A Windfall

Last October, The Billfold asked a bunch of people what they would do if they got a surprise $20,000 windfall. Most people said they would use the money to pay off their debt, then save and invest some of it, and then use a little bit of the money to travel. My thoughts then were pretty much in line with everyone else’s.

And then last week, I got a windfall. My parents were left some money by a relative, and they gave me $6,000 to use however I wanted.

The first thing I did was max out my Roth IRA for the year before the April 15th deadline ($1,200 to hit the max of $5,500). I then took half of what I had left and put it towards my student loans ($2,400). The rest I kept in my savings account while I looked up the prices for plane tickets for this summer to Greece and Japan and Argentina.

Then, this weekend, while sitting in bed, I looked down at my tattered “alternative down” comforter and realized that what I should be doing is buying all those things I’ve put off buying over the past few years because I just couldn’t bear to see that money fly out of my account. So I went on a little shopping spree and bought:

• A nice down comforter from Overstock.com ($270 — goodbye old, gross comforter!)
• A Le Creuset Dutch Oven ($285 — stews, here we come!)
• A KitchenAid stand mixer ($250 — all of the mixed things, here we come!)
• A conical burr coffee grinder ($129 — all of the coffee, here we come!)

Total: $934 on things I’ve wanted to buy in the last 10 years but didn’t have the money (or didn’t want to part with my money).

Money leftover: $1,466

I’ve decided to donate half of the leftover money to a charity, and will use the rest for a trip this summer.

Where can I go with $733?

 

B. Benson is an office drone.

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17 Comments / Post A Comment

garli (#4,150)

Not that it matters at all but I fully support all of your purchases! Well played.

E$ (#1,636)

So practical, Bob! I recommend Montreal. Never been but everyone tells me it’s super nice, and getaway distance from NYC. Or if you can bear, save the money now and book a winter getaway for next winter. Miami maybe?

Heather F G (#6,074)

@E$ Montreal is WONDERFUL, and you can stay in beautiful, well-located hostels for about $60 a night. You should make it up there too! Everyone should!

pearl (#153)

You can go to Copenhagen from New York for $481! http://www.theflightdeal.com/2014/04/07/air-canada-477-york-copenhagen-denmark-roundtrip-including-taxes/ Their Twitter has NYC deals pretty regularly.

EA_Mann (#5,000)

or you could buy a vitamix and complete the creuset/vitamix/kitchaid trifecta of kitchen excellence. Once all three exist on the same countertop they start to glow and pulse in unison.

Allison (#4,509)

Airfarewatchdog is my go to for deals on wanderlust. Mostly it just fuels my wanderlust.

And man, this sounds like a really satisfying thing to do. Just the whole combination of saving/debt reduction/fun stuff/charity.

(Just checking that this $6,000 gift won’t have tax implications for you next year, right?)

OllyOlly (#669)

@Allison I believe direct family members can give gifts of up to $14,000 a year without tax implications (Actually wait, doesn’t have to be family -> Here WSJ)

Allison (#4,509)

@OllyOlly thanks! I was googling but got sent to random charles schwab pages

steponitvelma (#914)

@Allison A gift is not income to you, so you don’t have to worry about taxes. If it is over a certain amount, or is the result of someone’s death, then they may have to pay tax on giving it, but you would still not have to pay tax upon receiving it.
Sorry, tax nerd here, can’t help myself.

Allison (#4,509)

@steponitvelma even better. And if tax nerds aren’t free to comment on the billfold, I don’t know where they are.

ceereelyo (#3,552)

I like the way you spent your money and I wish you happy happy dishes with your new Le Creuset and KitchenAid mixer. I got both of these as wedding presents. The mixer was something I’d been wanting forever because I am a big baker, but the Le Creuset I added to my registry out of a whim thinking no one would get it for me (fortunately I have very generous people in my life!) and at first I was so scared to use it (IMMA BREAK IT) but I’ve been using it nearly every day for EVERYTHING. You can bake bread in it too!

OllyOlly (#669)

As someone with a dutch oven, burr grinder, and kitchen aid, they are worth it! Enjoy the new goods.

As for the trip, someone else mentioned Montreal and I second that. I would else just check where Jet Blue is running some <$200 flights, as they always seem to be doing.

pissy elliott (#844)

At the risk of being a huge, huge, huge buzzkill, is this money going to be a taxable event for you? Or is it just something within the gift exemption? If the former, save some damn money for taxes! If the latter, I recommend getting a Silpat if you want to bake things.

Allison (#4,509)

@pissy elliott go team What About Taxes! apparently the gift limit is $14K so he’s good!

Lana (#6,248)

My father passed away in February; I walked into my house yesterday to find the life insurance check glowing in a sunbeam on the counter so this is very relevant to me today. It doesn’t make me less sad but it does provide relief. I swear before you all that I will use all the good advice from the Billfold and finally get that IRA. I’ve called the insurance company three times already to make sure that there is no way I’ll be on the hook for any taxes or other fees. I also have about ten browser tabs open to things like best dermatologist in Atlanta, affordable personal training, and Zara.com… because retinoid/squat/retail therapy.

Lori D (#6,381)

@Lana I am sorry for your loss. When you receive a large amount of money, it’s a good idea to try and reduce or eliminate credit card debt and student loans. Additionally, if you have money leftover, a Roth IRA, if you are eligible, is the best way to go if you want to save and invest part of this gift. If you are quick about it, you can contribute before April 15 for 2013 ($5,500) and for 2014 ($5,500 up through April 15, 2015).
I like that Benson used some of the money for personal items, charitable giving and a future vacation. Consider something that will honor the memory of your father that you will enjoy.
I suspect a “financial planner” from the insurance company may be calling to let you know about annuities or life insurance. Unless you have a need for term life insurance (your current company may provide this as a benefit now anyways), politely decline.

Wow, this is awesome! You can go so many places! I’d suggest maybe Costa Rica or South America or Southeast Asia since the cost of living to monetary cost ratio is pretty good. Let us know where you decide!

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