This guest post from Susannah is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes.
I grew up in an upper-middle class family that sent me into the world with a moderate financial education, no savings, but less than $10,000 in college debt. It was always understood that my parents were neither able nor willing to support me after college, and I didn't blame them, since my folks had me late in life, and they both retired while I was still in school. But I came away with a good start anyway, for which I'm very appreciative.
My father died suddenly in July of an utterly unexpected heart attack, and it's been tough. I'm his youngest child and his only daughter, and we were very close.
After his death, I was shocked by how much money my older brothers and I came into. My father never kept track of his money, but repeated the mantra that he “didn't have the money for anything” over and over. He worried about buying plane tickets to see family, and had piles and piles of unopened bills on his desk when we cleaned out his room. I've never been one to anticipate money — I've generally assumed that I'd have to work and conserve to make my way, and especially when it came to my dad, I fully expected to be supporting him entirely once my husband and I were settled into our lives and careers.
So, you'll understand that when the dust cleared, I was astonished to gross over $30,000 — and that's before his house was sold! I was amazed that my dad had an insurance policy, and at least two IRAs, one of which he apparently forgot about for 20 years. (Not a bad move, apparently.) I don't think he knew himself how much he was worth financially. It felt utterly surreal: This terrible blow of my father dying, and the universe apparently showering money on me in return. I'm still weirded out by it.
My husband and I have been wondering what to do with this windfall. My oldest brother has been bugging us about it. He and I aren't very close, and he's worried that I'm going to buy a yacht, or buy a tour bus, start a rock band, and go on the road. Seriously, these are things he's cautioned my husband about — only half jokingly!
I'll admit that I have been what some would call wasteful: After my father died, my husband got a last-minute job offer, and we moved five states away from the city I grew up in. This fall, I've chosen to just be a housewife and focus on supporting my husband through the last year of his Ph.D., as well as cope with the stress of losing my dad (as well as other violent upheavals in my life). That has sucked away a significant amount of money over the past four months, especially since my husband is making zippo as a Ph.D. student. But I'm going to call it a good choice for us. I've been very lucky to be able to make this choice, and I'm not forgetting it.
I set aside some inheritance money for “play” and charity. I bought a treadmill and a trekdesk in order to walk while I use the computer, and it's been great for my health. That was the play. I also just donated $1000 to RAINN (the Rape, Abuse and Incest National Network); I was spurred on by the controversy surrounding the Wikileaks rape case, and although at this point we're definitely tightening our belts, this cause means that much to me. (Thank God for my husband, one of the best men I'll ever meet. He has supported this decision fully.)
Although theoretically we could coast on the money from my dad's estate until my husband graduates and gets a “real” job, I'm planning to go back to work in January. I'm self-employed as a doula; that is, I support women emotionally and physically through labor and childbirth. I don't make a ton of money, but I love my job, and I anticipate being able to pull enough in to cover the gap.
Those are the selfish, non-saving choices I've made with this windfall. Here are some of the choices I'm prouder of from a financial standpoint:
- We finally have a solid emergency cushion, in a great money-market account. I've never invested before, and watching it grow by 1% every month is intoxicating.
- We've started IRAs this year, which has been terribly exciting. With the next check we get, I anticipate maxing out both IRAs for my husband and myself, and I'm going to thoroughly enjoy selecting the mix of investments. I'm 26 and my husband is 28. I'm really happy just to set these monies aside for the next 40 years. Go, bling, go!
Hmm…that wasn't as impressive a list as I'd hoped.
Now, we're looking forward to having our first child in the next year. I realize that getting pregnant with neither of us having what is commonly termed “good jobs” seems like a foolhardy choice. It's risky, it's true. But we have our reasons, and more importantly, we have our priorities; this is something we feel ready for. When my dad's house is sold, even in this market, I expect we'll have enough to see us through with a solid savings cushion. Even if we don't, a baby will still be a great blessing.
We don't anticipate wanting to buy a house in the foreseeable future; we've both been put off by the housing slump. I've seen multiple friends buy when they shouldn't, and wind up with a big money pit on their hands and no flexibility. If we buy a house, then it likely will be much further down the road. When we have a solid 20% to put down, say. We'll just save and invest for now, and see what the market is like when we have settled somewhere for good.
A Final Gift
So, that's a snapshot of our story and how we're coping with my inheritance. I have to say that I feel like this is my dad's last gift to me, of the many, many gifts he gave me. Because he managed just well enough to leave us something, I feel that we have a lot more flexibility, and we're starting off really well.
I know I haven't made the choices some would make to grow my wealth. But I don't mind being poor — I just mind being out of control. I feel like that's what personal finance is about: allowing folks the flexibility to make the right decisions for them.