Seeking Advice on Paying off All Debt

We went through a similar situation in our extended family last year. Here's what I suggest you do that worked great for our family member:

- if the inheritance is more than $100,000, make sure you divide the money up among various banks so that it can be FDIC insured in the event that the bank closes.
- invest the majority of the funds in CDs. CDs right now are averaging about 5% return, which is much better than you'll get in the stock market right now. Put them in short-term CDs - 12-15 months max. Try to stagger the maturity dates of the CDs so that the funds will be available at different times rather than all at once. Then, as the CDs mature, you would have had plenty of time to evaluate your debt payoff options and can make a well informed decision about which debt to pay off
- Make sure you don't put everything in CDs; save a little out in case you need it in the meantime (i.e. to pay inheritance taxes or any unexpected bills or emergencies), but try to put this money in an interest bearing savings account. Some banks right now are offering introductory rates of 3-5%, which is great, but keep in mind that those rates are just temporary and will most like decrease over the next few months.

Debt elimination is a good thing, but keep in mind that your credit score is based on activity, so even if you pay off your personal and home loans, be sure to keep a credit card or two, use it regularly, but pay the full balance due each month. Having 100% equity in your home and vehicles is great leverage when you want to get your next loan (house, car, etc.), but having activity on your credit report is just as important.

No matter what you do with money, don't spend it all. Use it to start or add to savings for your family so that any emergencies won't put you in the poor house. Some people will recommend you buy something meaningful or a luxury you've always wanted. This is a great idea, but only if you already have something in mind and if this suits your personality. Some people aren't comfortable spending money on something like this and that's okay too.

First of all, I am sorry for your loss.

If I were you I would talk to my financial advisor for professional advice regarding what to do. Depending on the amount, there may be some taxes involved. This site is a good site for opinions but you need a professional opinion.

Personally, I think no drastic decision should be made right away. Put the money in a safe interest bearing savings account. Give yourself time to grieve, think clearly and objectively before you do anything with this money.

After these steps..........IF I were in debt, had children with limited college funding, or limited retirement monies...... I would certainly clear debt and cut up credit cards, etc. If you do use credit cards, just use 1 or 2 and PAY IN FULL every month. If there was money leftover from clearing debt, I would set up children/grandchildren's college funding, cover my retirement.

IF your retirement is set up well......I would maintain "rainy day" fund for unexpected expenses so that you do not get in debt again...

I know a lot of people say spend it on something nice to remember the person. Maybe the person who sent this gift your way meant it to be used to help your financial situation.

I realize there is nothing wrong with a small momento for sentimental purposes but not like buying a car, exotic vacation, etc.

From a personal standpoint, we recieved some monies this way. I am married to a numbers man so he plans and forecasts way out into our future. That said...the money we got was just a bonus. Our daughter's college was already fully funded so we started another fund for her for whatever she may need....wedding, first house, etc.

Take care and weigh out all options carefully. Also, I see that you are a teacher.....THANK YOU. You are in one of hardest, most rewarding, very important but less paying jobs in the market.

Best wishes to you.

I am just passing along some information I have learned from Dave Ramsey. You should pay off all debt (excluding home), then have 6 months worth of living expenses saved, then pay off your home and invest/plan for retirement. For more details, I would highly suggest buying Dave Ramsey's book. My husband and I definitely don't follow all of the principals, but it has absolutely helped us get our personal finances in line.

I am sorry for you loss. I had this happen to me about 20 years ago. My mother's sister died and I received a portion of her estate. Since it was my aunt and my husband never met her it was my decision to do with the money whatever I wished. I purchased a grandfather clock (we were in Germany at the time) with the understanding that the clock would go to my daughter as it was from my mother's side of the family and not my son. My son has received other items of value. Some bills were paid but it was my decision which. Do put some of the money up for a rainy day for you (I know it may seem selfish but you were the one to receive the money and it should be your decision). Stand strong on your decision of what to do with the money do have a "mad" fund. Good luck to you. The other S.

First, S., let me say that I am so deeply sorry for your loss. I lost my dad a few years ago and I know how hard it is to lose someone you love. I am sorry.

