[USER]

Recently received a gift of $9,000 USD.
We are currently living paycheck to paycheck, sometimes dipping into savings for large, irregular bills like car repairs or heating oil.

Savings was meant to purchase a future house, but it is dwindling and housing prospects are pitiful, so that likely won’t happen any time soon.

We don’t have any debts, and have reduced spending as much as we can. Different jobs or moving are not in the cards at this time.

Would you keep all the money in high yield savings for future bill needs and building savings?

Put some in your Roth IRAs that haven’t seen any money recently due to current circumstances?

Something else I’m not thinking about?

[Kym]

If it was a gift for a house purchase, I would put it in a high yield savings account and ‘forget’ about it.

You’ll never get a house if you spend it on other things.

Cut your standard of living and save for that house while you keep working on increasing your income

[Crystal]

I’d take half and put it in a high interest CD and make some money

[Walter]

You need to address the problem with your finances. You do not have enough income to support your lifestyle.

You must either change your lifestyle or increase your income.

That may mean some uncomfortable choices. Unless you have millions in savings putting your money in a high yield savings account will not help your situation.

It may be time to change careers, find a second job or generate income through what is known as a “side hustle”.

[Diane]

I’d put some in the IRA (get the tax deduction) and some in a high yield savings & maybe open a trust account (those are not just for the rich these days) to protect funds later on from hospitals/nursing homes while still earning interest and having access to them.

[Elisabeth]

Save it in a high yield fund or buy a t bill. That way the money may still be available for future use if needed.

[Brenda]

High yield savings. Use as an emergency fund. But use only for TRUE emergencies.

[Jodi]

I would put it in an HYSA. You want it liquid if you are even thinking of buying a house.

[Kristel]

Save it.
But if you are dipping into savings for things like heating oil, that’s not sustainable and you’ll need to figure something out for your financial situation before that money runs out.

So put the money in a high yield savings account, and start thinking about how to ensure your life is financially sustainable by at least breaking even on your annual cost of living.

Where there’s a will, there’s a way.

[Corrine]

Unless you already have 3-6 months worth of living expenses in a savings account, I would suggest enough of the money in a savings account equal this.

If your savings is not already in a high yield savings account, would open one.

If there is money left over, putting it in an IRA is reasonable as long as you have no other debt

[Kaylene]

Definitely not the IRA based on what you described. Save it somewhere you can access it without penalty.

If things improve and you find yourself sure there’s spare $$ then think about adding to retirement savings.

[Jennie]

If you’re living paycheck to paycheck, I’d buy a freezer and set aside $600 to buy meat on sale and fill the freezer up.

I’d separate up your savings and have one for your future house, one for unplanned stuff (like car repairs or fuel oil), and one as your true emergency fund.

The only one you dip into is the unplanned stuff, the house one should be growing in funds, and the emergency fund should be staying static once it reaches the amount you two have decided.

[Ellen]

Put it in a high yield savings account that has free access to the money in case you need it. For now you have to think of the here and now.

Keep looking into better work prospects, as you already have a job you can take it slow and take your time looking.

Even if it takes a long time, it’s better than not looking at all.

Also, if it’s possible, try to see if you can downsize your current living costs by moving to a smaller, more affordable place to live.

You can also watch “Extreme grocery budget” videos on YouTube to help give ideas on how to lower food budgets.

You can try to apply for government assistance programs, such as food stamps, heating assistance, housing vouchers, childcare vouchers, tax exemptions etc.

You can also request low-income rates at your utility companies.

Call your local city hall and inquire into assistance programs and local tax breaks for low income, you can even inquire into low-income housing.

You can use food banks as well to help you with food. You can look into state healthycare or supplemental healthcare for low income.

You can cancel cable, just keep the lowest setting internet (shop around for the cheapest available in your area) and stream free places such as Tubi and FreeVee and other free streaming sites.

You can cancel your cell phone plans and just get pre-paid cell phones for emergencies.

You can also look into cheap service as well for cell phones such as Cricket.

Stop all non essential services and subscriptions you may have, like Amazon Prime and gym memberships and Kindle subscriptions etc (if you have any)

Good luck to you

[Laura]

I would do it in 3rds. Savings you can take from if needed now, 1/3 in cd that will earn more interest but can’t touch and 1/3 for an ira.

Now is important but when you hit 60 and have little to nothing for retirement that is a deal also.

[Krysia]

Do you really expect to be in a higher tax bracket when you retire? An IRA to lower your current taxes might be better fit.

But only as much as you can leave there and not withdraw.

Car repairs and heating oil are ongoing expenses.

[Brian]

High yield savings. Keep looking for a house. It might be rough out there, but prices aren’t coming down anytime soon.

It will be best to get into something as soon as possible.

Even if it’s not perfect.

[Marissa]

If it were me, I’d first look at my emergency fund. I personally like to have 6 months worth of expenses in my emergency fund.

It helps me sleep at night knowing that if my income were suddenly compromised for any reason that I could pay the bills for 6 months without adding more stress to an already stressful situation.

That gives me 6 months to figure out how I’m going to pay the bills after that time period. Plenty of time to course correct and get a new plan in place.

For you, your number may be 3 months, or any other number of months, but the point is it’s an amount that allows you to sleep at night knowing you’ve got your own back and you’ll be able to feed and house yourself and your family should your income suddenly disappear.

Once my emergency fund was fully funded, I’d then invest 15% of my income in retirement.

I’d work with a financial advisor to figure out how to best manage retirement savings.

If a need came about that caused me to have use emergency fund money to cover an unexpected expense, let’s say a $3k car repair…. I would pull the $3k out and fix my car.

I would then immediately pause my retirement contributions, and any other spending on non necessities, and put all extra money back into my emergency fund.

Once the $3k I took out has been recovered, I’m back to a fully funded emergency fund, I’d then resume contributing 15% of my income to my retirement. Rinse and repeat as necessary.

Just my two cents.

[Mary]

you could put most of it in savings where you can get it out if needed – but maybe use a little bit of it to increase the food in your house so you can make sure you are getting correct nourishment.

or get the oil chg’d in your car so it won’t be breaking down in the future.

[Jude]

You need an emergency fund before setting aside money for retirement. What could be on the horizon for future needs, expenses or repairs?

If your employer has a match for what you put into retirement, put money into that account too.

[Carol]

You need to think about now and you need to think about later. I would build your savings account for those emergency expenses, and I would start building my Roth IRA for retirement.

Stay out of debt and you’ll build both savings accounts really quickly. You are doing great.

[Judy]

Roth, depending on your portfolio. Or maybe CDs. I put extra $$ on the rare occasion it comes my way, into 12-18 month CDs My bank offers a 12 month with no penalty for early withdrawal after 10 days.

So, I get a better interest rate than just savings and the money is still available if I need it.

[Author]

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