Just inherited $50G. How to manage this?

CatGarbler wrote:

My mom recently passed away after a long illness and left me some unexpected inheritance. Let me preface this by saying, in a heartbeat I'd give all of this back to have my mother back and healthy. That said, that's not the situation I'm in.

The inheritance is modest, $50G. My wife and I are awful at managing money, so I ask for honest advice, knowing full well what I'm getting into by asking on Lets Run. We have accumulated a mountain of debt over recent years, parts of which coming from expenses related to my mother's illness, some emergency surgery we had for a pet, and some unexpected home and car repairs. Much of the rest come from just plain mismanagement and family expenses. We have two kids.

Again, admitting my faults, and want to improve my situation. Some of the debt is really bad. Some of it isn't too bad. What's the best way to allocate this to get out of debt, and still have some set aside for the unexpected? We drive older cars (6 and 11 years old) and have a modest house in the suburbs. I bring my lunch to work.

Our mortgage has an interest rate of 3.75.

We have already college funds for our kids set up to mature very nicely by the time they are ready.

Our 50 year old house needs to be painted and needs new windows.

It pains me to admit this, but here is the rest of our debt:

Credit card 1 balance: $18,000 at 11.5%

Credit card 2 balance: $8000 at 15%

Credit card 3 balance: $3000 at 16%

Home equity loan: $14,000 at 3.75%

Car loan: $14,000 at 1.75%

Thank you for any constructive help you can offer.

CatGarbler wrote:

My mom recently passed away after a long illness and left me some unexpected inheritance. Let me preface this by saying, in a heartbeat I'd give all of this back to have my mother back and healthy. That said, that's not the situation I'm in.

The inheritance is modest, $50G. My wife and I are awful at managing money, so I ask for honest advice, knowing full well what I'm getting into by asking on Lets Run. We have accumulated a mountain of debt over recent years, parts of which coming from expenses related to my mother's illness, some emergency surgery we had for a pet, and some unexpected home and car repairs. Much of the rest come from just plain mismanagement and family expenses. We have two kids.

Again, admitting my faults, and want to improve my situation. Some of the debt is really bad. Some of it isn't too bad. What's the best way to allocate this to get out of debt, and still have some set aside for the unexpected? We drive older cars (6 and 11 years old) and have a modest house in the suburbs. I bring my lunch to work.

Our mortgage has an interest rate of 3.75.

We have already college funds for our kids set up to mature very nicely by the time they are ready.

Our 50 year old house needs to be painted and needs new windows.

It pains me to admit this, but here is the rest of our debt:

Credit card 1 balance: $18,000 at 11.5%

Credit card 2 balance: $8000 at 15%

Credit card 3 balance: $3000 at 16%

Home equity loan: $14,000 at 3.75%

Car loan: $14,000 at 1.75%

Thank you for any constructive help you can offer.

Scorpion_runner wrote:

Don't you dare put all of that money towards your debt. Rich people don't do that. Have you money make money for you.

Take 25,000 and put it towards your debt.

put 7,000 towards credit card number 1, leaving you with 11,000 in balance

put 5000 towards credit card number 2, leaving you with 3000 in balance

put 3000 towards credit card number 3, leaving with a zero balance - paid off.

put 5,000 towards your home loan, leaving you with a balance of 9000

put 5000 towards your car loan, leaving you with a balance of 9000

Now take the other 25,000 and spread it across mutual funds and ETFs, where you can generate 8 to 15 percent profit annually over the next 10 years ( depending on the fund that you invest in. ). Let's say 10 percent just to be in the middle, that's 2500.00 a year in gains, which is another 20,000- 25,000 in 10 years. All while still paying your remaining debt monthly.

Hell, you could even take out some profit withing 5 years to put towards your remaining debt and knock it out.

The bottom line is to have that money make money for you without losing it all. If you use the entire amount to pay off everything, you would basically be throwing money away. Have that money make money for you, and use some of the profit to pay off everything, but your money would still be making money for you.

CatGarbler wrote:

My mom recently passed away after a long illness and left me some unexpected inheritance. Let me preface this by saying, in a heartbeat I'd give all of this back to have my mother back and healthy. That said, that's not the situation I'm in.

The inheritance is modest, $50G. My wife and I are awful at managing money, so I ask for honest advice, knowing full well what I'm getting into by asking on Lets Run. We have accumulated a mountain of debt over recent years, parts of which coming from expenses related to my mother's illness, some emergency surgery we had for a pet, and some unexpected home and car repairs. Much of the rest come from just plain mismanagement and family expenses. We have two kids.

