I was in debt and struggling when an unexpected inheritance changed my life — and my son’s. I paid debts and invested wisely.

• I used an $45,000 inheritance from my grandfather to turn around my financial situation.
• I learned about finances, settled debts, improved my credit score, and invested wisely.
• I also invested my son’s $15,000 inheritance and have taught him about finances.

I come from a family where not only were we lower-middle class, but we didn’t talk about money. People like me don’t learn about finances because our parents didn’t have much to teach us. My dad raised me, and both of my parents had terrible credit scores. Unfortunately, I started making the same mistakes as them. I also started racking up a ton of debt in my 20s as I struggled with an alcohol and drug addiction.

But after years of sobriety, I received an inheritance of $45,000, and I was dead set on turning my finances around and ensuring my son learned more about personal finance than I ever had.

My finances weren’t in order before I received an inheritance

I’m extremely fortunate and managed to get sober in 2012 when my son was about three years old. During the years of my active addiction, taking care of my finances just wasn’t a priority. If I didn’t feel like paying a bill, I would just simply ignore it and hope it went away. I also broke multiple leases for one reason or another.

The iPhone has a fantastic feature these days where you can silence unknown callers, and I wish I had that feature back then because my phone was constantly ringing off the hook from collections calls.

Not only was I broke and in debt, but I also took out more payday loans than I’d like to admit. I eventually became so desperate that I took out a title loan on my truck as well. I failed to pay many of these loans back, and they turned into collections accounts as well.

Fast forward to 2021, and I received an inheritance of $45,000 from my grandfather, who sadly passed away the previous winter. It wasn’t nearly as much as some people, but it was more than many others. When I received such a large sum of money at a time, I didn’t know what to do with it.

I read anywhere from 100 to 300 non-fiction books each year, and since my grandfather made his money by investing, I decided I was going to learn everything I could about personal finance. I read dozens of books about managing your finances, repairing your credit, investing, and more. By far, the best book I read was “I Will Teach You to be Rich” by Ramit Sethi, who recently had a Netflix show on the same topic.

I used the inheritance to invest in the future for myself and my son

Although my finances were much better in my sobriety, I hadn’t checked my credit score in years, and this was the first place I had to start. To my surprise, it wasn’t as bad as I thought. I was sober nine years by this time, and due to the time that had passed, many of the accounts fell off my credit report.

There were still some collections accounts, and Sethi’s book taught me that I could settle my debts for less than I owed. It also taught me about “pay-for-delete letters” to get the collections removed from my credit report.

Once I took care of my collections accounts, I decided to invest the rest. The books taught me about the benefits of investing conservatively in S&P 500 index funds and saving for my retirement with a Roth IRA.

Unfortunately, I learned some tough lessons as well. I ended up losing thousands of dollars by taking bad investment advice from finance channels on YouTube.

My son also received an inheritance of about $15,000, and he was 12 years old at the time. I decided to invest it in a college and car fund, and I was much more conservative with his investments. I invested in an S&P 500 index fund and a global index fund. Within just a few years, his account has increased to over $19,000 with no additional contributions.

He’s 15 now, and I teach him about finance whenever I can. I show him his investment account and explain the thought process behind it. This last weekend, I was showing him how much the average annual salary has gone up, contrasted with how much the average cost of homes has gone up in America. He’s three years away from going to college, and I want him to understand more about money than I did at his age. I even added him as an authorized user to one of my credit cards so he has a good credit score when he’s 18.

Many of us come from backgrounds where we didn’t learn about finances, but when I received that unexpected inheritance, I decided it was time to break the cycle.