My husband was awarded some stock options from his company in 2000 when it was bought out by a larger company. We opted to pay off our house. We were advised NOT to from our financial planner and our fathers because we would not get the tax deduction for our mortgage interest. Maybe other reasons-- I am not big on understanding finances myself. We did it anyway. I will tell you we have NO regrets!! After 9/11, the stock options remaining were worth SO MUCH less! Now with the economy the way it is, we know if he loses his job, (I stay home), our home is paid off and so are our cars. It brings us a great deal of security. Plus, the amount you end up paying in interest over the course of a mortgage is staggering. I would say that would be a very wise investment.
Good luck to you!
A.

from someone who hasn't had a car payment in over 6 years, paying off your cars is a great way to go and let me tell you it is soo freeing to live debt free. Whenever my grandfather passed away we spent about 10% on charity, (i think it's important to count your blessings and give back)5 - 10% on something special for ourselves (we are going on a cruise) and then we put the rest of the money towards debt and savings. I am a dave ramsey fan so i agree with looking into what he has to say. I also firmly believe in a good emergency fund (one of the best ways to take out any stress in your marriage) So i would start there.

I think the knee-jerk thing is to want to pay off all debt, but it takes money to make money. Certainly with today's economy, there aren't many investments that are making much interest, but it will come back and if you paid everything off and no longer have a nice lump sum, then you can't use it to build more wealth. My husband and I came from extremely modest backgrounds and have had no financial help from anyone. We do not owe any money, other than our mortgages. We have three houses, but otherwise, we are debt free. Our mothers each live in one of the other houses. We have enough money in the bank to pay off most of the mortgage debt, but we choose to keep that money so that we can make money from it, through investing. Cars are pure expenses, as are pretty much any other loan, but your mortgage is an investment. Sure, I would make every effort to pay mortgages off early, perhaps refinance your loan for a much shorter period to reduce the amount of interest. However, as many people mentioned, you need activity to keep your credit score up and you benefit from the tax write-off. My #1 piece of advise is to talk to 2-3 financial planners to get more than one professioanl opinion and take your time with the decision and go with your gut.

If the money will help eliminate your debt then what is the problem? Your debt is money you OWE and have promised to pay back. You have just been handed a "free pass" to pay it off.

D.
SAHM of two; 18 and 5. Home Baker and Candy Maker. Married to the same wonderful man for almost 12 years.

The money is yours. People expect that you will have car,home debt. The money is meant for you. You are not being selfish in this thinking...
Take care of YOUR student loans, and possibly creditcard...you may need that money for an emergency such as health or job loss.

i would agree that you definately want to make sure that you don't have to pay taxes out of it before you use it all to pay off your debt. After that I would pay off debts like credit cards first, then cars, then pay on your house. unless you have enough to pay off your entire debt then it may be better to keep paying on your house for tax reasons.? Maybe you could talk to a financial person at your bank. usually banks offer at least some minimal financial advice for being a customer without having to look somewhere else for financial advice you'd have to pay for. also it may be wise to invest some in a college account for your kids, i think these also have tax benefits depending on how they are set up.
sorry for your loss, but good for you for doing the right thing!

Wow....lots of advice on this topic. I agree with paying off debt (and I have been to a Dave Ramsey live event - wonderful).

I would add just one thing. Take a little of the money and have the family plan something charitable. Find a family that is really in need and use the money to help them. At the same time, you may find that you develop a friendship with the family and you may discover that money isn't the only thing they need. You will get back so much more than what you give. I was the contact person years ago for our department Christmas charitable "adopt a family." I am still close to the family and it has been a blessing.

Pay off your largest debt ie mortgage. Invest the other and when your investment "earns" take the "earnings" to pay off other debts. Good luck.

I agree... Have an emergency fund that covers 3-6 months living expenses just in case of job loss, major illness,etc. Then use the rest to pay off everything you can.

Check out
www.daveramsey.com
570am m-f from 1-3

First and foremost, pay off the credit cards. The interest you're paying is probably driving you nuts.
Second, pay off the car. An earlier observation here was that paying off a car is throwing money down the tubes, but that's far too simplistic. Every car depreciates and devalues with every mile driven. The only way you come out ahead on a car, the ONLY way, is when you owe nothing and keep driving it. Plain and simple.
Instead of paying off the house, refinance. With an exemplary credit score, you may get a rate of 5.0% or lower right now. But, NOW, and probably not even next month, is the time to do that. Pay off half of the principle balance, then refinance the rest for 15 years. You'll continue to pay taxes and insurance - why not keep it in escrow?
The other half of your principal balance, whatever that value is, invest that amount in a 10-year CD as a college fund or something.
You have options and the opportunity to make good from an unfortunate position. Good luck.

