What to Do with $2500

I totally agree with the other mamma.....pay off any debts first...any debts....then whatever is leftover...put into an IRA! yea!! congrats on the windfall!

Sounds like you are thinking responsibly. When we have some extra unexpected money, we automatically stick it away for our daughter.

We are firm believers on Preparation.

Because of us being so diligent and disciplined with money, she is fully funded for college at age 13. What a relief that is. We stick money aside now for her wedding fund/down payment on her first house. We already have her first car purchased and paid for as well.

Your retirement is also very important. If you don't have an IRA, set one up.

Susan

I would put it toward any debts first. If you don't have any, then invest it into a Roth IRA or traditional IRA for your daughter. Compound interest will make it into a much bigger amount, and someday it will be helpful for her college.

I work in a financial setting. 1st pay off high interest Credit card debt. Always try to live cash only. After that you can open a Roth IRA and it will grow tax free. Or you can open a 529 and that is also tax free but limits the type of school your child can go to. A ROTH is a great acct because you can take the money out for Education expenses.

I like the Roth Ira or other education fund for you daughter. Or you could put it in a mutual fund but there are no guarantees it'll make money, though they usually do. You can also put it in a CD (certificate of deposit) until you have more time to think about it.

Check with your bank, they usually have a 6 month or 1 year CD option. Not great interest but it's better than a savings account and you can't touch it for the specified period of time, which is good.

You do not have to pay taxes on it, as it was a gift from you Dad and well-within gift guidelines.

Good for you for not wanting to spend it on stuff. Most of us have too much of it anyway.

Do you have any credit cards or loans to pay off? That should probably be your first plan of action. In the long run, it will save you a lot of money when you factor in the high interest most pay for these.

If you're living debt free -- congratulations! I'd say, put it aside for an emergency fund if you don't have one set up already. You should put it somewhere that will earn interest, but you can still get to it in times of emergency. INGdirect is good I hear.

You could also open an Roth IRA or an education fund for your daughter. This way it can earn interest and, over time, will multiply.

Bottom line... don't spend it (unless to pay off a credit card or other high interest loan). Put it away to earn some interest and multiply over time. Compound interest is a wonderful thing. Consider this an opportunity to become more financially independent and informed.

put towards daughters college fund and give some to the church or charity of your choice.

Definately pay down (or off) debt first. An emergency fund is always good too. I think they say to have 6 months worth put away. Few people do that and, as a result, end up in even worse financial shape (and usually of the credit card kind) when they have an emergency.

I've read that many people make the mistake of putting money away for kid's college first when they really should focus on retirement first. Not sure how you're set finance-wise, but it's something to keep in mind. There are always options for paying college such as scholarships, financial aid, etc, but few for retirement. You might split the funds with half (or some other fraction) going to a Roth IRA for yourself and the other part to your child's education. Obviously, there a lots of options and you should consider your current situation.

I agree with many of the responses. If you have high intrest debt, pay it off. If not definetley open a Roth IRA. Great investment!

I put in a saving account incase some emergency came up. Or have it for when your kids need something.

B.