[USER]

Hey there,
Needing some advice. Just inherited 100k. Wondering should I pay ALL debt off 50K credit cards/ loan and 50k vehicle (4.99%) or should I pay credit cards and keep truck payment and invest 50k in Vangaurd.

If pay truck off, considering selling the vehicle and purchase something less expensive.

update: just check with 1 dealer and carvana and 17K upside.

I am 38 and currently make 150k yearly

[Mary]

Definitely pay off all credit cards and DO NOT RUN THEM UP AGAIN.

[Alana]

I apologize if this sounds harsh. But before you use this gift to pay off your debt, I think you need to assess why you have 50k in credit card debt, and ensure you have a plan to make sure it never comes back! What is it from?

Is it general over spending beyond your income? (In which case you need to learn to live within your means before you pay it off, otherwise in a year or two you will just be back in the same position, but without the inheritance to bail you out).

Was it emergency expenses? (Make a budget, including your irregular/infrequent expenses, and set up an appropriate sized emergency fund/account for irregular expenses).

If you just use the inheritance to bail yourself out, without learning the hard lessons and making the difficult decisions, you are less likely to change your spending habits in the long term.

[Jodi]

Pay off the credit cards as I’m sure they are high interest. Then I’d assess how you ended up in a place with $50,000 in CC debt and make sure you’re Habits and routines around money are set up in a way that it never happens again.

Personally, I would pay off the truck the old fashioned/painful way….my husband and I have paid off A LOT of debt over the years (primarily student loans), and the lessons learned were painful BUT the most valuable.

We don’t take on debt anymore because we understand the total cost of that loaned money.

Unfortunately, some of the best lessons we learn are the painful ones.

[Christina]

pay off the high interest debt ASAP! you can sell the truck without it being paid off, unless you’re super upside down, etc.

[Gantt]

Your benefactor has bequeathed you the gift of starting over with a clean state. Honor her/him by paying off All debt. You’ll then begin anew.

You need a budget and read some financial gurus’ advice. That’s what I did when I was wealth building.

I read all the books, columns, online posts, etc. and whenever I saw the same advice mentioned, I began to adopt a strategy/plan.

Advice such as living beneath your means but within your needs, avoiding credit card debt, establishing a emergency/sinking funds, saving for retirement, etc.

Good luck!

[Stef]

Pay off credit cards. End the vehicle note. Invest whatever is left as well as what you no longer pay monthly.

Do a lot of examination to fix whatever got you here.

[Knee]

Fix your spending problem before you pay off the credit card otherwise you’ll end up right back in the same spot but no inheritance to bail you out.

Which came first, the $50K truck or $50K credit card debt?

[Sharon]

Wow!
We were in your shoes 15 years ago. But received no inheritance. Paid everything off including the house the old fashioned way.

You will enjoy being debt free.

[Sean]

You make 150k a year and have 50k of credit card debt? I’d put the money into a Hysa account and just figure out how to get your spending problem under control.

Selling the over priced truck would be a good first step.

[Rosenblat]

Pay off the debt, the truck, get something cheap, and reliable. Toyota, Honda or Mazda have decent cars. Look for around $5-10k and invest the rest.

Avoid indulging in luxury until you have at least 6 months of expenses saved.

Consider this a financial emergency and you just got a one time restart! Don’t mess this up!!!

[Amanda]

Have you ever witnessed someone (or yourself) get “Free Money?” Often it is spent several times over.

I can buy this, go on vacation, splurge a bit.
Happens all the time with lottery winners.

Think about the person who left you the money and be a good steward of it.

Make a plan. Percentage to CC/loans, emergency fund, and live below your means.

Open an IRA, you need not max it, just get it going.

[Christa]

My thoughts: I’m sorry for this loss. Don’t start over with a new truck. Pay off all credit card debt.

Pay down truck now that you have freed up cash flow from credit card payments.

Use something from this inheritance that is meaningful….as in think of your relationship to this person and see this as the gift from them that it is.

Honor them in some way.

[Cathy]

Pay off the Cards. And than think about how you got there in the first place. And how will you prevent this from happening again.

You make a really good salary.

[Bill]

I’ll be the contrarian. Most people who use a windfall to pay off cc debt end up right back in cc debt.

The behaviors that had you spending more than you make are still in place and lead to the same result.

So, unless you are already in the middle of an aggressive debt repayment plan (like you have already paid off $30k or so) I would put this money in a high interest savings account.

Spend the next 6 months spending half of what you make and use the rest to pay off debt.

Once you are safely on that path, then dip into your windfall to clean up the rest

[Cheryl]

Pay off all debt. Then the amount that is your current car payment should be saved and invested.

Don’t go into credit card debt again.

[Diane]

It sounds like you are ready to take control of your finances and this money could be your get out of jail free card. Congratulations on making that decision to use it responsibly!

I would pay off your credit card debt and invest the rest.

Keep learning and about to make wise choices from here on out you’ve got this!

[Austyn]

Three people I know and myself included have gotten into debt multiple times even know though I supposedly know how not to.

I recently came into a little bit of money and instead of paying off my credit cards I have been forcing myself to pay it off the hard way.

The best advice I read in the simple path to wealth is if you don’t fundamentally change your behavior, you will always end up back right where you started.

So, I instead took that money and invested it into my IRA I’ve paid off about half of my debt and I should be done with the rest of it by this summer and it literally took me downloading rocket money.

And going back a year of expenses to see exactly where my money was going For me, it was Amazon for my husband.

It was gas stations. It’s been two months neither of us have purchased a single thing from Amazon or a gas station and our life largely has not changed. We also cut our grocery bill in half.

So, I think it’s a blessing that you got into this position but if I were you, I would put that money into a high-yield savings account or at least some of it and some of it into an IRA and make yourself pay off that debt.

If you get bailed out, you will get there again

[Justin]

I would not pay off any of your debt since you are probably just going to run it back up again until you come up with a plan to actually get it paid off?

Did you know this money was coming and it just conveniently happened to be the exact amount of your debt?

[Jamie]

Why can’t you sell the truck and get something less expensive without paying it off?

I’d do that, pay the CCs, save a bit of an emergency fund, and invest the rest.

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