Hi S.,
I'm sorry about your loss. We inherited money from my husband's father. We went to a CPA concerned about what to do and how to spend/save it. We were told to pay off all credit cards first, then car loans and then to place any additional against our mortgage principal. We did so and we have been totally debt free with the exception of owing around $40K left on our mortgage. It gave us the freedom to use credit cards with rewards and to pay them off each month. We use the rewards for taking kids/grand-kids places with all airfares paid in full.
Take this opportunity to secure a better future. I agree with others, don't splurge on some item you don't need right now as you'll be free to get that later.
Good luck to you, Bev

Your husband's right; it's in line with what everyone else is suggesting, which is the Dave Ramsey plan. However, like you said, you are still in shock right now. There's no need to rush. Just stick the money in a savings or money market account and just give yourself a couple of months to cope. Then you can look at this money with fresh eyes and be more objective and not be hindered by the emotions of grief that you're dealing with right now. I still say do what your husband wants to do and pay off all debt, but give yourself some time so you don't feel so rushed and you have time to think more clearly. Then you can see this money as the blessing it was meant to be to you.

My husband and I are working to be debt free. We have taken the Crown Financial Bible study at church. I also watch Dave Ramsey on the Fox Business channel every night. My advise to to make sure you have an "emergency fund" of $1000, then pay off ALL of your debt! Proverbs 22:7 says: Just as the rich rule the poor, so the borrower is servant to the lender.

If you have any questions, please contact me.

Your husband is a wise man. Just remember to keep your same budget and save all that money you're going to have left each month with no debt. If you do that, you'll be able to live very comfortably in your old age. Maybe even have a few nice vacations as well.

Congratulations! Being debt free is the best feeling in the world. Don't ever pay interest on anything again! That's buying power. You will never regret it.

Dave Ramsey is the best!

I agree with your husband! Eliminate all debt!! Start with credit cards, then car loans and any other loans/high interested debt. Then make sure you have enough in a savings account to pay 3-6 months bills in case one or both of you loose your job. Finally, pay off the house. I wouldn't pay off the house. Then, when you don't have a credit card payment, car payment, or house payment anymore, you can save and then do anything else you want (get new carpet, go on vacation, etc. - after you've saved enough to pay cash). Also, then you can save for your kids college fund too. Living debt free is really freeing!!

S.,

I am so sorry for the loss of this family member, and how very special that she or he thought so much of you to leave you some money!

If this death occurred recently, I think you should hold on to the money for a few months to give yourself time to grieve and to think. I just read on a website last night that the economy is going to be bad and possibly worse over the next 3-4 years, which is why I only say hold onto it for a few months (you don't want the value to depreciate).

Then, depending on the amount, I would allot a certain amount of the money to go towards debt, but I would use the bulk of it to buy something meaningful, that will last. I wouldn't put it towards a home or car or paying off all the debt. Depending on the amount, I would buy something that would always be a way to remember and appreciate this family member. If you like antiques, perhaps buy a beautiful antique table or other piece of furniture. Or, if it fits your family's personality, buy a piano. Or a couple of pieces of very nice jewelry that you can pass on to your children, always reminding them of this special person in your life. Another meaningful thing you could do is establish a small scholarship at his or her high school or college, or make a charitable contribution to a place that will honor her memory (for instance, sometimes if you contribute to a city park, they will put your name or "in honor of" on a portion of a sidewalk, stepping stone, or plaque); a friend of my husband's contributed a park bench to his mom's church in her memory, with her name on a plaque; high schools sometimes put names on bricks in sidewalks or walls; churches and libraries often recognize a contribution in someone's honor by placing a card in a hymnal or book....

