If you were given £20k

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if you were given £20k inheritance what would you do?

If you generally struggle in very hand to mouth existence, better off than many, I have no pension, we own a mortgaged house that isn’t really big enough, house also needs a fair bit of work done to it, DH has loan to pay for his car, I have student loan, my car is 13 years old.

Would you do up the house, move, or put aside to move? I’m worried DH will want to pay off his car loan to be debt free or just overpay mortgage, but I’m desperate to move so kids will have a bedroom each, and maybe even a second bathroom! I’m fed up with living on top of each other!

Breast reduction 10k for that,the rest would be for my son who's at university .

So you use the car too?
Why did you bang on about paying off 'dh' s car loan"

I am going to say something and I'm sorry if it sounds rude.

If you continue to up your lifestyle with every little money you get more, you're always going to struggle.

I feel ist a bit of a poor mentality to jump and buy a bigger house with every extra penny you have. Because that lifestyle change incurrs more cost. So you're always the one that can't afford a holiday, no pension, can't afford a car without a loan (which sets you back as opposed to someone who didn't need that loan), can't float through an emergency. Meaning you're always poor

The sensible thing that will in the long run make you better off, is to ensure that all debt is paid off(prioritise high interest rates) set up a rainy day fund, pension etc.
Even some repairs to your house, it adds value and bonus makes it nicer to live in.

Also how old are your kids?

Sometimes just when you think you will burst and definitely need a bigger house, is roundabout the teenage phase. So maybe a 15/16 year old, 13 and 10.

And in 2 to 3 years time the oldest will be out of the house, you just took out a massive mortgage, that probably won't be paid off before you retire and you don't need all that space. Even if it is 5 years, it's mostly not worth it.

In your circumstances I would forget about a bigger house because you just can't afford it and lock the money away in a fixed term ISA then forget about it. £20K isn't a huge amount of money for the 'average' family these days but it's nothing to be sniffed at, so to be blunt, you may never get this kind of opportunity again and I think you need to make the money grow. After one year, you could have generated about £900 or so in interest.

And 5-10% inflation would have eroded its value, so it's worth less than £20k is today.

But they can't actually afford to use it to buy a bigger house. They wouldn't be able to afford the running costs.

And they're not wealthy enough to enter into higher risk investments IMO - this money is their only bit of security.

So what do you propose they do with the money?

Pay off debt.

Technically you should use it for debt. So the car loan then the mortgage. But I know I would object to paying off a car loan that wasn't technically mine as well!

I know my elderly relatives would approve of me putting it in a pension for myself.

The advice on windfalls is to put it away for a year and then decide when your head is a bit clearer, so premium bonds is a good idea, and you might even win!

The car loans - yes. They shouldn't clear the student loan though.