Finance People - come in

[Deleted]

I am financially challenged. I just came into a small sum of money from an inheritance. I want to use it/invest it wisely.

A few tidbits about us:

-husband with strong retirement package (his co. matches 150% up to 6% of pay)

-I recently changed jobs and my new company does not "match" but gives an annual percentage based on age/years of service

-some credit card debt

- student loan debt

What would you do with it?

[ericalee27]

I am admittedly not the most financial savvy but I am on Team Pay ALL the Debt, whatever has highest rate, so credit card first, then student loan next

[callmeKD]

Do you have an emergency savings account? Is the inheritance enough to pay off the credit card, the student loan? Or oth or neither?

[emmyg65]

Put it toward the debt with the highest interest rate. But maybe keep a wee bit so you can do something fun like go out to dinner or buy a pretty outfit.

[Deleted]

We do have an emergency savings but the inheritance would not cover all of the credit card debt- most of it. Student loans- no

[beevol]

I would put it all toward the credit card debt, because even if that doesn't wipe it out it will mean lower monthly payments which means more money for you every month.

That being said, I'm also a believer that treating yourself helps you in the long run (whether it's the occasional brownie or the occasional shopping indulgence). So, if you've been keeping a tight budget, maybe use a little of the money to invest in an indulgence - good work shoes or a nice dinner out. But, if you are a regular indulger this advice doesn't really apply.

[welly01]

Pay off as much debt with the highest interest rate as you can. I also agree with the suggestion to keep a small amount ($100?) to treat yourself to something nice.

[supertrooper1]

I vote to put it towards the credit card debt.

[enigmaticdrscully]

I'd pay off the credit card debt.

[gamora24527]

I would also pay off the credit card debt because (1) student loan debt is viewed differently when you apply for credit (mortgage/car loan) and (2) the student loan interest is tax deductible but the credit card interest is not.

[Deleted]

Feb 21, 2015 20:19:15 GMT -5 gamora24527 said:

I would also pay off the credit card debt because (1) student loan debt is viewed differently when you apply for credit (mortgage/car loan) and (2) the student loan interest is tax deductible but the credit card interest is not.

Such a good point about the tax deduction.

[sandandsea]

I would pay off the cc debt and then vow to never get into cc debt again. Use this as the blessing of a clean slate. It's a one time thing so make it count. Start by saving one month of bare bones expenses, use the rest to pay off credit cards. Put together a budget and plan to get rid of all cc and student loan debt.

[pittpurple]

Another vote for paying off (or as close as) the credit card. I was in a horrible financial situation about 10 years ago (lots of debt after a very ridiculous spending spree with my first credit cards) and we worked on credit card debt first then school loans.

[jlaok]

I would also vote putting it towards the credit cards (and then work like crazy to pay the rest off). We follow Dave Ramsey's plan so I'd just go right up the baby steps.

[k3am]

Get the credit cards paid down, ASAP. Unless you've got a 0.00% APR, you're throwing money down the toilet every month.

[CoverGirl82]

Feb 21, 2015 10:42:11 GMT -5 beevol said:

I would put it all toward the credit card debt, because even if that doesn't wipe it out it will mean lower monthly payments which means more money for you every month.

That being said, I'm also a believer that treating yourself helps you in the long run (whether it's the occasional brownie or the occasional shopping indulgence). So, if you've been keeping a tight budget, maybe use a little of the money to invest in an indulgence - good work shoes or a nice dinner out. But, if you are a regular indulger this advice doesn't really apply.

I agree with this.  Also, if you don't have a 529 for your LO yet, maybe start an account.  I think when we started 529s for our kids, we have to deposit $250 to open the account.

[Deleted]

Thank you everyone

[Deleted]

Re motivated now to get rid of the credit card debt