I guess my point is: if all you do is pay off debt, it will be gone, and the very special gift this person gave you went to a very dull, pedestrian fact of life instead of to something meaningful to you and honoring to her/him. We'll always have debt in our lives, on some level! The minute you pay it off, you'll probably find yourselves slowly accumulating more debt, and you'll think "where did all that money go?!" I think if you spend it on something special, then in the long run, you'll have something special in your life to always remember this person by, and I think it brings more respect or honor to that person to put most of it towards something that will last through the years. Another last thought is to use it towards a very special family vacation that you otherwise would not have been able to afford. The memories and pictures from that would be another thing that would last well beyond paying off debt.

Remember that this family member probably means much less to your husband than to you. And if it were "his" money, what would he really do? It sounds practical to pay off all the debt, but I think a gift should be used more carefully than that. My last thought is, if for some unlikely reason you and your husband ever divorced, it may be a bitter pill to swallow to think such a special gift was spent on something that just didn't mean that much in the long run.

The Dave Ramsey advice is best! Pay off debt, do not invest until debt is gone, and then invest in Retirement. You should get the book.

We used inherited money to help pay off our house note. That was over 10 years ago, and it was by far the best thing we ever did. We don't owe anyone any money. We pay off our credit cards in full every month. We have money in a college fund for our daughter, and when it lost a lot of value recently, we had enough cash on hand to make up the losses (and we really hope the market doesn't crash further, though we have a long time before our daughter will need the money for college).

I like the way someone else put it below--the debt is money that you owe other people, and you will have to pay it off anyway. This money will help you do it quickly without having to scrimp and save so hard. I know you'd rather have your family member still with you, but wouldn't he or she be happy to know that you have peace of mind and a new sense of control over your finances in such a troubled economy? Getting out of debt and staying out of debt is the greatest feeling ever, I promise.

You can't go wrong paying off credit card debt. The cars and house is a little different. Is it hard to make the payments each month? Do you have the willpower to save that same amount of money each month? Look at the interest rates. Look at tax deductions. You may be better off putting the money in the bank.

Living a debt free life would be nice. No credit cards are always good too. Don't let someone talk you into doing something you will regret later.

Hi S.,

Get TOTAL MONEY MAKEOVER by Dave Ramsey. It's an easy read - easy to follow. BEST of ALL - IT WORKS!!

I am believing God's Best for you!

D.

We just started doing the Dave Ramsey program a few weeks ago. It is definately challenging at first but I am getting the hang of it. If you would like some of the spreadsheets let me know beacuse I have the budget spreadsheet for the entire year plus the debt snowball form. It allows you to put in your debt and how much you and it will show you how long it will take to payoff. Let me know

Listen to Dave Ramsey on KLIF 570 am or go to his website DaveRamsey.com. I urge you to do it right, now that you have the chance. You could change the way your family lives for generations if you get your priorities in order now about money. If you get out of debt stay out of debt! Dave is a good Christian man and will tell you don't do ANYTHING till you are over the shock and greif and till YOU UNDERSTAND everything you are signing or doing!
B.

HI S.,
I don't see a problem, is there a problem? The smartest thing to do is pay off all of your debts. In this economy you can't be too careful. Then you can concentrate on other things like starting a college fund for all three kids and continue to pay into your retirement fund.
And if that doesn't suit you. Give me the money. I could sure use it to pay off our debts. LOL!

I am sorry for your loss. I second the suggestion to check out Dave Ramsey. You don't actually have to go through his whole program, but just get a feel for his suggestions. You can probably even get what you need just by listening to his radio show one afternoon. But yes, I agree pay off all debt. You can't go wrong with that. If you leave anything outstanding, make it just your mortgage since you at least get a tax deduction on that. Good luck.

Paying off the debt is a wonderful idea! Before you do that though, you should make sure you have at least 6 months of income socked away in an emergency fund that doesn't get touched (except for job loss & emergency of course)....then pay off the debt. If there's still some left after that, then you could research further what kind of investments/IRA/CD/etc you want to put it in. Check out www.daveramsey.com and look at his "baby steps". That might help you prioritize where the money should go.

