Tl;Dr : Father gifted me $20K, we have $24k in debt, no savings and miscellaneous income. Bills are always paid on time even if just minimum payment, but there's no room for play or even tiny pleasures due to the bills. How do I proceed?
Posting from an Alt because of obvious reasons. My dad sold his house recently and tonight when we were visiting he says, "you've mentioned before that if you hit the lotto for $20k you'd be all set?" and placed exactly that amount on the table as a gift.
The past year has been rough as my clinical depression cost me 2 jobs, one of them the best paying job I've ever had, no unemployment because of the way I left. During this time we went through our emergency savings (about $10k), and added about $5k to our debt. I'm slowly getting back out into the world, with some days better than others. I really don't feel like suit and ties and offices yet, so I've been doing GrubHub and Amazon and am confident that I can produce a minimum income of $700 to $1000 pretax dollars a week. At the moment we are also receiving $550 a month from the advanced child tax credit.
We have roughly $24k in debt and applying the entire gift into it would allow us to start fresh and our income dedicated to just build our savings and move forward instead of trying to pay down bills, but I have a feeling this may not be the smartest, best move. I have zero experience in investing and have no idea if I should risk part of this money, or become debt free and invest later. Right now our "emergency fund" is under $1k, Should we set some of this new money aside as emergency fund and if so what percentage?
So to break it all down: In the black: $20k cash, $6k in 401k with Fidelity investments, $550 a month child tax credit, weekly Gig economy income of $700 to $1000 (Pretax).
Debt:
Credit card1: $4,000 at 24.74%
Credit card2: $9,000 at 17.9%
Car Loan: $4,600 at 4.99%
Personal loan: $4,300 at 11.5%
Miscellaneous: $2,000 at 0%
The above is about $1500 a month for us in our current situation, throwing a bit more than minimum payment at the highest interest card, besides our regular obligations like rent, cell phones, car insurance, etc...
Thanks for making it all the way down here, and for any guidance you may provide.
Submitted September 12, 2021 at 03:30AM by LevelMessage5248 https://ift.tt/3ty9ciD
