25 y.o. Getting $15,000 gift from grandmother’s estate. Help me be responsible with it

[citranuri]

As the title says - my grandmother is in poor health so my folks have taken over her estate and finances. She had a fair amount saved away so in order to make something with her taxes easier or cheaper or something (I’m not positive the exact reason) each of the grandkids is getting a $15,000 gift to put towards debt, savings, etc.

I live in a downstairs apartment with my gf, and the house is owned by her mom so rent is pretty cheap. My expenses are pretty minimal - health insurance, groceries, pet supplies, student loans, car insurance, and incidental stuff. I currently only make about $1100 a month and only have a thousand in savings.

I have two student loans - one is about $6000 at 4% interest and one is about $3500 at 4.4% interest.

Should I pay off both loans and save the rest? Should I pay off the bigger one, put the rest in savings and pay off the smaller loan faster without the added expense of the bigger one?

Is there another option I’m missing?

Thanks for the advice!

 

[resjudicata]

@citranuri Pay off the loans: That leaves you with $5,500. Put 3,300 into savings to beef up your emergency fund (That gives you 3-4 months expenses saved up). Put $1000 into investments (I'd recommend something like VTI, VOO or if you have investments through work, add it to those)

Take the remaining $1200- and go on a weekend getaway with your girl and if you have anything left over put it towards your investments. Then take your student loan payment of $x and send that to your investments monthly- so now you've taken your unexpected wealth and done something responsible to make life better for both current you and future you, and taken some of the money and had a little fun too. Grandma would be very happy with all of that.

 

[petersmith]

@citranuri pay the loans off. easy.

 

[redhead11]

@citranuri Pay off the loans and then, if you're fine living where you are for now, invest the rest in a Roth IRA for retirement. If you really don't like living in your gf's mom's house, then maybe use the money to start renting an apartment or save it in a high interest rate online savings account for a down payment on a house.

 

[iona27]

@citranuri Pay the loans off and invest the rest in VOO ETF. Maybe spend some of it on a vacation.

 

[godrealms]

@citranuri Save/snowball on your debt