I inherited $10,000 when my grandpa died and spent the money in 3 ways that changed my life

• When my grandpa died, my dad gifted my sisters and me $10,000 each from the money he inherited.
• I used it to pay off debt, buy a used car, and start an emergency fund. This set me on a path to financial security that changed my life.
• The gift also motivated me to start building wealth. Even though I don't want to have kids, I want to be able to show the same kind of generosity to my loved ones one day.
• Read more personal finance coverage.

A few months after my grandpa died, I woke up to an email from my dad with the subject, "Check Your Bank Accounts."

The email was sent to my sisters and me. It read, in part, "It amazes me that my mom and dad were able to raise seven kids on a single income. We weren't rich but lived a nice middle-class life. My mom was the queen of coupons." Knowing my dad, this didn't surprise me.

He continued, "What's even more amazing is that not only did they raise a family on one income, but they were also able to save. My dad left a significant inheritance to his kids and I want to share part of that with you girls."

He'd deposited $10,000 in each of our accounts. I couldn't believe it.

To someone with a massive trust fund, this probably doesn't sound like a life-changing amount. But for me, it completely changed my finances and the way I think about money.

I used it to pay off debt, buy a car, and start an emergency fund, and my entire life changed

Around the time I received that email from my dad, I'd been working for the past two years to pay off credit card debt using balance transfer credit cards; I'd accumulated the debt after moving abroad and changing careers.

My balance was down to $3,000, and I had just six months left before the 0% introductory APR would end and I'd have to pay the regular interest rate on my remaining balance.

The first thing I did that morning, after processing what I'd read, was log on to my credit card account and pay off my entire balance. Just like that, I was officially debt-free. It felt like a huge weight had been lifted - I could do anything!

I still had $7,000 left. Toward the end of the email, my dad had written, "Don't just pay bills, (although maybe you need to use some of it for that). Think about how to use at least part of it for something that's memorable and meaningful for you."

I thought for a while about how I could use the rest of that money in a way that would meaningfully impact my life, and not just in the short run. I knew I wanted to save a portion of it, but I also wanted to spend a little on something special.

I'd moved to Costa Rica several years prior, and I'd been living there car free ever since. While I do enjoy life without a car, it had become difficult to go anywhere without one because the rural town where I live only has bus service once per day.

Apart from making everyday errands a bit of a pain, living without a car meant I rarely got to take advantage of living in a country so filled to the brim with beauty, because going on trips to the beach or to a new hiking spot was such an ordeal.

So, I spent $3,000 on an older, used car that I paid for in cash.

Finally, I put the remaining $4,000 in a high-yield savings account. This would be the beginnings of my emergency fund, something I'd long wanted to create once I paid off my debt. As a freelancer with unstable income, and as someone living abroad, far away from any family, I needed one.

I've since built up that emergency fund to $30,000, leaving me enough to cover emergencies or loss of work, but also to invest in myself and take risks when opportunities arise. This has improved my quality of life just as much as being debt-free.

Why my family's generosity made me want to start building wealth, even though I don't want to start a family of my own

If you had asked me what $10,000 could do for my life a couple of years ago, I would've recited the things I could use it for.

I knew that money could help me in a material sense, but I didn't anticipate just how much it would shift my mentality, the sense of optimism and freedom I would feel to finally be on the road to financial security.

Achieving a sense of financial security changed every aspect of my life, from my mental health to my career to my relationship. While I could've gotten here without that $10,000, that timely boost was just what I needed to see the light at the end of the tunnel and realize that I was capable of taking control of my financial life.

This made me understand the power that even small gifts can have in a person's financial life, especially in times of need. I'd never considered wealth-building or worried about leaving something behind before because I didn't plan on having kids.

However, that gift from my grandpa made me realize that I didn't need to have kids to give back in the way that he had. If I could manage to build a little wealth, that would give me the power to help and support any of my loved ones if they one day need it.

I could save money to go toward a niece or nephew's college tuition, pay for my youngest sister to go on a graduation trip, or help my best friend pay for a costly car repair. Maybe one day I could take my dad on a trip as a thank you for everything he's done for me.

This motivated me to kick my savings rate into hyper speed and finally start investing for the first time in my life. The basics of wealth building are this: make more money, save more money, and invest more money.

I set a goal to increase my income as a freelancer last year and already achieved it, so my goal for this year is to continue moving steadily upward while further diversifying my sources of income for added stability.

My other goal is to save at least 50% of my income, made possible by the fact that I live with very few fixed costs - a low rent payment, thanks to living in a rural area, and no car payment - and a high income level relative to those costs.

That savings will be split between making sure I always have sufficient cash reserves on hand in a high-yield savings account and building my medium- and long-term investments.

At the end of last year, I opened an investment account with Vanguard and started with a basic three-fund portfolio, which includes three index funds: the Vanguard Total Stock Market Index Fund (VTSAX), Vanguard Total International Stock Index Fund (VTIAX), and Vanguard Total Bond Market Fund (VBTLX). This will be the foundation for building my net worth in the years to come.

If I were only thinking about myself, I wouldn't feel pressed to build wealth. I'm comfortable living on relatively little, and as I mentioned, I don't want to start a family. But my grandpa and dad's generosity made me want to be capable of doing the same for others.

• More savings and retirement coverage
• How to retire early
• The best high-yield savings accounts right now
• The banks with the best CD rates
• When to save money in high-yield savings

Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.