Hi Jenni. My Grandma passed away last year and I inherited £60,000 from the sale of her house. Other family members inherited money too, but I don’t know how much exactly.
I’ve already spent almost £20,000 on a new car, a holiday, clothes, nights out, takeaways and gaming stuff. I don’t have any plans for the rest of the money. I just want to enjoy it and use it to pay for car expenses, uni costs, nights out and stuff.
My parents are insisting I buy a house with the money. They’ve said that if I don’t stop spending it on other things, they’ll kick me out. I don’t know if I want to be a home owner though and I’d rather just rent as soon as I finish uni. I don’t want to tie myself to a mortgage for the next 30 years just to keep them happy, but I also don’t want to fall out with them. What should I do?
Tom, 20, Chester
As the daughter of two very caring and protective yet somewhat controlling parents, I can identify with the predicament you’re in. It sounds as though your parents just want what’s best for you and they’re trying to save you from future financial woes.
Assuming your Grandma left you the money in her will (as opposed to your parents inheriting the money and choosing to give you £60,000 of it as a gift), it’s technically none of your parents’ business how you spend it. And yet, since you live at home with them, they have a significant amount of power over you. As long as you live under your parents’ roof, what they say goes.
I really think you should put this money to good use. Not for your parents’ sake – but for your own.
You’ve been given a brilliant opportunity here and although a third of the money is already gone, the £40,000 you’re left with is a sum most 20-somethings would kill to have. In fact, I’d argue £40,000 is a potentially life-changing amount of money. It won’t buy you a yacht or a small island in the Bahamas, but you could use it to give you choices, freedom and flexibility.
You can either use this money for fun stuff that will soon disappear and potentially leave you living pay-cheque to pay-cheque like everyone else, or you can use it to change your life. Which is it going to be?
I understand your concerns about buying your own home and if you’re not interested in becoming a homeowner right now, you certainly shouldn’t let your parents pressure you into it. You’re an adult and decisions like this need to be made by yourself.
Unless you work full time as well as being a student, you’ll probably struggle to get a mortgage now anyway – even with your Grandma’s inheritance. Hold your horses and remind your parents of this. There’s absolutely no rush. I think it’s also worth proving to your parents that you’re mature enough to use this money wisely. There are plenty of things you could do with it including:
Put £200 a month away in a Help to Buy ISA (in case you eventually change your mind about homeownership).
Alternatively, look into opening a Lifetime ISA.
Set aside a solid emergency fund.
Spread the money between high interest current accounts (saving accounts don’t offer great rates of interest right now).
Open up a private pension and save for retirement. If you have a job, look into a workplace pension too.
Invest in stocks, bonds and shares. It may be wise to get a financial advisor before doing this.
Although I don’t know your parents, it sounds like they care about you and if you prove to them you can manage your money responsibly, they’d be crazy to throw you out just because you don’t want to buy your own home. If they do chuck you out, this isn’t necessarily a bad thing. Take it as a sign that it’s time to exercise your own independence and stand on your own two feet. But please, use the money responsibly. Five, ten or twenty years from now when you have strong financial backing, you won’t regret the nights out, takeaways and X Box games you sacrificed.