I've just won 30k - what do I do with it!?

[sundaynamechange123]

Nc'ed, but I am a regular poster - promise!

Before I start I obviously know this is a really nice problem to have, it isn't a stealth boast at all. I've never had this kind of money before and I think I'm probably still very much in shock.

I've just won 30k, this is a HUGE amount of money to me. I'm obviously over the moon, I never win anything and this is more than I earn in a year even before tax. I don't have a clue what I should do with it for the best. I also haven't told anybody yet, I think I'll just keep it between myself and my partner.

I initially thought of doing things in the house, an extension, a conservatory, properly convert the loft etc but my house is ex council and not in the best area. I bought it cheap and only finished the renovations a year ago. I think if I spend more money on it, I won't get that money back when I come to sell due to the crappy area.

I don't feel like I want to sell and use the money towards a bigger deposit as I've only just got settled here and everything is just how I want it.

I'm only 24 so not nearing retirement or anything like that. I don't want to blow it all, I'm generally quite sensible with money. I save my wages well but I don't know what the best thing to do with it is?

I was thinking maybe a fancy holiday would be nice for me and DP when it is safe to do so, but wouldn't want to spend more than 2k on it. I think that's enough to give us a luxury treat, it's not something we would usually be able to do.

What would you do? I don't really know much about investing etc?

Wow lucky you! You sound wise beyond your years. Agree with not spending on your existing house if you think it will be over developed for the area. Could you use it to pay down your mortgage? Interest is low at the moment so might be worth looking into having your house re valued and remortgaging to bring the interest payments down if relevant. Do you have a pension? Money saving expert website is great for ideas. I think premium bonds interest rate is about to drop a lot so that would be ok short term while you decide what to do with it but it’s not exciting. How about a stocks and shares Isa? Vanguard has range of low cost interest funds which are easy to choose depending on the level of risk you want - called life strategy funds, they might be worth a look.

Or if it’s for your pension you could use a SIPP wrapper instead of an ISA

Congratulations on your win.

I’d suggest you need to think about what you want the money for and your attitude to risk in order to make this decision. Interest rates are very low and likely to stay that way so you won’t make much on it in a savings account, but it will be safe and you can get it back to spend any time.

If you have any debts (except possibly student loan or something on 0%), clear them first.

If you have a mortgage that allows overpayments without penalties you can save a lot through paying a lump sum off, if you don’t expect to need the money for other things.

If you have neither, then you could put it in a savings account - look on money saving expert for the best ones but you won’t get much interest at the moment. Or you could do premium bonds - again the prize fund is low at the moment but your money is safe and you could win £1m (or more realistically, £25 or £50 a few times a year). If you are likely to want to access the money in the next 5 years or so this is probably the best option.

Investing is inherently riskier and you need to be prepared to lose money so it’s not for everyone. But if you are prepared to lock it away for 5 years plus and leave it in even if / when you are losing money you will usually make more than from a savings account. Markets rise and fall but in the longer term this usually evens out to an overall rise BUT not always, and covid, Brexit, US elections are likely to make things quite bumpy for a while yet. So if you decided to invest, it’s quite likely that you would see the value of your pot go up and down a fair bit and you’d need to be comfortable with that and not panic and take it out!

You could also split between these - some in a savings account for a “holiday” fund and an “emergency” fund, then a bit off the mortgage and some in premium bonds for example.

Pension contribution or mortgage investment are the most sensible choices. It would be nice to have a lovely holiday, but you're right to invest the majority in your future.

In the meantime, while you're deciding, buy premium bonds. You can cash them in anytime, and there's always the possibility your £30k will turn into something bigger.

Congratulations

Now this won't be helpful!

I would do nothing for a while.
Just forget about it. Don't be like me and think you have to do something with it straightaway.

It will burn a hole in your pocket otherwise & regrets may be had.

*Not that I have had that much, but I still rush to spend with any amount saved.

Put it aside so that you can use for a downpayment on a mortgage.

Sounds like you don't need anything right now so don't do any of it.........I was left a similar sum ten years ago and I still have it. I don't need it now but it's there in the future if I do.

Thank you all, some great information.

I feel so stupid I didn't even think of paying off a lump sum of my mortgage - that's how I know I'm in shock and probably not thinking properly!! I will definitely use some of the money for this, maybe half?

I already have about £1000 in an NS&I premium bond account from when I was a baby so I will probably put it in there for now just to keep it safe and out of the way. Who knows I might have more good luck!? That would be funny.

Good advice to not do anything for a while. I think I will just let it sit with me for a few months and not make any rash decisions.

Thank you all

Congratulations how exciting! Hope you enjoy it

How brilliant 👍. Interest on savings accounts is rubbish at the moment so I'd definitely put in premium bonds for now. You don't sound in desperate need of anything so just sit back and get looking at holidays. I'm intrigued how you've won it..... give us a clue 😏

Oh wow! Huge congratulations!

