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Original poster

What to do with 120,000?

12 replies

toomanyleggings · 10/10/2023 11:51

Dh has some inheritance money coming of about 120,000. We both work at capacity really and have three young kids. We already have two rental properties that are a pain in the ass to manage. We only just manage really and don’t have any savings, fairly big mortgage on our own home. Any ideas what to do with the inheritance? DH wants to put a bit into house improvements ( garage conversion or extension), pay off his car loan… Any ideas ?

OP posts:
nannynick · 10/10/2023 13:50

I would go through the UK Personal Finance flowchart.

Having no consumer debt.
Having a good sized emergency fund.
Be paying good amounts towards pension.
Having some investments in ISA for access before retirement age.

ukpersonal.finance/flowchart/

I would think carefully about the BTLs and decide if you want to keep doing that.

Ginwitch5 · 10/10/2023 18:52
  1. Pay off consumer debt
  2. Emergency fund of 3 months saved in ISAs (Index tracker funds) mortgage.
  3. Reduce mortgage with balance.
  4. Based on your reduced mortgage payments going forward increase pension savings.
Hitchens · 11/10/2023 07:30

Ginwitch5 · 10/10/2023 18:52

  1. Pay off consumer debt
  2. Emergency fund of 3 months saved in ISAs (Index tracker funds) mortgage.
  3. Reduce mortgage with balance.
  4. Based on your reduced mortgage payments going forward increase pension savings.

you don't want your emergency fund invested in ISA index trackers. It should be in easily accessible cash savings. Also the OP sounds in a risky position, two rental properties combined with a big mortgage on their home and no savings - a recipe for disaster.

OP - pay off any expensive debt, put aside 6 months of expenses in easy accessible cash. What's left if anything, maybe treat yourself to a holiday and then consider how best to use anything left over (either invest it in ISAs and/or pension)

LuisVitton · 11/10/2023 07:31

I heard on the money programme that there are savings accounts giving 6% interest.

snowlaser · 11/10/2023 13:36

If you have a car loan, no savings and a big mortgage that almost seems to answer your own question .... pay off all the car loan, some off the mortgage and save the rest (maybe with a few treats).

(It seems risky to me to own two rental properties and yet have a big mortgage but that's another story.)

Original poster
toomanyleggings · 11/10/2023 15:02

Don’t get me started on the rentals. I don’t want them. DH wants to get another one. We’re definitely going to pay off the car loan. There’s another chunk of inheritance money going to the children so that’ll def need to go into savings

OP posts:
Luckydip1 · 11/10/2023 15:04

Pay off car loan
Use the rest to pay down mortgage

Frodedendron · 11/10/2023 15:57

My first question would be are you living the life you want? Depending on how much capital you have in the rental properties, it sounds like you could sell one and use that money + the inheritance to drop your hours a bit and feel a bit less stressed/spend more time at home while the kids are young, if you preferred. You're in a position at the moment that seems to me heavily weighted towards future wealth and building capital, at the expense of enjoying the here and now. If you want to continue as you are, then the advice from pp is sound.

Original poster
toomanyleggings · 11/10/2023 18:46

@Frodedendron my work isn’t an issue. I’m pretty lucky with the job I have. Dh is another matter entirely! He’s very stressed and works long hours so yes that’s something to think about.

OP posts:
CurlyhairedAssassin · 13/10/2023 19:47

Is he hoping that he will become a full time landlord/property developer and give up his full time job? because having 2 rental properties, big mortgage, car loan and no savings is rather silly in itself, never mind thinking about getting a third. Your poor tenants, what happens if there is a sudden big expense needed on one of the properties, where is your contigency money? I really wish people wouldn't become landlords with no financial backing behind them. If cash flow is so precarious then it's really not fair on their tenants.

It sounds as if you definitely need to get rid of one of the properties for a start. You've got generally good information except for putting your emergency savings in tracker funds. Not sure that's good advice, personally.

CurlyhairedAssassin · 13/10/2023 19:49

Frodedendron · 11/10/2023 15:57

My first question would be are you living the life you want? Depending on how much capital you have in the rental properties, it sounds like you could sell one and use that money + the inheritance to drop your hours a bit and feel a bit less stressed/spend more time at home while the kids are young, if you preferred. You're in a position at the moment that seems to me heavily weighted towards future wealth and building capital, at the expense of enjoying the here and now. If you want to continue as you are, then the advice from pp is sound.

It's DH's inheritance money though. Yes, if he's a reasonable man then I'm sure they'd discuss together how best to spend the money, but ultimately it's his decision and I can't see him being happy in a v stressful job if it's spent on enabling OP to drop HER hours!

parietal · 13/10/2023 21:28

After paying down debt and sorting savings, Put as much as you can money in an ISA and a SIPP pension. Keep topping up each year. They have more stability and liquidity than BTL and are much less work to manage. Look at Hargreaves's Landsdown or Nutmeg or similar.

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