if someone were to give you $10,000 how would you use it?

[meg-momto2]

DP Grandma is planning on sending us $10,000-12,000 in the next 2 weeks. both DP and i are in complete shock and extremely grateful for her generosity. we're trying to figure out what to do with the money. she has requested that we use it towards something big like a larger car, which we could really use. i want to attack our nearly $11,000 of credit card debt and stash some in savings. DP just wants to be able to visit his Grandma in FL and our family in AZ by the end of the year. i'm torn about the car issue. we really could use a larger car but i'm having a hard time justifying not paying off as much debt as possible. if you were in my shoes, what would you do?

[wannabe]

The debt.

Or if you desperately need a new car, research what the difference would be between payng cash or borrowing the money - which debt would be cheaper, the old debt or the new car debt.

[Paxjourney]

$3000 to payoff the remainder of our car loan.
$1500 to payoff CC debt
$2000 to landscape and finish alot of little projects that need to be done on our home

The rest would go into our IRA and into a 6mo CD

[queenbean]

I'd definitely use at least some of it for the debt, especially if it's on credit cards. Those interest rates will kill you. If you can get by with the car you have now (which I'm assuming you can, if you've been using it so far), I'd knock off some of that debt so you can have more money each month to put toward the rest of your debt and maybe even put some away toward getting a bigger car in a couple of years.

[minimunklemama]

I think it would be silly not to use it to get out of debt,all that money you are paying in interest.you could then budget a savings per month toward a bigger car.just tell Grandma that you are taking your time i choosing a car if you think she won't be too happy.
At the end of the day she is giving you a gift,you should be able to decide what to spend it on.

[Alkenny]

I agree that I'd knock out that credit card debt! The money going out every month on payments towards that could be saved back for a down payment on a newer car later on.

[Igraine]

What a generous lady!

Debt first.

I would put a chunk on the principle of my mortgage and pay off at least one student loan.

Good luck.

[scrapadoozer]

I'd definitely attack the debt!

Hmm, what would I do with 10K...
Pay off DH's student loan ($1500)
Pay off the car ($4500)
Get both the crowns I need ($2500)
Put the rest in savings.

[BetsyS]

$10,000 would almost pay off our smallest and highest interest school loan. I'd love to get rid of that sucker!

I say go for getting out of CC debt. It's a great feeling to no longer owe them. THen, you can save what you are using for payments to them towards a new-er car.

[EmsMom]

Gee, that is fantastic. Personally, I would repay the debt at least in part and create or pad an emergency fund if that was inadequate. With most credit card rates being now at least 15%, you could do much better and probably have much lower monthly costs with a car loan on a reasonable used car. (Even better if you hold off on the car for a few months while you save your current credit card payment amount towards the down payment on the car). I would definitely ask "permission" of the giver, though. Just explain that you have this credit card debt that is making you so very uneasy and would it be okay if you used the money that way? Of course if you immediately buy a car then it wouldn't need to be "explained".

Let's see: if it was me I would just pop the whole in a high paying money market fund because my next financial goal is savings 6 months emergency fund.... But I might pay out some to invest in a thermal heat pump installation which would save enormously on our future heating bills.... But we paid off our debt awhile ago.

[rachelmarie]

I would pay off the debt and put the rest in savings. Can you wait on getting a bigger car? Can you save the money you normally pay toward credit card debt and then buy a car with the cash (whenever you save up enough)?

How wonderful and generous of your DP's grandma!

[CarrieMF]

First I"d call the CC companies & have them lower my interest rates.

I would take half of it & put it on the cc's, then lower the limit so you can't max them out again. If the cc debt is over more than 1 card then cut up the cards of the ones you pay off, do not lower the limit & do not use it again(if you're like me & have the number memorized so cutting the cards up doesn't do anything). Having credit available is good, just don't use it. Then if it is over a couple different cards, take the amount you were paying on those cards & add it onto the ones that are left to decrease it faster.

With the other half I'd put some away for the trip to see family that dh wants to do & put the rest into a high interest savings account while you research getting a vehicle. It may not pay for the entire amount but anything helps.

If you will be forking over some $ for a vehicle each month, for now add that payment to the cc's until you buy a vehicle.

For every $1000 you lower on the cc call them up & lower the limit until it's down to $4000-$5000. If it's over more than 1 card, then just keep the ones you won't be using open with the limit they have now & the ones you're still paying off lower the limit until it's at $1000.

[caricandothis]

If someone were to give us that amt of money, I would totally pay off our debts first.

My dh would want to use it for vacations and other things but I would put my foot down and *make* him pay off our cc debts. We are drowning in cc debts right now and I couldn't even begin to enjoy a vacation if we didn't pay those off first.

[MommaCrystal]

If I were you I'd put it ALL toward debt. You'll save SO MUCH on interest you'll no longer be paying. Plus you'll keep more of you monthly income since it won't be going out in debt payments. I'd then save that extra money for a while and buy the vehicle I need, for cash.

In my case, since we just paid off the last of our debt and our cars are good enough for now, I'd put it all into a money market account for emergencies.

[Benji'sMom]

If I had cc debt I'd use it for that. Taking trips and buying cars is the sort of thing you need to *stop* doing, if you want to fix financial problems.

[mama_b]

I would pay off our credit cards and use the rest of it to move across the country.

[jlazx2]

I used to work in taxes, and there is a "gift tax" after $3,000 per yr ( maybe more now, not sure). That is per person. So you may want to have her give $3 to you, 3 to your husband, 3 to your kid, etc. Better to be safe than sorry and having the government take your #$.

[Valkyrie9]

If I were in your shoes, I'd budget a small amount of it ($1000 or so) to a trip to see DH's family. I don't think I could look at a big chunk of money like that and not do something fun with a portion of it. Then I'd feel rewarded, and would put all the rest of it against the credit card debt. You definitely should get rid of that! And I agree with all the PPs who have said to take that money you will be saving monthly on CC payments and put it into an interest bearing savings account (I love my ING one!) and save it toward a bigger car.

In my own circumstance, I'd pay off my car, put a big chunk of $ toward DH's truck payments (maybe $5k or so). That would leave us $5k-ish, so I'd put about half of that into savings and then blow the rest on redoing our back yard.

[dealic]

If I were you, I'd pay down my CC debt, then if I needed a car, I'd finance it because the interest would be less.

If I were me, I'd use it towards a downpayment on a house, but I'd still save up this year to add to it as much as I could on my own. But we don't carry CC debt, are almost done paying off student debt, and then will be debt free except for the car we just bought which we easily afford the payments on, and we are saving for a downpayment right now.

[Metta&Karuna]

Originally Posted by jlazx2

I used to work in taxes, and there is a "gift tax" after $3,000 per yr ( maybe more now, not sure). That is per person. So you may want to have her give $3 to you, 3 to your husband, 3 to your kid, etc. Better to be safe than sorry and having the government take your #$.

Check this. I know nothing about it but I thought it was 12 K.

If it is 3 K, could the grandma pay the credit card companies directly and avoid the gift tax?