ever actually get probabte but that's a whole other thread) we are planning to use the money to extend our home and allow us to have the much longed for 3rd DC. I feel it is an amazing gift coming out of such an awful loss and that my mum would be very happy for us to use her estate in this way.