Paulo and Natalia, a couple in their 20s, recently welcomed their first baby. But with student loans, modest incomes, and the added costs of childcare, food and healthcare, their finances are stretched thin — and they’ve had to take on more debt in recent months.
Natalia’s aunt recently gifted the couple a $55,000 investment portfolio — with one condition: no one else in the family can know. Keeping such a generous gift under wraps might feel a little awkward, but their aunt likely has her reasons. And for a young couple just starting a family, $55,000 can go a long way. While Natalia feels torn about the secrecy, she and Paulo are eager to put the money to good use. The challenge now is deciding how best to leverage it for their family’s future, with each option carrying its own pros and cons.
Here’s what they need to know to make the right decision for them.
The Education Data Initiative puts the average federal student loan balance at $39,075 in 2025 [1]. However, in combination with private loans, the actual balance may be as high as $42,673.
If you’re carrying a heavy load of student debt, a windfall can be a great way to knock down your balance faster. But if your loan amount is small and the interest rate is low, it may be smarter to just keep up with your monthly payments and put that extra money toward other financial goals.
For example, Experian puts the average auto loan balance at $24,297 as of late 2024 [2]. If the couple has expensive car payments, they may want to use the windfall to pay off their car. But if car payments are low and affordable, they can keep making them and use the $55,000 for something else.
The sooner you buy a home, the sooner you can begin building equity. As of June 2025, the median existing U.S. home sale price rose to $435,300, according to the National Association of Realtors [3]. With a $55,000 windfall, you may be in a position to make a down payment on a home and enjoy the benefits that come with it.
The Federal Reserve is expected to lower interest rates this September. Once that happens, mortgage rates could fall, making homeownership more affordable. If you’re buying a house for around $435,300, a $55,000 windfall gives you the option to make a 10% down payment and still have money left over for moving costs and an emergency fund.
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Cashing out the $55,000 portfolio could help wipe out debt and even fund a home purchase. But another smart move might be to let the money keep growing. Paulo and Natalia could split it into three buckets: a college fund for their baby, a long-term retirement account and an emergency fund with three to six months’ worth of essentials.
Let’s say they can live frugally on $3,000 a month. They could put $18,000 of the $55,000, or roughly one-third, into cash and a certificate of deposit ladder for a six-month emergency fund. Another third could go into a 529 plan for their child, where that money can enjoy tax-free growth. The remaining third can be the start of their retirement fund.
It’s important to remember that there is a gift tax exclusion of $19,000 per person this year. If Natalia’s aunt spreads that out over a few years with the $55,000 portfolio, she won’t incur extra taxes.
Because Natalia and Paulo are still young, $55,000 feels like a huge sum — and it is. Since they’ve never handled that much money before, talking to a financial advisor could help them figure out whether the investments they have actually match their future goals.
A financial advisor can help them make a smart decision based on near- and long-term goals for their family. For example, they may want to have more children, or eventually go back to school to further their post-secondary education.
These are things they can discuss with an advisor to make the most of the windfall. The advisor can also recommend specific investments based on risk tolerance and their timelines for when they want to spend their money.
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[1]. Education Data Initiative. “Student loan debt statistics”
[2]. Experian. “Average auto loan debt grew 2.1% to $24,297 in 2024”
[3]. National Association of Realtors. “NAR existing-home sales report shows 2.7% decrease in June”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
