Unlocking the Potential: Using an AI Legalese Decoder to Navigate Selling Your Mom’s House and Maximizing a $50k Windfall
- April 12, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Financial Situation After Inheriting Money from Mom
My mom passed away last year, and we are in the process of finalizing the sale of her house. As a result, I am set to inherit approximately $50k from the sale. With no significant savings and $25k in credit card debt between my wife and me, in addition to two car payments totaling around $1k per month, our financial situation is tight. Our monthly mortgage payment is $1700, along with the usual utility expenses.
## AI Legalese Decoder Can Provide Guidance
In this challenging financial situation, the AI Legalese Decoder can help analyze your legal documents, contracts, and other legal texts to provide clear and straightforward explanations. By utilizing this tool, you can better understand complex legal terms and ensure you make informed decisions, especially when dealing with the sale of assets or inheritance issues.
## Proposed Strategies with $50k Windfall
Considering the $50k windfall, one strategy is to prioritize paying off most of the credit card debt and potentially refinancing one of the car loans. This approach could provide immediate relief and reduce monthly financial stress. However, it is essential to weigh all options carefully.
Moreover, with fluctuating income post-pandemic, it is crucial to create a sustainable financial plan that aligns with your current situation. Collaborating with a financial advisor or utilizing online resources can further optimize your financial decisions.
Ultimately, by strategically allocating the $50k windfall and seeking professional advice, you can work towards a more stable and less stressful financial future.
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AI Legalese Decoder: Simplifying Legal Jargon
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****** just grabbed a
you need to be honest with yourselves and figure out why with a combined income of $160-185k you have $25k in credit card debt.
You seem to be living way above your means and will be back to that level of a debt in a few years unless you fix the problem
The fact that you said “how should we spend” should be a wake up call. It should be used to pay off debt and then invested IMp
Where is all the money going? If you’re grossing ~14k/month, and your car + mortgage take 2.7, where is the 11.3 going that you have no savings and cc debt? (obviously some to taxes)
Paying off the CC debt and paying down/off one on the vehicle loans is the best possible use of such a windfall.
I’ll add closing the credit card after you pay it off would be wise, racking up 25k makes it clear you can’t handle credit cards.
Just an observation: Your post title contains an important clue. How to best SPEND a windfall indicates a mentality that doesn’t embrace saving or investing for the future. That is further indicated by your income and your current financial condition. You and your spouse should strongly consider how you look at money and your finances, and reposition your thinking. Otherwise, you’ll be in the same boat within a year and without the $50K to bail you out.
It’s crazy that you can have a household income of $180k, pay $1700 mortgage, and still have that much cc debt.
But yeah, pay off as much as you can
Assuming the CC debt is high interest, pay it off. Set some aside for an emergency fund. 3-6 months of total expenses. Get on a written budget that includes knocking out your auto loans. You will have extra each month with the CC debts gone. Stop using CC cards. I am not sure what your overall finances have looked like for the long-term, but with a household income of $160K to $185K per year it seems like you should be in a much better financial situation at your age, and with a relatively low mortgage for your income. Read the Prime Directive Wiki.
52 years old. 0 savings. $25k in debt while you’re making a combined $180k a year? Take that $50k and pay off your debt and start saving.
I’ll give you some tactics and some strategy.
First things first set aside minimum 3 months of expenses as an emergency fund. So when the transmission blows and hot water heater breaks in the same week you are covered. Use whatever is left over to pay off credit card debt. Credit cards usually charge 20% interest. A solid year in the stock market is about 10%. You are getting charged double that.
Some strategy, you need a detailed, written, budget. You need to ask yourselves how y’all are making 160k a year and are 25k in credit card debt with a very reasonable mortgage. I personally like YNAB for a budgeting software but do your own research and find what works best for you.
Just throw the money away…you seem to have a knack for that.
But seriously, pay down the high interest debt and talk to a financial advisor or someone that can help you learn to be responsible with money and to love (live and laugh too) within your means.
So you make 160k-200k and have a liquid net worth of -$25k
I am so sorry to hear about your mom.
Please use this inflow to get on a good path with your $$$ – you are not in good shape at 52, and need to figure out why you are living beyond your means – otherwise, you will be in rough shape moving forward and into retirement.
I highly recommend YNAB (You Need A Budget) app for someone like you (has enough income to cover expenses, but doesn’t know where there money is going and/or carrying cc debt) – spend the time to learn the system, and it will be the best gift for your future. https://www.reddit.com/r/ynab/s/XP9HeseTmQ – the company offers classes and tons of support and the Reddit sub is generally friendly and helpful. The software/method has a learning curve, but it’s worth it!
And, even with carrying the debt you are, this might be the one windfall of your later life – it might be wise to park it in a HYSA for a while while you assess your financial situation so that you can use it effectively. Often times the recommendation is to wait a year before doing action with a windfall, especially if it is because of a death.
