How can I get out of debt?

Debts:

$16k car loan

$24k student loans

$160k mortgage ($1150 / month) valued at $175k now bought a year ago

$14k credit cards (0% interest on $4k for 15 months from balance transfer)

Income:

$52k salary

I have Savings of $165k from inheritance but I don’t want to spend inheritance on debt. I’m trying to grow it for retirement. 

Update:

Car loan is 2.5%

Student loans at 7%

Mortgage is 4.5%

18 Answers

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  • 1 month ago

    Hi!

    Bear in mind that I am 21 and I used to be sooo lost when wanting more information about how to make my money grow! Everywhere, all I could read was “you should invest when you are young, think long-term”. Well, I’d love to but I did not know where to start.

    So, I thought… before starting I need to know if I am even ready to start. Like are there some requirements? Am I in a good position to start? Is it a good idea? The same questions that you probably have.

    And then, I came across this checklist online (it’s free):

    https://theinvestorinheels.com/5-ways-to-know-you-... .

    So here is what I did:

    1.    I answered to that checklist.

    2.    I knew what I needed to work on to be in a good position to invest.

    3.    I eventually got into a comfortable position to invest safely.

    So, my advice would be to first determine if you are in a good position to invest. You should not start if you have credit card debts or if you don’t have an emergency fund.

    Happy investing journey! :)

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  • 1 month ago

    This is the dumbest question ever.

    Pay off the credit cards, student loans, and car payment. Continue to make your mortgage payment. The money you save from these payments each month will replenish your savings in no time. Saying that you're trying to grow a 165k savings account but don't want to spend it on 54k worth of debt is ridiculous. Get out of debt and then focus on savings. And for the love of God, don't go back into debt once it's paid off.

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  • 1 month ago

    I would pay off the 16K car loan and 24K student loans and use the 120K remaining for investments. I'm sure that the loans you pay off will at a higher interest rate than your inheritance will earn and you'll be much better off.

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  • Eva
    Lv 7
    1 month ago

    Whatever you invest in is not going to have the same interest rate as your debt. Pay off your high interest rate credit cards and possibly your student loans. Your mortgage payment is ridiculous at your income. Don't gamble with the balance of your inheritance trying to grow it too fast by investing in too-high risk items. Look at tax-free munis and/or EFTs. You should consult a good financial advisor.

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  • 1 month ago
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  • Anonymous
    1 month ago

    I think you are going to have to use your savings, or else if you don't use it then you will never get out of debt.

    What I suggest you do is pay off your car loan, credit cards debt, and student loan. The rest of your savings would be used, for your mortgage. For you to pay it off your mortgage quicker I suggest you find a tenant, or tenants, so you can pay it off faster your mortgage, and then you won't have anymore debts.

    You should have $111,000 left after paying off three of your debts, so if you were to use this money to pay off your mortgage then all that's left should be $54,000.

    You do realize you put yourself in debt, so I don't think you have a choice regarding you being able to save your $165k.

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  • 1 month ago

    Continue to pay your mortgage payments, as contracted.  Make the minimum payment on your car.  Pay off the higher interest loans ASAP, even if you have to bite into the inheritance. 

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  • 1 month ago

    just try to pay it off in installments

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  • hamel5
    Lv 7
    1 month ago

    That's a lot. But, the car aren mortgage are secured loans, hopefully at a low interest rate.. You should definitely pay off any interest bearing credit card - their rate is almost certainly more than you're earning on investments. ( provided that these savings aren't in a IRA) $14K in credit cards is way too much - stop using credit and use your ATM card instead. If this means fewer restaurant meals, new clothes etc - so be it. You will never even if you continue to run credit card balances.

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  • Pearl
    Lv 7
    1 month ago

    just pay it off

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