“Hi Money Minder,”
Hey Money Minder,
So, I’ve got this sweet inheritance coming my way at the end of July – about $11k from my grandfather’s will. I’m stoked but also kinda unsure about the best way to use it.
Here’s the lowdown: I’m pulling in $90k per year in good ol’ Canada. I co-own a condo and a motorcycle with my partner, and my work covers all the costs for my truck (bless). But, I’ve got some debts to tackle – $1.3k in credit card debt at 23.5%, a $7k student loan at 7.2%, and a $10k motorcycle loan at 12.2%.
To keep things interesting, I’ve got an investment account with my friend’s company that’s been bringing in a solid 17% growth annually. Stoked about that!
My savings game is a bit lacking in liquidity – most of it is tied up in RRSPs, DCPPs, and stocks of the company I work for. Plus, I’ve got $2k in dues for my condo board coming up in July and November.
So, what’s the smartest move with this $11k windfall? Hit me with your best advice.
Cheers,
Response from THE MONEY MINDER:
Thank you for reaching out. How can I assist you today?
Hello There,
Hi PF,
Firstly, congratulations on receiving your inheritance from your grandfather. It’s always bittersweet to receive such a gift, and I hope it brings you a sense of comfort during this time.
Given your financial situation, it’s clear that you have a few debts that you should prioritize paying off. With the $11k inheritance, I would recommend focusing on paying off your credit card debt first. The interest rate on this debt is quite high, and eliminating it will save you money in the long run. Put a significant portion of the inheritance towards this debt to reduce it as much as possible.
Next, consider putting some of the inheritance towards your student loan and motorcycle loan. While the interest rates on these debts are lower than your credit card debt, it’s still important to work towards paying them off to free up more of your income.
Additionally, given that you have upcoming condo board payments and no liquid savings, it might be a good idea to set aside some of the inheritance for emergencies or unexpected expenses. Having a safety net can provide you with peace of mind and financial security.
Lastly, consider speaking with a financial advisor to assess your overall financial situation and determine the best course of action for your inheritance. They can provide you with personalized advice based on your specific circumstances and help you make the most of your inheritance in the long term.
Best of luck with your financial journey, and remember that good financial health is a marathon, not a sprint.
Farewell,
THE MONEY MINDER
