My fiance as well as you have the sum of 00 in debt (00 upon the credit label as well as 00 in tyro loans). His grandparents’ friends have been saving up income for him given he was immature as well as they’re giving him scarcely 00 in the couple of weeks.
Now, we’re perplexing to confirm what to do with the money. you would similar to to make make make use of of of half upon the debt as well as make make make use of of of the alternative half to buy the newer automobile since the automobile you have right away is descending detached (it’s the 92 Chevy Corisca). The delivery is starting bad as well as you KNOW which it will price the lot to fix. you consider shopping the newer automobile would be correct in the situation. Also, you will be reception 00 in Oct which you can make make make use of of of to finish profitable off the debt so in the end, we’ll do what he wants anyways.
He thinks which you should only compensate off all the debt as well as outlay the rest upon automobile repairs. you do not consider this is correct since in the couple of months, the automobile competence poop out upon us as well as we’ll be stranded with no automobile as well as end up with some-more debt by possibly carrying to repair it or buy the brand new car.
What should you do?
I would pay off the credit card debt and start saving now for another car.
Your primary goal should be to start saving money now in case your car suddenly needs repair or replacement. The credit card debt is preventing you from saving, so you should pay that off immediately. If the student loan payments are high, you should pay that off too. Put as much money into savings as you can in order to build it up as quickly as possible.
It is important to avoid keeping a balance on your credit card. That is how people get into trouble with debt — they build up a balance that they can no longer pay off. You are lucky you are getting that money, otherwise you could probably be one of those people.
The first thing I would do would be to put $1,000.00 aside in an emergency fund. That way if the car does poop out you are prepared. I would use the other $4,000.00 to pay off your existing debt. As soon as that is paid off, take whatever amount you were paying on the debt and put it into savings for a newer car. Keep saving until you have enough to pay cash for a good reliable used car. You already know that you will be getting another $1,500 in a few months and you can add that to the new "pre-owned" car fund.