Unexpectedly large gift - WWYD?

[DarnTooting]

My retired father had mentioned in passing that he would be giving me and my siblings some money. I was expecting £5k, but he's just handed me a cheque for £20k! I'd spoken with my husband about what to do with the money beforehand and he suggested saving it towards a newer car (not likely to purchase until next year - childcare costs will go down next September so some of the difference can be used for a loan to replace our 12yr old vehicle). £20k is more than I'd spend on a car in total!

I'm a secondary teacher working 4 long days a week (plus all the extras!) £20k is enough money for me to quit my job at Christmas and be full time at home with my children before the youngest starts Nursery in September. I could easily pick up another job although my current school are wonderful and flexible - this is not the case in every school!

The other option is to use the money to fund another child. My husband is done but I'm really not. He's found the children hard work and feels like he's just getting his life back now we're out of the baby stage and have one in school. He significantly out-earns me and I know he feels pressure to provide for the family. Thankfully his job is unlikely to be affected by COVID, but he's in a management role that is subject to restructuring so feels constant pressure about this.

Thoughts?

I cant imagine blowing 20K to give up work for 9 months.

3 months expenses really isnt that much at all.
In the current economic climate I would save half, pay half off the mortgage and keep the repayments the same.

What’s the tax situation with money gifts?

I agree with many of the previous posters. I think I'd be nervous about using it to quit work in any climate, let alone the current. 20k is a nice sum but not life changing for most people in jobs with mortgages and I'd be very cautious about spending it. I think if you wanted to seek to do some reduced hours for the rest of the academic year with the agreement you could go back to what hours you're on now, that might be a compromise which wouldn't use up too much. But my inclination would be to put some towards a new (well, I'd buy second hand as I refuse to buy new cars!) car and then save the rest just in case.

If Covid passes and things start to look more rosy, you could then look at what to spend on but at least you'd have the cushion to cover mortgage/bills/food if the worst happened.

£20k isn't enough to give up work? Also you said yourself your DH doesn't want more kids so it would be unfair to pressure him into one just because you have a bit of money in the bank now - he's the one who is going to have to work long term to pay for them? You said He is already feeling pressure to provide for the family?

A new car depreciates in value the minute it's driven off the forecourt it's not worth using the money for that - if you think you have little to see for paying some off your mortgage you'd have even less to see with a new car - I'd put some towards a car but maybe on a finance deal whereby you get a new one every 4 years

Lump sum in the bank for a really nice family holiday once things settle down - next year or year after

Use the money to make memories as a family

I wouldn’t give up work in any career right. Ow. Global pandemic, recessions and brexit looming. It’s great you have money saved and are in a good positioning currently.

I know you said your husbands job is secure but what happens if the restructure doesn’t go as expected and he is made redundant or placed in a different role? We are in uncertain times and I don’t feel anyone’s job is perfectly safe.

I get your desire to spend it with the kids but maybe la reduction in hours until next September? I wouldn’t leave a school that’s flexible when you have kids. Plus £20k won’t go that far if you are off work and finding things to do.....

If you feel your savings and mortgage are ok then I’d maybe be a car( saves taking out a loan) then use the rest for memorable trips/holidays/days out with the children you already have. Or to fund part time hours if you are fixed on that.

If you're an experienced teacher then 20K is surely only 6-9 months salary? Not nearly enough to give up work. Plus you'd not be making pension contributions, lose any Death in Service benefits (heaven forbid it would be needed but good to know it's there), employment protection rights etc.

At least if you drop your hours but keep working you will still have those benefits.

I would save the bulk of it in a fixed rate account for at least a couple of years till we're hopefully out of this Covid mess and can see the situation more clearly. Maybe plan for a fabulous holiday when all this is over.

Oh, if you get a chance to take 9 months of work with your DC before they start nursery, and can definitely get another job in September, then go for it! Even better if you can convince your current school to give you unpaid leave for 9 months. You will never regret spending that time with them.

I get it. You don't want more stuff or more savings you want to use the money to buy more time with your kids. Surprised Mumsnet is not getting behind that a bit more tbh

Can you negotiate a career break/ sabbatical/ unpaid parental leave rather than giving up? Depends how much they want to keep you I guess but they might let you do that.

Quitting altogether seems unwise if this is a good job. You might not get one as good again. Even reducing hours might not work. When you've used up the 20k and you want to go back FT your work might just say 'no thanks'. We filled your post.