Again, admitting my faults, and want to improve my situation. Some of the debt is really bad. Some of it isn't too bad. What's the best way to allocate this to get out of debt, and still have some set aside for the unexpected? We drive older cars (6 and 11 years old) and have a modest house in the suburbs. I bring my lunch to work.

Our mortgage has an interest rate of 3.75.

We have already college funds for our kids set up to mature very nicely by the time they are ready.

Our 50 year old house needs to be painted and needs new windows.

It pains me to admit this, but here is the rest of our debt:

Credit card 1 balance: $18,000 at 11.5%

Credit card 2 balance: $8000 at 15%

Credit card 3 balance: $3000 at 16%

Home equity loan: $14,000 at 3.75%

Car loan: $14,000 at 1.75%

Thank you for any constructive help you can offer.

CatGarbler wrote:

My mom recently passed away after a long illness and left me some unexpected inheritance. Let me preface this by saying, in a heartbeat I'd give all of this back to have my mother back and healthy. That said, that's not the situation I'm in.

The inheritance is modest, $50G. My wife and I are awful at managing money, so I ask for honest advice, knowing full well what I'm getting into by asking on Lets Run. We have accumulated a mountain of debt over recent years, parts of which coming from expenses related to my mother's illness, some emergency surgery we had for a pet, and some unexpected home and car repairs. Much of the rest come from just plain mismanagement and family expenses. We have two kids.

Again, admitting my faults, and want to improve my situation. Some of the debt is really bad. Some of it isn't too bad. What's the best way to allocate this to get out of debt, and still have some set aside for the unexpected? We drive older cars (6 and 11 years old) and have a modest house in the suburbs. I bring my lunch to work.

Our mortgage has an interest rate of 3.75.

We have already college funds for our kids set up to mature very nicely by the time they are ready.

Our 50 year old house needs to be painted and needs new windows.

It pains me to admit this, but here is the rest of our debt:

Credit card 1 balance: $18,000 at 11.5%

Credit card 2 balance: $8000 at 15%

Credit card 3 balance: $3000 at 16%

Home equity loan: $14,000 at 3.75%

Car loan: $14,000 at 1.75%

Thank you for any constructive help you can offer.

CatGarbler wrote:

My most sincere thanks for those of you who have extended their condolences about my mom. The illness was sudden when it came on a couple years ago, but it gave me and my family time to accept it, begin the grieving process, and say goodbye when the time came. She's were I get my drive as a runner, to "keep going" when I'm hurting, and to not make excuses when things don't go my way. I miss her every day.

Also, very much appreciated is the advice on spending and managing the money. The home repairs (paint, windows) have been put off a long time. Windows are all original, and are drafty, and some rotting. The house is long overdue to be painted, we've put it off to have the roof redone and the foundation repaired. The car loan is one year into a four year loan of about $18G. The car is nothing special, but I need reliable transportation for my family and I, and considering our other vehicle (paid off long ago) is 11 years old. My previous car was 15 years old and had 250,000 miles. I take care of my cars and make them last.

I came to Lets Run for advice on this because frankly I've been having trouble making relevant and important decisions recently. I'm getting help for this. Immediately after the loss of my mom I got an awful running related injury that required surgery and will require four months of recovery. Throughout my life I have used running to help manage the stress in my life, and this time I'm unable to. I'm lucky to have a very supportive family and wonderful friends who have been there for me. Very lucky.

Thank you all.

Clam Evans wrote:

Scorpion_runner wrote:

Don't you dare put all of that money towards your debt. Rich people don't do that. Have you money make money for you.

Take 25,000 and put it towards your debt.

put 7,000 towards credit card number 1, leaving you with 11,000 in balance

put 5000 towards credit card number 2, leaving you with 3000 in balance

put 3000 towards credit card number 3, leaving with a zero balance - paid off.

put 5,000 towards your home loan, leaving you with a balance of 9000

put 5000 towards your car loan, leaving you with a balance of 9000

Now take the other 25,000 and spread it across mutual funds and ETFs, where you can generate 8 to 15 percent profit annually over the next 10 years ( depending on the fund that you invest in. ). Let's say 10 percent just to be in the middle, that's 2500.00 a year in gains, which is another 20,000- 25,000 in 10 years. All while still paying your remaining debt monthly.

Hell, you could even take out some profit withing 5 years to put towards your remaining debt and knock it out.

The bottom line is to have that money make money for you without losing it all. If you use the entire amount to pay off everything, you would basically be throwing money away. Have that money make money for you, and use some of the profit to pay off everything, but your money would still be making money for you.

Why would you put money in the market for an uncertain 10% when you have a guaranteed 11.5-16% return from paying off your credit cards?