Asking for a Friend - I just received a $5,000 gift from a relative. What should I do with it?

December 11, 2023

Question:

I just received a $5,000 gift from a relative. What should I do with it? I have a steady job, but I am only a few years out of college so I’m not earning that much.

Answer:

What a generous gift and I am glad that you are open to suggestions on the best way to use it.

  • The first question I would ask is do you owe any money on your credit cards.

    • If you do, I’ll bet it is at high interest rates.

      • Since you are working, I would pay off or pay down high interest credit cards before you do anything else. That will be a great return on your money.

    • If you don’t have credit card debt, do you have an emergency fund?

      • If you lose your job or have an unexpected bill, an emergency fund is essential and with money market funds currently paying 5% interest, that is a great place to consider stashing your relative’s gift.

      • Also, if you have student loans, you can use the gift to cover the monthly payment.


Do your friends ask you financial questions?
Pass those questions on to us at AskRPG@rootedpg.com and we will feature them in our future newsletters.