And I agree with you, do NOT tell anyone. No matter how nice someone is, whether close friend or family, you getting "free" money by way of a win, somehow makes you tight for not giving them some. If it was your own wages it wouldn't be an issue but a win gives others a sense of entitlement to it. Same goes for inheritances. We see family's true colours when someone dies.

I personally would say clear the mortgage or something else like clearing debts that will make your day to day living costs go down so you will feel the effects for longer. The mortgage payments not coming out of your wages each month with give you more spends in the long run, leaving you better able to manage if anything goes wrong.

I personally would buy a new as possible car (as we rent and can't afford to buy) just so I can save money on all the sodding repairs our old car costs us.

In the grand scheme of things such as new cars, living expenses and buying property, £30K isn't a huge amount but it can definitely improve your every day living by clearing debts or investing in a good car or property.

Yup, reducing mortgage as much as possible is what I would do.

Yes I’d love to know how you won that amount OP if you don’t mind sharing.

You sound very sensible and like you don’t get many treats so do make sure you get to enjoy some of it whether that’s a luxury holiday or a couple of lovely short breaks

That's fab op it's nice to hear some positive news. Sorry no advice, but really pleased for you

I think if I won 30k there would be some that I would want to spend on renovations that won't really make a good return (I'd like to sort out my front garden garden path say) so I would probably allocate a bit to that. Then a bit to a holiday like you're thinking.

Then I would probably halve the rest and take half off the mortgage and keep half to help with a deposit/stamp duty when I wanted to move another time.

I suspect the most financially wise thing to do would be put it into a SIPP but I don't think I would feel I have enough capital to lock away such a big chunk til I was probably 60+.

Spend it, spend it, spend it!

Just for craic, what would you buy if you could only spend it on frivolity?

How did you win it OP? Was it a lottery thing? (Obviously you don’t have to answer - I’m just very nosy! )

Congratulations - hope you enjoy it!

@sundaynamechange123

Thank you all, some great information.

I feel so stupid I didn't even think of paying off a lump sum of my mortgage - that's how I know I'm in shock and probably not thinking properly!! I will definitely use some of the money for this, maybe half?

I already have about £1000 in an NS&I premium bond account from when I was a baby so I will probably put it in there for now just to keep it safe and out of the way. Who knows I might have more good luck!? That would be funny.

Good advice to not do anything for a while. I think I will just let it sit with me for a few months and not make any rash decisions.

Thank you all

You would be best paying it all off the mortgage and then paying the reduction in payment into a savings account OR shortening the mortgage term and saving the mortgage payment once you have paid it off in full.

I keep a bit of money for a treat - holiday or something to keep, like some art or something similar.

Yes, have a treat, your holiday.

Then I would put the majority into paying off your mortgage. But check your T&C of course.

Then put the rest into Premium Binds for now as a rainy day fund.

Paying off your mortgage earlier saves loads in interest, leaves you mortgage free earlier with a much bigger disposable income to save for your pension (very tax efficient) or spend.

Congratulations, agree with all the be careful advice.

I had a lump sum - not a win - quite a long time ago and reduced my mortgage, never regretted for one minute.

DH has £25,000 in premium bonds . Since May he has won £375 in drib and drabs . I have had £100 in same period , the building society has bought in zero .
Stick it in Premium bonds . We do auto re-investment of any wins as that means the new bonds go straight into the draw .

Agreed don’t tell anyone !

I know you say you wouldn't get all of the money back if you spent it on the house - but your home is more than just an investment, it's where you're living, so you want it to be nice for you now, not just with the thought of selling on further down the line.

I suppose it depends when you think you might like to move. If it's within the next few years then I could understand, but otherwise I'd get things done to the house. I really enjoy doing thing like that though, so I'm biased. Plus, you would get SOME of the money back in the increase in house value, and my attitude to that would be that the money is like bonus money, not like I saved up, I just won it - so I'd rather increase the value by a bit if possible, but in the meantime have a lovely house to live in. You may even decide you don't want to move at all!

I'd also have a nice holiday, but wait until you can go and enjoy it rather than with restrictions etc!

How lovely! A brilliant sum - enough to make a difference but not so much to be a burden.

Pay off any debts except the mortgage, then split the remainder into three parts - short-term spends, medium-term savings, long-term investments - and consider each separately.

With the short-term spends: do any outstanding jobs around the house, any minor medical treatments or dentistry work, give something to relatives or charity, buy things you like, go on holiday...

Medium term savings: you need enough money as a safety net to see you through 3-6 months if you were to lose your job or some other crisis arises.

Long-term: pension (essential) or investments timed to mature just before significant birthdays. Consider paying off some or all of the mortgage and investing that money instead each month, but you'd need to do some calculations based on your figures to determine which would be better.

Pay off some of your mortgage, top up your pension if you don't have a decent one.
Put aside some for emergencies if you don't have an emergency fund already.
Put the remaining couple of thousands in premium bonds for a lovely holiday when you can go and enjoy it.