Good morning S.:
Now is the best time to get completely out of debt. If this is what you want to do it is best to have a plan of action written down on paper. I HIGHLY RECOMMEND going out and buying DAVE RAMSEYS' book "THE TOTAL MONEY MAKEOVER". Dave has a website that I highly recommend also for you to visit and he also has a very educating radio show! Dave is a very wealthy and high sought after millionare. He does siminars all over the world helping people get their "Snowball" going. Credit cards and loans are not something to seek out for everything you need. If you need something it is best to pay cash for it right then and there. If you do not have the cash then you do not need it. Anyway, that is not what you asked, S. it is the greatest feeling to get out of debt, very empowering! Mr Ramsey himself has a "ZERO CREDIT SCORE". He is a neat man and very intelligblein this area. The things he shares in his book and talk show are exciting and will open your eyes. Even the Wealthy will tell you that that use their money wisely. If you have the money again, pay cash for your purchase instead of financing! This is what the wealthy do! How do you think they maintain their wealth? Buy being smart with their money and NOT going into debt! Sorry for rambling but I just feel very strongly about this and I know the awesome journey my hubby and I are going thru by getting out of debt. This nation is so focused on staying in debt, just look at this latest bailout Obama just got passed! You think the government going to pay it back?!?! NO! You and I are! So, you can see the less debt you and I have the better off we are! Tougher times are coming and those of us with a plan to get out of debt and maintain that will be better off than those that chose to stay in debt. That is right, I said chose as we have a choice to change that status. We don't have to keep up with the Jones'cause the the Jones' just simply have more going out then coming in, making the financial worth a great big "ZERO"! Go out and buy "THE TOTAL MONEY MAKEOVER" today and it will help you use that money wisely. With this economy you can't afford to not want to wipe your debts clear!

Make it great day!
A. C safenhappyhome.com

A LITTLE ABOUT ME:
I work fulltime outside the home and also run a catalog compnay out of my home. Been married to the man God choose for me for 11 1/2 years and would'nt have it any other way!

I'm sorry for your loss. Sounds like your husband is on the right track with what to do with the money. It is nice that your family member was able to give you one last blessing by helping you reach a goal of financial freedom.

M.
"Our doctor misses us. So does the pharmacist."
Visit my Mamasource profile to find out why!

If your husband is anything like mine. If I were to use the money to pay off all debt, it would just be a reason for mine to go buy more. Look at your interest rates. Even the wealthiest people still have loans and credit. They just use it smart. For example...If you have $50K and want to buy a car. Wealthy people still get a loan. But this way they show the banks they can pay for it, so they get a very low rate at maybe 3-5%. Then use the money to put in the stock market.
My children model, and have made a nice bit of money. I invested it in the stock market right before it plummited and we where making 10-20% return. Now if I would have paid off my debt I wouldn't have any now. (Luckily, I took it all out right before it plummitted) But if I hadn't, the way I see it when my kids are 18 and ready to get their money the stock market will go up.
In my opinion, I would pay down some, but keep a good bit and invest well. Now might be a good time to look into realestate. My goal is to buy a really cheap forcloser and rent it out so they pay the mortgage until I am just making cash every month. Just remember you have the upperhand and can shop around for interest rates when you have cash!!
I don't know if this is what you where asking, but email me if you have any other questions. I'm not a financial planner nor do I have my series 77. I just want to be smart about money so when I retire I have cash :)
Good Luck!!

First of all, I am very sorry for you loss.

I would highly recommend you check out DAve Ramsey's website, www.daveramsey.com. He has a financial plan for getting out of debt and creating wealth. You can see where you are in comparison to what his plan recommends and decide where to go from there. You can also listen to him from 1-4pm on 570am KLIF weekdays (well, after school for you anyway) He is also on Fox Business Chanel, at night, during the week. If you don't have that channel, you can watch for free on www.hulu.com.

Being debt free definitly frees up all that money you are putting into payments. You can then save that "payment" money up and do whatever you want!

Good luck! A.

I would pay off as much as you can - especially credit cards because the credit card companies are raising interest. Then pay off the cars. If you want to save some cash for a rainy day don't pay off the house as the interest is tax deductable and keep that, but remember some investments are not paying off like they used to. This is just my idea - I am by no means a financial genius. If you pay everything off you can always put what you were paying in payments into retirement.

Good luck!

I say eliminate all the debt now. Whatever you were paying for the house and cars, increase that into your retirement account, and some into a liquid account that can be accessed immediately should something happen. All the main money Gurus, Like Suze Orman and Dave Ramsey all advocate paying stuff off as quick as possible. Don't be foolish. Pay stuff off. Then live frugally as if you did not pay stuff off. But the main thing is to not incur any further debt. From anything. I would strongly pay stuff off. You won't be sorry you did.
L.

