What should I do with my money???

pb43_2

I inherited some money from my grandparents, however I feel guilty using it as I feel like it is their money and that I am wasting it. I have used a lot (to me) to pay for uni and living expenses. I currently have one more year left at uni and then I am back into the real world.

I am 23 and so feel like I need to do something productive with this money and to take a risk and actually do something with it.

Once I have finished uni I will have approx. £40k, should I:

a) Use it as a deposit to buy a place for myself (and boyfriend) to live in with a mortgage - First I would need to find a job, and realistically could be anything with a salary of £12k +

b) Use it as a deposit and fund to buy property to do up and then rent or sell - Again would need a job and mortgage.

I have been renting with my boyfriend for 4/5 years and so moving back in with my parents is not possible.

Honestly, this money is actually a large burden on me and I am finding it very stressful to figure out what to do with it.

I dont want to burden my parents with this either because I am an adult and I need to take control of my own life.

Any advice would be appreciated.

cherylim

I graduated in 2009. A few years before I graduated, I was expecting to have enough to put down a deposit on a small apartment, and was excited about the prospect.

Things came up, I got into debt and only got out of it this year in January. We're saving for a wedding, now, and eventually might consider putting down a deposit for a house but it doesn't seem that it will ever be financially viable for us now. When I had to give up that money, I possibly gave up my one chance of property ownership.

I can't tell you what would be the best option long-term, but I can say from a personal and subjective point of view that in your shoes I'd get myself a house. Life gets in the way, and you're lucky to have that as an option and can save money by putting down that deposit - make the right choice and your monthly repayments will be much less than rent would be, making for a much more comfortable lifestyle.

Your grandparents have left you a wonderful gift - don't feel guilty, use it to do the things you might not otherwise have managed.

bhatti3000

hi
i do think its wise to ask your parents, what they think. thats what their there for.
i got my frist flat when i was 18. if you can find a cheap flat or house go for it, but dont buy anything at market value, you could rent it out and make money
hope that helps

G_M

If you are not sure what to do with it, then don't 'do' anything with it - in the sense of spending it.

Put it away somewhere where it will a) be safe and b) earn a little more for itself, and where you cannot be tempted to just whittle away at it.

How about a 1 or 2 year fixed rate savings account? It won't earn a huge amount ( 3.5 - 4.5%?) but it will be safe, and it will be locked away from temptation for that period of time.

Or for a longer time-frame (5 years +) what about unit trusts? More risky (shares can go up AND DOWN in value - hence the need to take a longer term view) but it might grow more than in a savings account, esp as the stock market is currently low.

In a few years time you may have a better idea how your life is going to pan out.

hcb42

I would lock it away too, make sure you are getting a decent saving rate, and forget about it as it were.

I dont think I would buy right now, straight out of uni, what if you get the job of your dreams at the other end of the country..? Get your career on the footing you want, then rethink

motherofstudents

Yeah, agree with GM 'if in doubt, do nowt' as we say oop north. There are bonds you can buy and other savings that you can lock away for however long you decide. Your grandparents would be happy to know you are using the money in some way that will help you so don't feel guilty. If you do decide to buy somewhere to live with your boyfriend, you should make sure that the deposit money remains legally yours.

DVardysShadow

If the inheritance is letting you get away without getting into debt, then it is doing a grand job for you. There is no point in keeping your inheritance locked away while you accumulate debt on which you are paying higher interest than your inheritance is getting.

Of course, if a student loan has a lowe rate of interest than you are getting on your inheritance, it makes sense to take the loan and keep the inheritance intact.

As for buying somewhere, don't unless you are totally confident with the locality and your employment prospects in the area. Property can be an awful bind.

G_M

DVardysShadow wrote: »

Of course, if a student loan has a higher rate of interest than you are getting on your inheritance, it makes senseto take the loan and keep the inheritance intact.

.

Errr... lower?

R_P_W

Put it away in the best savings account you can for a couple of years if you dont have any immediate plans to use it. Dont rush into commiting it on a property - you need to do loads of research in that area, you never know you might have to move anywhere in UK to find work after uni.

Is it really a burden though? I understand you don't want to feel like you're wasting it - so dont waste it then. Having this money given to you is a massive bonus and will really put you ahead of the curve when you do decide you want to buy a property. Lots of people on this site are in debt of £40k. See it for what it is - a VERY nice problem to have!

BitterAndTwisted

Don't make any decisions now about what you are going to do with the money, bar investing it for a year or two.

You haven't graduated yet, so there's no knowing where your career may take you, or your boyfriends either, so what you really don't need is to be tied to a property and then not be able to relocate if you needed to.

Forget buying somewhere and then renting it out.

DVardysShadow

G_M wrote: »

Errr... lower?

Someone is paying attention. Well done that man.