How should I use my inheritance: pay off debt or invest?

S

Skydreamer101

New Member
This might seem like a straightforward decision, but I’d love to hear your thoughts!

I recently received an inheritance and will be getting more later. My plan is to use this gift to transform our financial situation. First, I want to eliminate our debt and.build up our savings so we can stop living paycheck to paycheck and avoid overdrafts. Whatever is left from the first inheritance, and the upcoming one, I’d like to put into savings. Eventually, I hope to use some of those savings for a significant down payment on a house.

I’m curious if this approach makes sense or if others have done something similar. Some might suggest investing it all, but honestly, I’m nervous about the risk of losing money. This feels like a once-in-a-lifetime opportunity to create a better future for us.

For context, our debt is quite high, and we’re paying $1,600 in interest alone—not even counting the principal. I believe paying it off would save us a ton of money and free up our monthly cash flow.
 
Here’s the thing: breaking the cycle of debt starts with changing the habits that got you there. If you don’t, you might find yourself stuck in the same sopt five years from now, minus the inheritance. It’s like running on a hamster wheel except the scenery never changes, and the bill keeps growing.

Let’s flip the script. Start small: identify what triggers your spending, and build a plan to outsmart it. Little steps today can mean big changes down the line. And remember, you’ve got this you’re already taking the first step by thinking about it.

So, grab a pen, and let’s get to work. Your future self (and your wallet) will thank you. ✍️
 
Pay off all your debts and experience the relief of being debt free. Understand how it feels to be burdened by debt and then enjoy the freedom that comes with it. Once you're debt free, build an emergency fund. Imagine your washer breaks, but instead of panic, you can just buy a new one. It’s inconvenient, but not a crisis. Finally, consider investing. Use a reliable platform like Vanguard for low cost options. Set up automatic transfers each month just like any other bill.
 
I couldn't agree more about changing spending habits! I've been using an Excel spreadsheet to track my expenses, and it's been a game changer. I started pulling out spendi ng money as cash each month 1/4 goes into my wallet each week, and the rest gets tucked away. Once it's gone, it's gone, and that's worked incredibly well for staying on track.

Once my Visa is paid off, I plan to put it away and only use it for automatic utilities and other essentials we'd pay off anyway. It's all about staying disciplined and focused on those financial goals! Stay on track!
 
I would definitely pay off all debt first.
I would put $10,000 in an emergency fund soon so you don't have to use credit cards for those life happens moments.
I would then put the rest in a high yield savings account.
 
Hey there! Paying off de bt and those pesky interest charges is honestly one of the best investments you can make.

Why not grab a coffee with a tax planner and see how you can invest while cutting your tax bill? Canadians, you’ve got some awesome tools like the FHSA, RSP, and TFSA use them to your advantage!

If you’re thinking about investing the rest, just make sure you’re keeping an eye on your spending to ensure you’re really living within your means.

And here’s the dream: you might even be able to work less or not at all and live off your investment income. A financial planner can help you figure out if that’s possible for you. Cheers!
 
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