I am sorry to hear of your loss....I would say it depends on how much it is. If it is a large amount over $20K I would check and make sure of the TAX situation unsure of all of the details regarding that. You want to make sure you don't "use/spend/invest" it all and then are not able to access it if you need some of it to pay TAXES (inheritance/estate tax) or if you need to claim it. If a large amount I would keep it safe in the bank and do some research first-- maybe the tax is/was taken out before you recieved it??? Unsure do some research.
Then after the tax situation is take care of... yes pay off debt maybe 60% of the $ pay off debt (and don't accrue any more debt...cut up CC cards and live within your means...and save %20 in a VERY save place and invest %20??? good luck and consider this a very special sit. to get you back on track debt free....

Dave Ramsey would tell you to pay off debt, spend a little on something fun, give some away, have 6 months emergency fund in savings (not investment- a cd or money market account), and then invest. Wise advice, I think.

A.

I'm sure this is int the advice given so far, but I didn't read all 40 yet! go to daveramsey.com he will help you make a plan to pay off all of your debt. Listen to his show on the radio- 570am 1-4 weekdays. It is great! It's just regular people with regular lives trying to get out of debt. He does a debt snowball. Pay off the smallest debt first, then throw that money into paying off the next debt and so on. It's great! We will be complety debt free except the house in by the end of March!
He has a lve event show in Dallas March 28th. I don't know if there a still tickets left- but it wouldbe worth it to go. When I bought my tickets they were only $35 a peice. I think the event is 4 hours- I could be wrong. He will help you find the hope you are looking for to get through this!
~C.

My boss is a hugely compassionate, very wise, financial planner. Please let him help you to do the right thing. Call me at ###-###-####, J.. I can arrange a meeting for just the two of you, and then you can have him also meet with you and your husband. Or you can include your husband the first time. Whatever you like. Of course, there is no charge. Please do this. I came into some money a few years ago, and we even had a FP, but he didn't advise us at all, and the money is all gone.

DO IT!!! Pay off the debt! When your payments are gone, you can then pay cash for things you want. If we got money, that is definitely what we would do!!!

Firstly, I agree with some other posters that you should, for right now, put the money in a safe interest-bearing savings account for a couple of months to allow yourself time to grieve. When you're beginning to feel on your feet again, go to the library and check out Dave Ramsey's book "Financial Peace Revisited." Read it. Then pay off all your debts, and follow Dave's advice about what to do with all the extra money this will "win" you in your monthly budget.

I'm very sorry for your loss!

I would suggest paying off the debt with the highest interest rate. Keep doing that as far as the money will go. It may be tempting to splurge on something big you've been wanting, but what a God-send to help pay off debt! You could celebrate with a family dinner out or something, but get rid of that debt!!

I am not clear on what you mean by "do the right thing"? Do you want to give all this money away to those less fortunate? I say pay off your debt, starting with credit cards - then cars - then the house. Just imagine how much extra money you will have each month without those bills. Then you will be able use your monthly cash flow to help those less fortunate. Right now, you are only helping the banks and credit cards with all that interest you're paying.

I had something VERY similar happen to my husband and I and I can tell you this... the GREATEST thing I have ever done is go to Dave Ramsey's Financial Peace University Class and then it tells you what to do and HOW to do it so you NEVER get into trouble again! It's life changing... just a suggestion, but it will change YOUR life and the life of your family! Congratulations... what a blessing!

www.daveramsey.com

My husband recently lost his step-dad and it is hard. We paid for half the arrangements. My suggestion is do both but a little at a time. Pay off your smallest bill with the lowest intrest rate first. This will make paying the rest out of your regular income easiser, because you then save that monthly payment to put towards the next payment. Start saving the rest in a savings account, mainly because times are tough.

paying off your debt is the best idea. you will not believe how free you will feel. it could seem sad in a way to send alway all the money you inherited but when you see how much you save after not paying interest rates etc it will be worth it plus there is the peace of mind knowing that if you or your husband or both are layed off or disabled suddenly you will not have those to worry about. you will be able to send MORE to savings, do MORE with cash (pay at the moment instead of credit) and just be free of all that. we are working on paying our debt off and it's slow...getting the gift of a large sum of money is stupendous and one of those once in a lifetime opportunities to use it wisely. yes, look into dave ramseys approach for more info. basically it will involve paying off the highest interest rates first and so forth. good luck and i'm sorry for your loss. How wonderful that the relative loved you so much to help you this way.