You cannot have another child. Even if you had all the money in the world you can't have another child if your DH doesn't want one.

I think another child that your DH doesn't want or taking 9 months career break are both foolish (and selfish) ideas tbh.

Sensible would be to upgrade the car (as you said that needed doing), and then put the rest of the money away into savings (or paid off the mortgage).

You don't have to instantly burn through any money you have! If you put it in the bank, it'll still be there when you actually need it.

I know that the money must be burning a hole in your pocket but personally I would take your dad out for a meal to say thank you, put 500 to use buying treats and put the rest in premium bonds for now.

Maybe use some of it later on a car or an amazing holiday when things are normal and when the kids are old enough to appreciate it or possibly put some in savings for the DC.

There is no need to spend it quickly

You could ask school for a sabbatical?

@Mochudubh

If you're an experienced teacher then 20K is surely only 6-9 months salary?

Take home?!! What kind of school do you work in?!!! I want a job there

£5k car
£5k holiday
£10k holiday.

I would not give up work, and if your husband doesn’t want another child, then that’s not even an option really.

My dad gave me 70k a few years ago. I put 50k to to sensible use but he wanted me to take 20k to treat myself. Has your dad said he'd like you to treat yourself to anything? If not I'd probably take 5k to treat you and then invest 15k.

I was initially going to say that I'd save/mortgage a similar amount but I realised that's not technically true because, in a very similar situation, I used it to fund a postgrad qualification and took 4 months of parental leave (tacked onto the end of my maternity leave). It was the best solution for me as 1) it enabled me to get a qualification that is relevant to my job and will help long term prospects and 2) it meant we could start DS in nursery in Sept doing shorter/fewer days to help him settle and I wasn't trying to juggle the inevitable colds and snottiness that come when they start nursery with work. I also have the benefit though of a flexible employer who were very happy with this. We could - and have previously - overpaid our mortgage which is obviously good in the long term but this feels like a better use of the money for now.

[quote OverTheRainbow88]@Mochudubh

If you're an experienced teacher then 20K is surely only 6-9 months salary?

Take home?!! What kind of school do you work in?!!! I want a job there[/quote]
Fair enough, I don't work in a school (I earn less than the so-called national average wage BTW).

If teachers earn less than I assumed (I thought they'd be on 30K plus depending on post and experience) that makes the point even more valid though. It's surely not enough to give up work.

As you only have 3 months expenditure saved I'd definitely save it. I think it makes sense to have at least 6 months, honestly probably a year to be safe. I'd chuck it into savings with the goal it's a good start to get the family closer to a year's expenditure saved in an emergency.

Could you reduce hours? I have a couple friends who work 2 days a week and love it. Really feel like they have the best of both worlds. Not at work enough to do all the extras, and home far more than at work so feel more like a stay at home parent.

Being a sahm for SAHM for 9 months must be very tempting.

Go for it but will your OH support that decision? The money was given to you but if could then decide that theextra money he earns should be only. Better to go ahead with that plan if he supports it 100%

Will you no out be taxed on it, Giving you a much smaller sum?
Disclaimer : I know nothing about the taxing of money gifts, but it’s the sort of thing I hear ( real grown up) people talking about.

Lots of people have jumped on the point that you can't make your DH have another child, so that's not an option regardless of the money. However, you also mention that your DH feels the pressure of having to provide for the family. How will you taking a sabbatical or leaving work help with that?! Perhaps he feels your savings situation isn't as good as you feel it is?

Do you see this as family money, or your money? All your options suggest you see it as yours, have you discussed what your DH would like to do? Obviously, that might not be relevant if you keep money separate.

Personally, I'd add some to your savings and put the rest on a pension / LISA depending on what your situation is.

See if you can take unpaid leave this year & next, then chill out & save it.

www.gov.uk/parental-leave/entitlement

What about something in the middle. Doing two days a week at work

I’m same school

I'd go with reducing your hours to half time.

This will significantly make a difference to home life, make it easier for the Head to recruit to new post, and keep your foot firmly in the world of work which is important for future planning.
Imagine if you gave up work completely and hated being a SAHM?(probably me projecting here!)

Don't forget that you won't get the full £20k because you'll have to pay tax on most of it. You can only gift £3k each year without it being taxable.

Your dad might be better off gifting you £3k each year for the next however many years rather than giving it to you as a bulk amount.