by Reader Contributors

Do you have more money coming in than you spend? What is the best use for that money? Leave it for heirs, spend it, or give it away? Consider one or more of these uses for that extra money.

Dear Gary,
I have been more than frugal with my money in spending and in investing. Now that I am in my 80s and in good health, I have more money coming in than I spend. I do give my adult kids money once in a while, under the limit each year. What would be a good use for this extra money?
Bill

Give to Those in Need

While you have much more money than you need, there are many people in the world who don’t have enough. You are in a great position to help them by giving to charity. Choose a cause that matters to you, such as hunger or the environment, and then find good nonprofits that do work in that area.

CharityNavigator.com is a useful resource for finding organizations that will put your money to the best possible use.
Amy

Make Someone Else’s Life a Little Easier

Assuming that Bill has enough money to pay for any health care or assisted living he might need in the future, here are a few ideas for spending his extra money well.

First on my list is a charitable gift of any sort. This could be large enough to be an endowment or just a small gift to worthy causes that he supports. Before giving to any charity, he should be sure to know how much of its income goes toward the actual purpose of the charity.

Bill could also play it safe by naming charities in his will. By doing this, he will be sure not to run out of money, but the charity still gets help when he no longer needs the money.

If Bill has college-age grandchildren, he might also consider helping to pay for their college education.

Bill could also “adopt” a poor family or a needy child and make sure that they have the necessities of everyday life like food, clothing, shelter, or any combination of these. Many children go to school hungry every day, and for some, school is the only place they get a meal.

There are many more ideas out there. These are just a few.
Barbara in SC

Higher Education Is Costly

If you have grandchildren or great-grandchildren, set up college funds for them. We started saving for our son’s college education when he was born, but prices are simply outrageous, and even with scholarships, we were not able to save enough.
Helen

Give It Now

Give it to your children and grandchildren now up to the annual limit. It’s tax free for them now and they are at a point in life where they probably could use it. Any inheritance will be taxed as income to them.

Donate to your church, synagogue or other. I donate to specific ministries like food banks. Support your favorite charities. Set up an endowment. I have set up scholarships and children’s literacy endowments.
Janet

Save for Future Illness

My first thought is to save for the possibility of future illness when more money would be needed.

My second is to ‘adopt’ a family that is really trying but is struggling to get by. You can set aside money for their children to go to college as well as help with current needs like school supplies and groceries. If you want to remain anonymous, work through your pastor or trusted friend.
Debbie

Several Available Options

While I am not in your current situation, as I am a full-time divorced mom with four kids, I also happen to be the trustee of my grandparents’ estate, which I administered while they were alive and now oversee the annual distribution to the beneficiaries of the trust.

I would suggest that you could do several things:

1. If your adult kids have children, start a 529 plan (educational savings plan) for each one of them.
2. You can set up a trust, like my grandparents did, that allowed them to spend what was necessary for their living and medical expenses, but then the trust continues on and allows for the gifts to your children to continue for a defined period of time before the trust expires and is divided equally among them.
3. You could set up a small scholarship fund in your community. With the expense of college these days, even $50 is a useful scholarship to help pay for classes. Scholarships don’t have to last past your lifetime, so you could determine how you wanted to set this up.
4. Ask local charities if there is something they could use. For instance, the local food bank might need to have a new refrigerator or an additional one, and you could see the benefit of the use in your community.
   Kathryn

Make Memories with Family

Can the money be used to provide a nice vacation for all the kids and you each year? It would give all of you a chance to get together, enjoy each other, make memories, and have a great time without expense to the kids.
Kris

Generously Gift Two Generations

Fund your grand- or great-grandchildren’s college account. If you don’t have any, what about nieces or nephews, godchildren, etc.?

My father-in-law generously did this for my kids, and it has allowed them to attend colleges we could never afford. It has also allowed us and them to remain debt-free, so it’s a gift to two generations. You could even fund a deserving high school student recommended by your local school.
Julia in Greenville, SC

You’ve Worked Hard

Spend it on yourself. Take cruises and have a great time. You deserve it.
T

Reviewed April 2023