My advise would be to pay down the highest rate credit cards and keep any that are below 9% and then pay them off timely. If your liquidate all the money to your credit cards then you have no fallback.

You could invest the money and have it earn money for you but if you spend it to payoff debt that option is gone.

I have been faced with this same dilema and we chose to pay down certain cards, shift others to a lower rates, kept a portion in reserve as fallback and have invested the other portion of it in long term investments. We have spread it around in all of these areas and instead of putting it all in one basket.

This way we have it available in tiers. Immedidate help with lowering credit card debt and payments monthly, backup for those events we can't plan for, and then long term in a Roth IRA that will allow me to buy and sell homes and/or businesses with the money and the earned money goes into my IRA.

Good Morning S.,
First of all I am sorry to hear about your loss. And finances is a hard thing to wrap your head around after such a loss. If you dont understand how money works I suggest you read some of Dave Ramsey's books. Financial Peace University would be great for you or even Total Money Makeover. I can tell you what his 1st 7 baby steps are...in this order:
1)$1,000 cash for an emergency
2)Pay off all debt
3)Have 3-6 months of your income in savings
4)save 15% in Rosth IRA/Pre-Tax savings
5)Sart saving for college funds
6)Have a plan to pay off you home early
7)Build Wealth and Give
He explains all of these in his book (and why) and so much more.
You can also use a financial calculator to see how much to invest at what rate to help with savings/college funds. http://my.waiora.com/home.php?895341
Good luck and God bless,
K.

Pay for house. it is an investment. Do not pay for car. it is putting money done the tubes. put the money in savings like cd or just regular savings. trust fund for kids etc. Not for the car. use your job to pay for that.
my 2 cents

You husband sounds like a wise man. Listen to him. The economy is NOT going to bounce back, so secure what you already have, do not go into debt for more, stay as liquid as you can. I was reared by parents who made it through the 30's Depression. As long as you own your home, you can't lose it.

Hello S.,

Sorry for your loss. I would not rush to do anything right away. paying off debts would be good but also make sure you have at least 6-12 months of expenses in cash (or on a very liquid type of account. if you have multiple credit cards, I would pay the one with the highest balance. and have a good plan on paying off the rest and on not incurring anymore credit card debt. if you pay all your credit card debt now and find yourself in the same situation two years from now then the inheritance only bought you two years...I'm not trying to imply that you'll go off and do that... just trying to tell you to have a financial plan. Have you thought of giving a special offering at church as a form of Thanks to God? Good luck! ~Cammen~

I don't know all your story but I would definitely pay off all your debt. We follow Dave Ramsey's approach and I would suggest (if you don't already) build up a 'rainy day fund' of 6 months worth of expenses. Then with the left over start paying off all your debt.

My condolences for the loss.

Pay off the debt...

Check out http://www.daveramsey.com

Sorry for your loss!

I definetely agree with getting the "TOTAL MONEY MAKEOVER" by Dave Ramsey. It's an easy read - easy to follow. BEST of ALL - IT WORKS!!
My husband and I joined a group to work together on this book and it is amazing how it really works if you are willing to do the work. your husband have the right idea,good luck and may the God bless you.

I was in your unique position last October. We have a professional financial advisor, here is his number: Gary Strawn ###-###-####. FA's work FOR FREE. So no reason not to call and ask for a free personal assessment. We first called him close to four years ago and have great success with all his advice.

Anywho... When we recently got our sum, he suggested to yes, pay off any credit card or the like debt and certainly the cars. But he did not suggest for our age, 30-35, to pay off the house. It is rare that individuals can save very large sums of money to invest, so that is what we did. That was Oct, and we have already made $4000 with the lump sum in the account he suggested (we paid off $30,000 in debt first).

So, in a nutshell, that was his advice to us, but each family has different needs, I urge you to call, you can mention you heard of him from Brandi in Denton. Good luck!