I have around 500,000 velocity points saved up.
We are a family of 4, 2 Adults and 2 Kids.
what would be the best way for us to use them??
Best way will be to enable you to travel to enjoy a destination that all four of you will enjoy. That will include it being destination where as a family will be able to do and share in the types of activities that you can enjoy together.
So that will be personal to your family.
What things do you as family enjoy doing together? The age of your kids will have a significant impact.
There is no point just getting a good redemption redemption, if the land experience will not be good for the four of you. So think about what you may like, what you might like to try, and what you know that you do not like
PS. My first big family redemption, was also 500,000 points. We redeemed 500,000 Ansett Airlines points (Well timed too as it turned out as Ansett went into administration two weeks later!) to fly return to Cairo and had an amazing time backpacking with our 3 daughters then aged 5, 8 and 11 through Egypt , Jordan, Israel and finishing with island hopping in Southern Thailand. Mind you 9/11 also happened after we had redeemed and so we could not get our points back if we did not fly, but SQ still honoured the redemption. For us though it was exceptionally good as Egypt, Jordan and Israel were all extremely light on for travellers/tourists. So no queues for us, and all land costs were extremely cheap.
Eldest daughter was stoked to go to Egypt, as at that time she was fascinated by Egyptian History, and that was key reason for us selecting the Middle East as a family holiday destination. Youngest daughter though chose not to go into the Mummy Room as a 5 year she was convinced that based on the cartoons that she had watched that the Mummy's would wake up and chase her!
And as our first really long flights (Three there!) we were somewhat apprehensive in advance of how we would manage to keep all three girls entertained. It turned at that was easy as we did not have gaming consoles at home whereas Singapore Airlines had just introduced gaming as part of the onboard entertainment and so we hardly heard a peep out of all three as they entertained themselves.
It was truly amazing family bonding experience which all five of us still look back on fondly.