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.
Just inherited $50G. How to manage this?
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50K? That wouldn't even take me to 9 a.m., you loser!
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Use all of it to get out of your debt NOW.
Your mother has passed away and left you money. Don't spend it on frivolous items. Use it to improve your situation financially. You won't have any regret spending that $50G if you use it to get out of your debt NOW. -
Do not put a single dime of that inheritance to ANY new expenses until you pay off those three credit card balances. Use the $50k on that. You will save yourself a significant amount of money wasted on interest.
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Step one: Google cars that cost 50 grand and buy one of them. I'd suggest since one can not buy a nice sports car nowadays for that amount. Put that money down as a down payment on a Audi R8 Spyder.
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Listen guy wrote:
Do not put a single dime of that inheritance to ANY new expenses until you pay off those three credit card balances. Use the $50k on that. You will save yourself a significant amount of money wasted on interest.
+1
Gotta go with Listen guy on this one.
Paying off debt is the #1 rule of good financial management. -
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.
Pay off credit card debt is a no brainer. That leaves you with 23k. Paint and get new Windows with that. Whatever is left out in your rainy day fund. And whatever got you all that credit card debt avoid that like the plague. -
Assuming this is legit and not a troll thread, I'll chime in...
First, condolences to you and your family.
Second, as mentioned by several others... pay the debt off.
My best wishes to you. -
You should take the kids out for ice cream and then buy yourself a good pair of scissors. Use them to cut up your credit cards.
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Sounds like something Trump would say. Lol.
Dickhead jerk from other thread wrote:
50K? That wouldn't even take me to 9 a.m., you loser! -
CatGarbler wrote:
Some of the debt is really bad. Some of it isn't too bad.
Your debt is a DISASTER, let's not sugar coat it. Sorry to hear about your mom. -
Down payment on a new trailer home, you clearly can't handle money and are going to waste it anyway.
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Is that why you're on LRC 24/7 Ghost?
Ghost of Igloi wrote:
https://mobile.twitter.com/RampCapitalLLC/status/1055169655533432832?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1055169655533432832&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fnews%2F2018-10-24%2Fmarkets-turmoil-sp-dow-erase-2018-gains-momo-massacre-accelerates -
Some people have all the luck wrote:
Ghost of Igloi wrote:
https://mobile.twitter.com/RampCapitalLLC/status/1055169655533432832?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1055169655533432832&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fnews%2F2018-10-24%2Fmarkets-turmoil-sp-dow-erase-2018-gains-momo-massacre-accelerates
Is that why you're on LRC 24/7 Ghost?
I look younger even though I am 40 years older! -
Sign it over to Flagpole. Let him get his typical 23% returns on the money. You'll have nearly $500K in a decade.
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Go to your nearest gas station and purchase 50,000 Mega Million lottery tickets. Win $1.6 billion.
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50k is not enough to pay off his debts.
To the OP: pay off the credit cards immediately. Set aside the rest in a savings account "I'm never using credit cards again" fund. The loans are not nearly as horrible as credit cards.
(it's fine to use cards as a convenience, but you must pay them off each month before you have to pay interest. For you, a debit card is a better option.) -
Doing blow off hookers' backsides and a pair of Nike 4% Vaporfly and you'll be back to reality here at LRC by Monday .
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dpaull414 wrote:
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.
Pay off credit card debt is a no brainer. That leaves you with 23k. Paint and get new Windows with that. Whatever is left out in your rainy day fund. And whatever got you all that credit card debt avoid that like the plague.
Your advice is sound, but your math stinks. He has 21k remaining after paying off the credit card debt.
One thing that I would add to the advice so far:
How TF do you have 18k in car loans when your cars are that old? You made a bad choice somewhere. The point of driving "older cars" is to avoid auto loan debt.
That being said, 1.75% interest rate is close enough to inflation that there isnt much incentive to pay it off early. You could definitely be forgiven to decide to keep a rainy day fund rather than pay that off now.
Why do you "need new window?" For aesthetics or are they leaky? If theyre leaking, definitely a worthy expense. If you just want to give your house a facelift, I would consider pushing that off. Dont forget to budget when your roof needs replacement as well.
