£30k - help!

[Sunny1986]

I'm about to inherit around £30k from the estate of a distant relative. I'm very practical and find spending money on myself very hard! What should I do with it!?

We've got an 11 month old who's in full time childcare, we've set up various ISAs and savers for him. I'd feel like i should put some of the inheritance toward his future.

We'd like to do a loft conversion, £30k would cover a big chunk of the work. Is now the right time to do work on the house with material costs going up?

Do I just invest it and come back to it in a few years? If so, where?

Help!

Presumably if you want to extend your house, then you want it done relatively soon, not vaguely 5 or 6 years down the line, so I would start investigating possibilities now you have a good proportion of the money.
In many areas, you have to wait 12 - 18 months on a good builder's waiting list anyway, so I would certainly crack on with putting things in motion.

I would certainly spend it on that rather than adding to your mortgage and investing money elsewhere for your baby. If you keep your mortgage as low as you can you have more "spare" money each month should you - at that point - choose to use some to help out any dc you have.

If you want / need a loft conversion, and this will enable you to stay in your house for a good length of time, then I would get in with it and spend your inheritance on that.

I would start organising woek to house and for short term while waiting for everything to happen invest the entire £30k in premium bonds.. you won't lose anything but you migh make something

You could use it now for the conversion and stick the rest in a stocks and shares ISA - pick a well diversified index fund. Or put the whole lot into premium bonds and enjoy the monthly 'have I haven't I won' thrill! Or a split between all of the above, and leave the money in the ISA to grow over the long term but withdraw the premium bonds money when you need it for the conversion.

Save it for the future - if you child goes to university it will be a huge help, or for deposit on a house. That’s if you don’t need it for yourself of course

Loft conversion

Do you already have an emergency savings fund and no debts?

if so I would put some in an ISA in my name so more flexible (and poss pension depending) and spend some. Possibly pay off a bit of mortgage if terms allow.

Personally I’d hold off on conversion in the near future if you can. Most decent builders may be booked up on big projects for next 12-18 months and can quote with presumably cost of materials inflation etc at a premium. when work starts drying up as people are not being able to borrow as much you might get a bit of a better deal for labour. Also depending on type of conversion you want I.E hip to gable/dormer or standard internal only will be a huge difference in costs.

If I was you I would make sure I put at least £5,000 into a private pension (SIPP) for your child.

The easiest and least worry option for what to invest it in would be a low cost S&P500 tracker. The S&P500 has averaged a return of 9.5% for the last 60 years.
I got this reccommendation from the Tony Robbins book Money : Master the game.

If the S&P500 performs the same over the next 60 years then that £5,000 will become more than £1,000,000.