New here

[solarisblack]

Hiya! I'm new here, and I won't lie. I'm 25, and have made some seriously erroneous fiscal errors. I had an inheritance given to me of about $270,000 at the age of 19, and in the process of a domestic situation I was in the middle of, and was forcefully kicked out of my living conditions while still in college. Well, to say the least, since then I have managed to get my college degree (barely) and I have been living off of said inheritance since I was 19, and I have not had the best spending or saving habits. I have managed to land about $20k in consumer CC debt, and have over $61k in student loan at the moment. I also, to credit my own level of severe stupidity, have less than $50k left of my inheritance. My current focus at the moment is to find a job with my current degree in Business Administration: Economics ASAP.
Assuming I land a job of at least above $33k/year salary, and the fact that I live in an apartment currently, should I tackle my student debt loan first, or mix both my savings for retirement as well as my student loan debt? I have specific data on that, which I can post (that does not include any personal information). Also, would you recommend buying a house in my 20's or wait until my 30's if you were in my situation? Or buy a house at all? It seems I'm kind of headed on the career road, being that I'm single and have no ties to anyone or anything at the moment. It's easier for me to relocate than others, and I figured I should stay in apartments for a while to increase cash flow in my budget, but I'm not sure. I did want to say that a solution of curbing my CC debt is already under way, and will probably be fixed entirely by the end of next year. So, relatively speaking, no worries there. Any advice wouldn’t hurt though, in regards to the CC situation.
Thanks, in advance. Hope all is well with you.

[kork13]

To start with, I'm sorry that you've had a rough go at life so far. But you still have some of your inheritance, sooooo you're in a decent situation to get yourself back on track.

My advice:
1) Pay off your credit cards. Today. Right now. There's no reason whatsoever for you to continue paying interest on the cards if can afford to pay them off right now (you can). Then, do whatever you must to ensure that you don't go back into CC debt -- freeze the cards (literally freeze them into a block of ice), cut them up, cancel them, or just don't use them until you have your finances back under control.
2) Set aside $10k as your emergency fund, lock it away in a savings account that you won't tempted to tap into unless you're in dire straits. The remaining $20k is your living funds for now until you get a job. Treat them nicely, and go easy on the spending.
3) Your job right now is to find a job. Put in 8 solid hours every day toward finding yourself a job, and I guarantee you'll find a decent one, especially with the flexible, practical degree such as you have. Résumé development, searching job sites, attending job fairs, emailing résumés and contacting prospects, interviewing, and so on. That is your #1 job right now. Good luck!

Forget buying a house right now. You need a good, solid job first. Once you have a good job where you can invest for your eventual retirement, save up a down-payment, and keep your expenses in check, THEN you can look into buying a house. Until then, rent a simple place that meets your needs, and save everything you can.

[solarisblack]

Thank you

Thank you for the detailed and apt reply kork13. I really appreciate it. That is actually, EXACTLY, what my attorney did for me with the inheritance. Put $10k aside, and I'm making every effort currently to get a job ASAP with my degree being conferred to me late January (was not as detailed in the post about that situation). Not only that, but I had the same line of thinking, with several friends supporting me, and I just wanted to make sure we all had the right ideas in mind. Thank you again, SO MUCH! It means a lot to me that people like you are willing to reach out and respond.

Hope all is well in your life.

Best regards.

[solarisblack]

If anybody else wishes to give a different perspective, or add advice, please feel free. I'm open to all types of financial perspective on this particular scenario.

[bjl584]

Hiya! I'm new here, and I won't lie. I'm 25, and have made some seriously erroneous fiscal errors. I had an inheritance given to me of about $270,000 at the age of 19, and in the process of a domestic situation I was in the middle of, and was forcefully kicked out of my living conditions while still in college. Well, to say the least, since then I have managed to get my college degree (barely) and I have been living off of said inheritance since I was 19, and I have not had the best spending or saving habits. I have managed to land about $20k in consumer CC debt, and have over $61k in student loan at the moment. I also, to credit my own level of severe stupidity, have less than $50k left of my inheritance. My current focus at the moment is to find a job with my current degree in Business Administration: Economics ASAP.
Assuming I land a job of at least above $33k/year salary, and the fact that I live in an apartment currently, should I tackle my student debt loan first, or mix both my savings for retirement as well as my student loan debt? I have specific data on that, which I can post (that does not include any personal information). Also, would you recommend buying a house in my 20's or wait until my 30's if you were in my situation? Or buy a house at all? It seems I'm kind of headed on the career road, being that I'm single and have no ties to anyone or anything at the moment. It's easier for me to relocate than others, and I figured I should stay in apartments for a while to increase cash flow in my budget, but I'm not sure. I did want to say that a solution of curbing my CC debt is already under way, and will probably be fixed entirely by the end of next year. So, relatively speaking, no worries there. Any advice wouldn’t hurt though, in regards to the CC situation.
Thanks, in advance. Hope all is well with you.

Forget about a house for now. Stay in the apartment. As kork suggested, pay off your credit cards first. I'm curious as to what you mean when you say that you have a plan in place to curb your credit card debt by the end of next year. What does that mean exactly? I would think that you can curb your credit card debt immediately by simply cutting up all your cards and never using them again. At least, not until you can be responsible with them.

Do you currently have a job? This should also be a priority if you don't. Go get a job, any job. The goal is to become self sufficient and not live off your inheritance. You've been handed a very nice start to life. Don't spend it away frivolously. To put things in perspective, If I would have inherited that same $270,000 when I was your age and invested all of it and never added to it, I'd be sitting on about $1 million dollars today. The good news is, you are young and have time on your side.

