I received an email today with a great question. Here it is “Hey Jeremie I’ve been reading your blog for about 2 months now and I have a question. I just ran into a pretty large amount of money. Well to me it’s big money. My grandmother gave me $2,500 and I am trying to decide what to use it for. I don’t have any debt, I’ve already maxed out my IRA for this year, and I have six months savings already built up. What should I do?”

First, I would like to congratulate you on your successful savings habits. It seems you are on the right on track to a very early retirement. I would love to be in your position right now! There are a few recommendations that I would do based on the information you sent me.

Do you own a home?
Yes- See if you need to purchase anything around the house that might need to be replaced. Small home improvements are always a great investment too.
No- Open a separate savings account for your home. Try to save around 20% of the down payment. I know it seems high but that’s just a target. Use a high interest online savings account.

Are you currently married?
Yes- Consider taking a small vacation with your wife. It’s always nice just taking a quick getaway before the holiday season.
No- Save for a ring so you don’t have to go in a huge amount of debt when you decide to pop the question. It’s always good to have some sort of down payment on the ring.

Do you have kids?
Yes- Start saving for their education. As you know even a little can go a long way with compound interest. “Compound interest is the most powerful force in the universe.” - Albert Einstein
No- Put more money into your online savings account and save it for the holidays or an extra rainy day fund.

You can also invest some into something that will create passive income. These are just a few suggestions I would consider doing.