To ask what you would do with 50k?

[PlanningAhead1]

Please do not see this as a gloaty thread at all as I promise it isn't meant to come across that way.
I'm from a pretty poor family, saved up and got married and bought a house 10yrs ago. Have 2 young DC. We don't struggle as such but we also say no to A LOT. We went abroad this time for the first time since 2019 and I feel amongst our friends we are seen as being tight (try to avoid rounds, feed our kids at home or take packed lunches etc).
Anyway, I am due to get just over £50k within the next few weeks. This is not inheritance and will not be taxed, but is in relation to something which happened to me a while back.
I know the temptation will be there to blow it. We need a new conservatory, I'd love invisalign braces, I'd love new built in wardrobes and to take the kids to florida. I know that this 50k Isn't a huge amount and will go quickly if I use it on the above.
It's got me thinking there must be better ways of spending it... I'm not sure if that's using it as a deposit to buy and rent out a house, set up a bouncy castle hire business, pay off a chunk of our 200k mortgage or our 20k car finance etc.
I have nobody to ask IRL as we aren't telling anyone about it but I want to make the best of it while i hVe the chance.
If you were to get 50k, what would you do with it?

Split it 50/50 so my each of my kids would have a deposit for a house when they are ready to move out.

We got a bit more than than a while back here’s what we did:
paid off a chunk off our mortgage and all debts like car loans
went to Florida (we were already saving up for this
got our kitchen done
got new wedding ring as I never liked mine and it was bought ultra cheap

I would pay off any personal debt i have and have a nice holiday.

The rest i would probably just keep in a instant savings account just to keep me ticking over when needed as times are difficult at the moment.

it may fritter away over the years but at least i wouldn't have to worry about being short on money month to month over the next 5 years or so.

this may be deemed bad advise as I'm sure many people will say invest it in property or shares etc but i feel realistically a lot of people would end up doing the same given the current financial climate.

I would put it in my pension.

I'm sorry to say OP that building costs are insane and you won't get much change out of that if you think about doing a conservatory. My friend just had an attic conversion and it was over £100k 😰

I would say take a chunk out of your mortgage and lock the rest away in a savings account with a notice period that will get you 6 per cent +

If I were me, I’d put it in savings. No debts, no car finance etc. if I were you, I’d pay off the car finance and then put the rest in savings. Maybe spend £5k on a holiday but not more with £20k going on a car.

I would use part of it to pay off the car loan then put the money that used to go on the car loan into a savings account to save for the fitted wardrobes. I read somewhere that conservatories often don't add as much value to a person's house as they hope so if I used some of the money for a conservatory I'd do it on the basis that I liked having a conservatory, not on the basis it would add to the value of the house. If I didn't already have an emergency fund, I'd put some money into the best easy access savings account I could find.

If I didn't want to tell other people about the money, I wouldn't do anything like go on holiday to Florida straightaway. I'd say I was saving for a holiday there because it would be obvious something had changed financially. i would make sure I started buying a round when it was my turn - unless of course I'd always opted out and bought my own drinks ☺️

I'd investigate pensions and use it for that.

Or not. We bought a flat in 2014 and just sold it for less than we paid due to local property conditions.
Pay off debts. No brained. You don't know what the future may hold and if you'll always be able to make those repayments.

I did:
paid off credit cards
got some work done in garden
booked family holiday abroad
reduced working hours

Not great long term financial planning but making my life more enjoyable every day

Pay off the part of the mortgage or sort out the car loan. Do not invest in a buy to let. You don’t have enough to do that - and the disadvantages are huge! Not getting tenants for months and having to cover the rent, damage to property you need to fix and if you have to sell you pay a high level of property gains tax.
I’d look at the mortgage and car loan.

If your car loan is higher interest than the mortgage I’d pay that off as assume it’s over a much shorter term and it would give you more significant extra money each month to save that could then pay for some of the things you want like braces/a holiday/ wardrobes over the next few years vs mortgage. I’d then look if 20k can come off your mortgage and if so whether it feels worthwhile or if you’d be better off saving it and maybe having it to gift to the DC when older. I’d reserve the last 10k for something fun on the basis that since you never know what tomorrow will bring it’s a good idea to enjoy your life today.

I would:
Pay off the remainder of the car loan
Get the garage converted
Put 10k in savings/premium bonds
Use 10k for a holiday
Use the rest to pay a chunk of the mortgage off.

But I think the advice from a pp to just put it all in savings for now due to your ideas is a good shout, sit on it for a year and then spend it.

I would do Invisalign but would look to train into something that would give me the possibility to increase my earning potential by 50k.

I would think about adding to both your pensions as you instantly make money through tax relief.
I would set up LISAS for your kids as they instantly make money ie yearly 3000 turns into 4000.
I would pay off any higher interest bearing debt first. ..probably the car loan maybe but check
or I would set up ISA up to £20,000 each - currently in a savings account as stock markets are falling then convert onto a Hargreaves’s investment platform.

The amount seems too low to invest in buy to let what with stamp duty and solicitors costs.

50k

• house insulation
• new energy efficient windows
• solar panels & air source heat pump

plus paying off any unsecured debt.

In your situation I'd pay off the car so you have more disposable money each month, use 5k for wants (wardrobe etc.) and the rest in savings.

Definitely not a BTL! Could tip you into ruin if it went wrong, the east days of BTL are over.

One very important piece of information is the interest rate on your mortgage, and how much your car payments are, but I would:

1. Definitely pay off the car finance, and, assuming payments are £300 a month, I’d then use £150 a month of this saving to allow a slightly less frugal lifestyle, but save 150 per month every month to go towards your next car, we always buy cars outright every 10 years using this method and it means we’re never tethered to expensive car finance deals.
2. If your mortgage is still in a cheap deal if save the rest for now - for people still on fixed rates the interest on savings will be more than the saved mortgage interest is higher, save until your deal is up, £30l will earn you at least £100 a month even in the best instant access saver.
3. When the time is right, pay £20k off the mortgage, it’s likely that this will save you another £100 per month in your household budget, or you could reduce the term, given your situation I’d take the saving.
4. Keep £10k back in savings, for you to add to now you have more spare cash each month and then when the time is right you can go to Florida/get Invisalign etc.

I’d pay off the car finance, put a chunk in savings to consider paying off some
of the mortgage when it’s next due (to try and reduce the monthly cost if interest rates are still as they are), I’d buy some not too expensive wardrobes (IKEA do made to measure) and I’d go on a special family holiday, but not to Florida as the cost is so high and it would eat up such a large portion of your money.

Pay off car finance and any other non mortgage debt

Apply money earmarked for car finance to increasing monthly mortgage repayments

how long is your mortgage deal for? If it is coming up in the next 2 years keep the remaining £30k in a 5% isa to pay down debt when you remortgage

if you have a long term mortgage, put aside £5k for special purchases and remaining £25k in isa for future spending

you can get Invisalign on 0% payment plan which you should be able to afford now with reduced outgoings for car / mortgage.

a Florida holiday will cost £10k minimum in school holidays (park tickets alone are £3k for family of four now). I would holiday closer to home for now.