I would want to invest once all of our debt and savings is taken care of

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  • #82211 Reply

      My grandfather recently passed away. He was the person who taught me how to save and to be smart with money. My parents were never good at managing their money, to the point that my childhood home was foreclosed on when I was young.

      My grandfather has left money behind for us. I want to make him proud with how we use it and set my little family up for the future. We already have a fully funded emergency fund of $48,000 (6 months of income). My husband and I saved that up before he left active duty military so he could have a smooth transition and because we were moving across the country. We both now have stable, secure careers.

      So my first step would be to pay off our debt. Our debt consists of:

      Truck- $28,136.11 (3.74% interest, $499.89 payment)

      Student loans- $19,559.76 (0% interest, no payments right now) I will wait to pay these until the final Supreme Court decision but know it’s likely I’ll need to pay. However, I did receive pell grants so if the SC surprises me I would qualify for the $20,000 forgiveness.

      Total debt = $47,695.87

      I am also nearing needing a new vehicle. My current vehicle has 130,000 miles. I could get more life out of it so may hold onto it for a little longer and hold the money for it in a HYSA until I really need a new one and pay cash for it. BUT- I could probably get more trade in value for my car now than if I hold on to it and get even more mileage on it compared to the interest I would earn in a HYSA… would you buy a new vehicle at this time?

      I would most likely be looking into a Toyota Highlander.

      Next, I would want to “bulk up” a couple of my sinking funds. Most importantly Christmas, birthdays, vacation, medical, home and car maint.

      Lastly, I would want to invest once all of our debt and savings is taken care of. We would have extra money in our budget after paying off our truck to use it to invest monthly. We both already contribute to our employer 401k/TSP plans. I would like to open a Roth IRA and then add to our children’s 529 plans.

      Is there anything you would change in my steps and thought process?

      Thank you for any advice.

      #82212 Reply

        Legacy money is bittersweet. We do want to get it “right”.

        I will say to not rush. It’s totally ok to stick it in a HYSA until you know what you really want to do.

        After I lost my brother, I paid off my car and paid down my mortgage. I didn’t have children yet.

        After I lost my mother, I paid off the mortgage and continued 529 investment for my kids. I funded sinking funds for some goals and some bigger annual things like property taxes, insurance and our HOA.

        I’m sorry for your loss. Your grandpa would be so proud of you for the care you’re taking with this.

        #82213 Reply

          I agree with all of your thoughts. I would consider saving the monthly payment on the vehicle you’re paying off and putting it in a sinking fund toward the purchase of your next vehicle. 130,000 miles isn’t much (depending on the car you drive). I have 136000 on a 2007 BMW and I’m driving it until it dies. My husband has an Explorer and we paid it off in January. Every month I save that amount of money in a new car sinking fund, so we will be ready when the time requires a newer car purchase.

          Invest as much as you can, because retirement is a wonderful thing and you want to enter it while still young enough to travel and remain debt free.

          I’m so sorry for your loss and your grandfather would be proud of your wise decisions about money.

          #82214 Reply

            I’m so sorry for your loss!! I third the point on making sure your wills, trusts, durable power of attorney, living wills, etc. are updated. And that whomever will need access to the money In case of a worse case scenario will have access to it to cover immediate expenses of childcare, bills, funeral costs, etc. That cost us a pretty penny when my hubs and I did it, and our son is an adult so less complicated.

            #82215 Reply

              I think your grandpa is proud as you are trying to be very intentional with the money he left you. I think there is already sound advice but I wouls make sure all your what happen if I die documents are up to date. In addition, perhaps do a little something to honor the memory of your grandfather. Such as so donate to a favorite cause of his.

              #82216 Reply

                With your interest rate on the vehicle so low and the student loans temporarily on pause, I would sit on the money and wait. See what the financial advisor says. Might be wise to invest some of it first.

                Getting rid of the student loans would be huge though. Once SCOTUS makes up their mind you can move forward.

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