I have inherited a little cash $35K (aftertax), and I am trying to decide what would be the bext use of it. Here are my options:
1). Pay off 1 of 2 mortgages (I got an 80/10/10 when I bought my house last year). This will save me money long-term, but on a monthly basis will amount only to $125.
2). Pay off the car loans. This will have the best short-term effect, and will account for over $500 of the monthly budget, and also help tremendously when my current car fails me and I am ready for my next car purchase.
3). Invest the cash into house remodeling (kitchen and bathroom updates), which may or may not payoff later.
2007-05-21 09:20:06 · 4 answers · asked by BudgetFrick 2 in Business & Finance ➔ Personal Finance
List your debts, lowest balance to highest balance. Pay off smallest first, keep rolling up until you exhaust the $35K. Swear off of debt. Use cash. It's quite liberating. Think how much money you would have, each month, if you had no debt.
See www.daveramsey.com
2007-05-21 09:26:18 · answer #1 · answered by Anonymous · 1⤊ 0⤋
If you have no credit card debt, I'd pay off the car loans. Eliminating debt is the least risky way to increase your net worth. And it frees you up to get more debt when you actually want and/or need it.
And as you said, it'll not only save you money in interest over the long term, it'll also give you an extra $500/mo in your pocket to save or invest as you choose. To me that's a no-brainer.
2007-05-21 11:30:38 · answer #2 · answered by lizzgeorge 4 · 0⤊ 0⤋
The car loans probably have a lot higher interest rate than the mortgages, so I'd think that would be the place to start.
Put some of the money into savings (maybe a CD?) unless you already have a good savings amount.
2007-05-21 09:32:30 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
I would invest (look into life insurance that would let you do this) and enjoy getting out of debt..like Steve P said
2007-05-21 09:28:49 · answer #4 · answered by Patches6 5 · 0⤊ 1⤋