Pay off cc debt. Put the rest in a high yield savings and roth IRA (7k this year). Set a budget and Learn to live in your means!
Pay off the credit card debt in full.
What’s the interest on the car loans? If it’s high, pay those off.
Spend it? Pay your cc debt, put the rest on the sp500 and dont touch it
Paying off 50k worth of debt would set you up to have a nice summer.
The premise of your post is wrong. You’re asking how to spend it when you should be asking how to save it. Cut your lifestyle costs and put away some money. You’re broke and living outside your means.
Pay off the cards, put $25k in an HYSA, and stop using your cards so heavily.
The first thought should ideally be not to spend it… Clear out the cc debt ASAP and hopefully you can look into putting the rest into savings.
Definitely pay off the credit card debt. Don’t forget about taxes. The $50K will count as income for you for this year, so if you make $50K-$75K then this year your income will be $100K-$125K. So save ~20% for taxes.
So if you pay down $25K in credit card debt and save $10K for taxes, you’ve got $15K left. I would spend $5K on a trip or something fun and save the last $10K to start an emergency fund. Then start investing some of your savings from the credit card payments.
I hope when you say you have no savings you don’t mean that you have no investments for retirement.
Edit: the tax comment seems to be wrong.
OP you are not in a good situation at all. Best read up on all the personal finance resources here
Make sure you sold it above board, giving any creditors notice and going through any required probate process in your state. If you mess it up it can cost more to straighten out later.
Assuming the money is legally yours, I would pay of the cards, put the rest in an emergency fund, and figure out a way to pay off those cars faster by managing your money with a basic budget. **Getting to the point of spending your money deliberately is more important than this money.** If you’re not really on top of where you’re going to spend your money, the $50k will make you less stressed every month only for a few months; then you’ll be right back here. I would even consider temporarily putting the money in a short-term CD for a few months or something silly like that just so you can focus on fixing the underlying problem of not having a solid plan (budget) for where your money is going to before you earn.
Maybe keep the house and sell the mortgaged house instead? That clears quite a bit of cash flow and maybe you’ll have some profit to help take out the credit cards as well?
Recently went through the same thing, but I didn’t live in the house but was on the deed, no will and since we didn’t live in it for 2 years we had to pay some taxes on that so hang on to a chuck in case that comes up.
Get a good [financial plan](https://youtu.be/TPLG9jOhduo?si=_qIk3ClTw37DQZ4K) – you should already have retirement savings… I’m scared for you if you don’t
Pay off the credit cards, put the rest in a HYSA or investment account. Put the money that would have gone to credit cards in savings and don’t carry a credit card balance going forward
Go Google, calleb finance, on YouTube. Those people are you! Pay off your debt and learn to budget.
Good lord. What are you spending your money on with a manageable mortgage, stupid car payments and high income? No matter what, pay off that card. This is a gift and wake up call to stop going into debt
Credit card debt, car payments, then mortgage.
Pay off all the debt. Use whatever is left over to make a separate account to pay for the payments which you won’t have to worry about for a bit. Then whatever’s left out in HYS.
Invest it, don’t spend it. Take some time and read the wikis on this sub and ask questions based off what you read and your personal situation. But you’d be a fool to not put that amount of money to work for you.
Follow this: https://www.reddit.com/r/personalfinance/w/commontopics
$160k a year income and no savings?
1. Start with a budget. You can afford to pay for Quicken or YNAB. Track every dollar. EVERY dollar.
2. Dave Ramsey needs to become your new best friend.
3. What to do with the $50k? Nothing. Put it in a HYSA in a local credit union and do not spend it. You just got your new emergency fund. Do not touch it unless someone gets hospitalized or other major trauma. Otherwise, it will be gone and you will wonder where it went.
Pay off the cc. Put some in savings for emergency fund. 3-6 months expenses but make sure it’s a high yield savings account. If you don’t have anything set for retirement yet maybe open an Ira. I think the max for 2024 is 7k.
firstly, pay off the 25k cc debt. you’ll still have 25k left. that’s a pretty good amount considering you didn’t have that extra cash previously, AND you’ll have it with no lingering cc debt.
next, depending on how much you owe on the cars total, i would divide the remaining 25k between an account for you to have a few months (as many as possible) of car payments saved so you don’t need to worry about that, (or pay one off if possible.) and a few months (as many as possible) worth of mortgage expenses so you don’t have to worry about that either. then use your regular income to cover small bills and start saving up some cash while you have the load off your chest of cc debt, car payments, and mortgage payments.
Pay off credit cards and vehicles and start back at zero
I’m in a similar situation as you except my mortgage is almost 4x higher, what the hell are you spending money on?
Pay off all the cc debt. No brainer.
Oof. Pay off your debt and make yourself a budget.