"I don't want to look back in 10 years and realize I've mismanaged this money.": I have $10k and no idea how to invest it. How can I set myself up for financial success?

Edit: Thanks for all the advice! I’ve got a pretty good sense of direction now.

Hey Money Minder,

So, I just came into 10k and I’m clueless about what to do with it. I don’t want to mess this up and regret it in the future. I’ve made mistakes with money before and I really want to do better this time.

Here’s my current financial situation:

401k: $35k
Savings: $500
Credit cards: $3,000
Student loan debt: 150k

I’ll be graduating in 9 months and my loans will be deferred for 6 months. I’m currently renting and own a car. My goal is to eventually use this money to buy a home.

Any advice would be greatly appreciated!

Retired and Happy,

Response from THE MONEY MINDER:

Hello There,

Congratulations on receiving 10k! It’s great that you’re seeking advice on how to manage this money wisely. Based on the financial details you provided, it seems like paying off your credit cards should be the priority. With a balance of $3,000 and potentially high-interest rates, clearing this debt will prevent you from accruing unnecessary interest expenses. Once the credit card debt is paid off, focus on building up your savings. Having a financial cushion is crucial for unforeseen expenses or emergencies.

Considering your outstanding student loan debt and upcoming expenses post-graduation, it’s essential to evaluate your financial goals realistically. While homeownership is a great aspiration, it may be more prudent to use the 10k towards reducing your overall debt burden or boosting your savings initially. Utilizing this money strategically will set you up for a stronger financial foundation in the long run.

Additionally, as you have a 401k and your loans will be deferred for six months post-graduation, take advantage of this time to reevaluate your budget and financial plan. Seek advice from a financial advisor who can provide guidance tailored to your specific circumstances and goals. Remember, financial well-being is a journey, and every step, no matter how small, counts towards a secure future.

Best of luck on your financial journey, and remember that THE MONEY MINDER is always here to help you navigate through your financial decisions.