How should I spend the money from my mother's life insurance policy? - Morning Brew

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I recently came into a large lump sum of money from when my mother suddenly passed away. Her life insurance policy gave me close to $195,000, which is more money than I ever thought I’d have. Since coming into this money, I’ve traded in my car for something newer/more reliable and have paid it off entirely. I’ve also paid off all my credit cards (yay for being debt free at 26!). I’m left with about $175,000 in my savings account.

Now I’m torn. Should I save the rest of the money to put toward buying a house…or blow it on a once-in-a-lifetime vacation to memorialize my mother? Any advice on what to do with what feels like a Scrooge McDuck amount of money?—Working Through It

I’m terribly sorry for your loss, but what’s heartening is that you seem to have found a silver lining in the face of tragedy. The money from your mother’s life insurance policy is, in its own way, a poignant gift that has essentially set you up for a very bright future.

Buying the car and paying it off in full is a big accomplishment, as is getting out of credit card debt at an age when most people are up to their ears in it. $175,000 is a lot of money—and frankly, if someone were to hand me a suitcase containing that amount of cash, I’d probably feel the same way you do. But allow some room for perspective—$175,000 isn’t quite Scrooge McDuck money, but it is life-changing in many ways. In short: If you manage that money wisely, you will never have to experience financial insecurity again. You will never have to worry about making rent, fixing a flat tire, paying an unexpected medical bill, or coping with any of the other catastrophes life throws at you. You can aggressively allocate your paycheck into your retirement account, and you can sleep at night knowing that your emergency fund has your back.

Unless you have an actual pressing need to buy property right now, pause on that notion. Signing for a mortgage may be more of a burden at this time in your life, unless you have a family or are “settled” in the traditional sense. This leftover money is more than enough for a robust emergency fund, but you don’t have to sock it all away now. Set aside $10,000—enough to feel extravagant without going overboard—for an experience that will memorialize your mother’s life, and divvy up the rest between an emergency fund and a taxable investment account that aligns with your future goals. I can’t prescribe how much you should put toward each, so speak to a financial advisor to figure out what allocation makes sense for you.

So take that big trip—and honor your mother’s memory by protecting your financial future, too. Allow yourself that kindness, while knowing that even though you’re doing something that feels expensive, you’re going to be okay.