I'd focus on stopping using the cards, pay them off, and finding employment. Good luck!

[solarisblack]

Thanks so much bjl584. You are correct in your assumption in that the solution I was suggested by my attorney, since my CC score has been damaged so much, was that by paying the minimum payments now every month, I have a chance of raising the score back up significantly over a shorter period of time. The way it was described to me, was that if I paid back all of the CC right now, that at most I'd see my CC score jump up is 50pts. He told me that by setting up a new acct (on his end, so I don't irresponsibly use my CCs again), and paying the minimum monthly payments on the closed accounts, and keeping up with the few active ones I still have left, that the score would see a larger increase than just 50pts in my CC score. If you have any objections or critiques, please share! I would like to know if you think this is a good idea.

[disneysteve]

Thanks so much bjl584. You are correct in your assumption in that the solution I was suggested by my attorney, since my CC score has been damaged so much, was that by paying the minimum payments now every month, I have a chance of raising the score back up significantly over a shorter period of time. The way it was described to me, was that if I paid back all of the CC right now, that at most I'd see my CC score jump up is 50pts. He told me that by setting up a new acct (on his end, so I don't irresponsibly use my CCs again), and paying the minimum monthly payments on the closed accounts, and keeping up with the few active ones I still have left, that the score would see a larger increase than just 50pts in my CC score. If you have any objections or critiques, please share! I would like to know if you think this is a good idea.

How can I put this delicately? Your attorney is an idiot! I'm guessing you don't have a choice since he is the trustee for the inheritance but you need to IMMEDIATELY stop taking financial advice from him. He clearly doesn't know what the heck he is talking about. You are paying hundreds of dollars in interest just to chase a higher credit score.

Pay back the cards right away, today if you have access to the funds needed. Don't make financial decisions based on your credit score. Do what's right and your credit score will heal over time.

[mo0n]

Thanks so much bjl584. You are correct in your assumption in that the solution I was suggested by my attorney, since my CC score has been damaged so much, was that by paying the minimum payments now every month, I have a chance of raising the score back up significantly over a shorter period of time. The way it was described to me, was that if I paid back all of the CC right now, that at most I'd see my CC score jump up is 50pts. He told me that by setting up a new acct (on his end, so I don't irresponsibly use my CCs again), and paying the minimum monthly payments on the closed accounts, and keeping up with the few active ones I still have left, that the score would see a larger increase than just 50pts in my CC score. If you have any objections or critiques, please share! I would like to know if you think this is a good idea.

You need to ask yourself: at this point in time, is your credit score more important than paying extra interest for the foreseeable future on $20k of credit card debt.

And I just realized that disneysteve posted right before I did, but yeah, your attorney is an idiot.

[MooseBucks]

How can I put this delicately? Your attorney is an idiot! I'm guessing you don't have a choice since he is the trustee for the inheritance but you need to IMMEDIATELY stop taking financial advice from him. He clearly doesn't know what the heck he is talking about. You are paying hundreds of dollars in interest just to chase a higher credit score.

Pay back the cards right away, today if you have access to the funds needed. Don't make financial decisions based on your credit score. Do what's right and your credit score will heal over time.

I couldn't agree more with DisneySteve - You need to pay off the CC's now. Paying minimum payments on your cards will have minimum impacts on your credit score. Check out Better Money Habits and myFico for how credit scores are calculated.

[bigdaddybus]

your getting good feedback here, the key to following this feedback correctly is paying off the CC debt and NOT GETTING MORE CC DEBT!!! (it sounds easy, but we all know sh#t happens)

welcome to the site, and I can tell you that I made TONS of financial blunders in my 20's and was in worse financial shape than you are now.

I suggest creating a budget and sticking to it. If you can do that now while you have a limited funds, and continue to follow it when you land a job, this will allow you to begin funding your retirement at a decent rate.

I agree with others, just forget about a house, getting a new car, etc. Focusing on getting your financial "house" in order is the best thing you can do for the long run right now.

[Fishindude77]

Good advice by kork13.

I will add ..... Get a job, any immediately, regardless if it is in your chosen field. This will slow the bleeding and tie up some of your time to prevent you from spending. At 25 years old you need to get used to working full time. You can still be sending out resumes, doing interviews and looking for a job suited to your education while employed doing something else.

Other than this, just keep your living expenses under control; cheap rent, prepare your own food vs eating out, cheap paid for automobile, etc. Your not the first young person to blow through a nice inheritance and won't be the last.

Forget any plans for buying a house until you are several years into a solid job that you intend to stay at and have a 20% down-payment available.

[LivingAlmostLarge]

Get a job, pay off the cards and start a budget.

[autoxer]

kork13 gave you solid advice for the first few steps!

disneysteve gave you solid advice in that you should NOT take financial advice from your attorney! You don't have to pay interest to get a good credit score... especially high interest rates. You can build a good score just by paying on time. Buy your groceries with the card and pay the full balance every month. Also you don't have to go and close any accounts either. Just shred the cards up, so you can't add to the debt and leave them as open accounts on your credit report to build longer history.

If you need help with your spending habits, start tracking it with Mint or something similar, so you know where it's going and it'll be easier to decide where you want the money going.

And keep renting an apartment. There is no right age to buy a house, you just do it when it is important to you AND you are financially ready.