Teens/young adults inheriting 10k

[allhailraatma]

As the title says. They are early 20s and 16. All in full time education (school,undergraduate, masters). They are inheriting 10k each. What should they do with it? The plan so far for each of them
1 - wants to invest for a year or so
2 - wants to use some to upgrade her uni accommodation (and will blow the rest on living the good life if she's not gently guided!)
3 - wants to have a few hundred to spend on stuff. Was thinking about putting a chunk into his CTF (he's 16)

They'd all like to buy something small to remember the person who left it to them and apart from that I'm a bit clueless. Thank you!

If her uni accommodation is really that bad, then I would definitely want the money spent of upgrading that, if that’s what she wants. With my 2 sons, they inherited money from my parents and this paid for their first cars. It will always be remembered that the grandparents paid this for them and something to remember them with.

I'd say max 2k to spend, save the rest (in some kind of time locked savings thing - I don't know what they are in the UK) to go towards house deposit or other big but important expense.

My 11 year old just inherited a decent amount of money and I've been thinking a lot about how to make sure she still has most of it by the time she wants to buy a house, and the big worry is Uni living costs eating up a lot of money.

@allhailraatma definitely worth the accommodation upgrade then. Anything left over I would encourage her to put into a LISA. It is a great investment.

My DD's also inherited recently. They have done what many pp' s are suggesting. A combination of LISA, ISA, and easy access accounts. Spent some of the surplus easy access cash on keepsake jewellery, some on holidays, driving lessons, car, and university good quality uni accommodation.

They are 18 and 26, so adults, and really their choice, and both were/are extremely sensible.

With 10k... I'd probably encourage them to save part towards first cars and driving lessons.

You mentioned that they all want to get something in this person's memory, rather than a physical item, could they all throw in a couple of thousand towards an amazing family holiday, a once in a lifetime sort of thing?

It's up to them. Mine used a smaler amount to buy and fund a car purchase.

I'd use it to encourage them to invest. As pp said a Lisa and or a stock and shares isa. Minimum of 2 grand into one.

Also a sipp...you can open them on 100. It's a self invested personal pension.

Procrastination is the enemy of all investing esp for the future. They won't miss the Aaa£100 but it will be there in a sipp ticking away... the idea they don't ever touch the money that's invested.

Let them get experience 9f growing money.
I'd also put 1000 away in pb each ...as total emergency money.

1000 in normal account....for back up spending.

The rest as pp said big tickets item's car/driving/ uni....

Definitely use it as an opportunity to teach them that premium bonds aren’t an investment.
They could put a limited amount in stock in a company they are interested in. Obviously not a great investment strategy in itself but a learning opportunity and something to follow long term.
The rest can be the start of their savings for a house deposit.

Surely you'd be better off with an instant access savings account? Chase is currently offering 2.7% instant access. With £30k you'd have way more than £500 in even one year.

It's probably because PB are also tax free

When you are young does it matter so much whereas you live? I had a box room that couldn't technically be let out and slept on the floor. I would have loved to have upgraded but at the same time looking back would think it's a total waste.
All the successful people I know had some struggle and resilience.

There's always one.

? How incredibly rude.

I was merely pointing out some lack of creatures comforts when young isn't necessarily a bad thing.

However if your family are well off and her saving some money now to secure a more comfortable future as she's older when she's less likely to want to go without is immaterial then why ask the question?
Does it matter what she does with it.

I'm sorry @2023bebetter

Your comment was a judgemental one about what dd wanted to use the money for, which isn't really what I'm interested in here. It's her money, if she wants to blow the lot on clothes she could. We don't all have to sleep on floors to build resilience ‐ was a silly comment, particularly as you have no idea of my dds character.

Op, you ask

What should they do with it?

and then go onto berate a poster, saying

Your comment was a judgemental one about what dd wanted to use the money for, which isn't really what I'm interested in here

So, what are you interested in hearing?

There has been some great advise, re ISAs, LISAs and SIPPs and I think most people are using their experience/hindsight to say that using it to cover uni rent is not the best!

My own DC inherited in their mid/late teens, and we encouraged long term investments to help with eventual house purchase.

Shorter term spending can be covered from earnings - even from PT work - can your uni DD work in term time/holidays? I know some courses/unis don’t facilitate this, but even working in the long summer can help.

Yes, thanks for pointing out the good advice I've received.

Posting to infer that my dd will only be successful if she sleeps on a box room floor is not helpful, or correct.

When I said "what should she do with it" I meant from a financial pov, not judgements about what should or shouldn't decide to spend some on. Hence this being in Money Matters, not AIBU. Apologies if that wasn't clear.

(and she works during every holiday)