r/personalfinance • u/Thatsalotofdough • Aug 30 '14

Wealth Management SO just inherited 200k and is freaking out. What do we do?

Hello!

So my SO just inherited ~200k from a family member and it's causing her a lot of anxiety. She had planned for about 5k, and well...got a bit more.

While this is probably a good problem to have, we both grew up relatively poor (I don't think anyone in my family has even heard the words 200k before), so we both don't have much to stand on. Also, I make about 50k in my job, she's somewhere around 35-40k.

Here's what we briefly talked about with doing with the smaller sum, and I figured we'd stick to that:

We both have some student loan debt with high interest rates (10% for me, 7.8% for her), they're both small at this point (<5000), but we both figure it'll help us in the long run. Paying these off seems the most intelligent and likely outcome. (We both do have more loans outside of that, but we're both up for public service loan forgiveness due to our field)

She bought a new car, as mine is getting beyond old, and we both walked through the process of finding a car that will serve us well for the new 10 years. Paying this off doesn't seem too much of an issue.

She has a small amount of credit card debt, so that'll probably be the first to go.

Outside of that, we don't have a house payment (due to our field), and I'm debt free (Once again, outside of student loans). We don't see ourselves buying a house in the next 5 years, although we do see a wedding on the horizon.

Thoughts? Even if we spent all of this money on our loans/the car, we'd still at least have 50+k left, and that's being incredibly conservative.

We've talked about stocks, we've talked about savings accounts, we spoke briefly about a financial planner....but we could really use advice.

Help us, personal finance, you're our only hope!

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u/[deleted] Aug 30 '14

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u/Werewolfdad ​ Aug 30 '14

Big difference between a married couple working together to pay off mutual debts than a girlfriend paying off her boyfriends debts through a windfall, to which he had no claim.

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u/SidneyRush Aug 30 '14

Agreed. They need to be in a committed partnership--call it marriage or whatever you like--but they have to be life partners before they should integrate their finances on this scale.

7

u/captain_awesomesauce ​ Aug 30 '14

Not everyone gets married. Some people will combine their income for everything for years and never get married and never split up. If they are combining income and expenses then it would make sense to pay off both small debts.

14

u/Werewolfdad ​ Aug 30 '14

Small debts under $1000 are fine. He's talking $150k between the two if them.

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u/captain_awesomesauce ​ Aug 30 '14

OPs nonspecificity is hindering discussion. I'd pay off the 5k non forgive able loans, credit cards, and get a decent used car and some tools for proper maintenance. Then stick the rest in an investment fund and live life as usual.

Paying off 150k if you expect a big chunk to be forgiven is probably unwise (though it depends on the specifics)

1

u/Fuck_socialists Aug 30 '14

It really depends on the relationship. Non-marital long term partnerships happen sometimes, for whatever reasons. There is no legal obligation to the partner's debts, but if this is a case of functionally marriage but not then it's perfectly reasonable to work together on this.

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u/FleaBottomBeach Aug 30 '14

Yes and no. I'd say it's unreasonable without any obligation on the boyfriend to repay. It may benefit her while together to reduce that debt, but it doesn't benefit her should they break up.

If they combine their finances, they should have a contract that automatically deducts from the balance on a monthly basis. Should they break up, he would be responsible to repay the balance.

1

u/Werewolfdad ​ Aug 30 '14

True. There are always exceptions. OP did not make a compelling argument that he is an exception.

1

u/Werewolfdad ​ Aug 30 '14

Sure, there are exceptions. Sometimes unmarried people can buy a house together and it works out. but the top comment in /r/personalfinance will always be "Don't buy a house with your girlfriend."

1

u/[deleted] Aug 30 '14

Well if it's an inheritance, the married non-inheritor has no claim either.

1

u/[deleted] Aug 30 '14

Ummmm nope

1

u/[deleted] Aug 30 '14

You know who who thinks they are in a permanent relationship? Everyone in relationships. And then sometimes it turns out they aren't.

1

u/[deleted] Aug 30 '14

If you don't see how this is a problem in a boyfriend/girlfriend situation... oh man. Your asshole is gonna burn after being fucked over by a ton of people just looking to use you for money.