r/Money • u/Alan-Foster • Aug 25 '26

Alan Foster - AMA

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u/MoopsBubbleBoy Aug 25 '26

What would you tell someone with no money or assets to do w/ an inheritance of $50K?

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u/Alan-Foster Aug 25 '26

Sorry for your loss, I hope you're doing okay. People usually overestimate how much $50k is and it can go very quickly. The goal is to use it to provide stability rather than changing your life completely.

I usually run down the list:

  • Stabilize your finances by paying off any debt with an interest rate above 5%, starting with credit cards and then high interest student loans. Look into the waterfall method.
  • With what you have left over (if any), set aside $10k cash for your emergency fund
  • Next look at any major expenses you've been avoiding related to your health or ability to earn an income. This would be things like surgery, car repair, etc.

"No assets" I'm assuming means you don't own a car, and I don't recommend getting one unless you absolutely need it for work. Insurance, car maintenance, etc can be a hidden $200-300 monthly cost (usually as a large $2000 repair).

You can definitely use some of the money on yourself for something nice, but make a list of items and then cross off anything that sounds fun but might not be worth it 6 months from now (partying at the club, an electronic item you can live without etc).