Does anyone know who Irwin Allen is? Well, neither did I until I found out he was my great uncle and there was a small inheritance coming my way. $50,000. It’s a great opportunity to make some headway. I’ve lived very frugally because my income has rarely been over $15,000/year, but I’ve never been able to put anything away. On top of the inheritance I just started a new job and I’m now earning $39,000 and living on that same $15,000. At 37 years old it’s time to start putting cash away.
Life Situation: Single, no dependents. Living in Marquette, Michigan.
Gross Salary: $39,000yr / $3,250mo
Taxes: $7,200yr / $600mo
Current Expenses:
Personal
Groceries $225
Restaurant/Bar $150
Gas $30
Auto Insurance $140
Car Payment $290
Health Insurance $175
Pets $75
Phone $68
Entertainment $25
Misc. $200 (I know this is high and could be broken down better)
Monthly Expenses $1,378
Assets:
Checking Account: $500
Savings: $3,500
Retirement $0
Investments $0
Liabilities:
Car Loan Payoff: $6,424
Rate: 3.9%
Term: 24 more months
House:
I list this separately because it’s held in an LLC with a friend with an 80/20 split. I won 80%. I haven’t included it in my income and expenses because I treat it as a separate entity. I could use help on this situation, but it’s not the main point of my question and to easy to get bogged into the details. I’ll post in the real estate forum on this one later. But here’s a relevant snapshot.
Market Value: $200k
Bank Loan: $112k
Personal loan for repairs: $46k (this is money that I've loaned to the LLC)
Rental Income: $2,900/mo
Mortgage: $1,416
All Other Expenses: $1,050
Expected Expenses:
Drive way and Parking: $12k (there’s currently 4 spaces for 9 bedrooms)
Windows: $6k
So, onto my question:
In this scenario, what’s the best use of $50k?
My thoughts are to pay off the car loan, put 10k into a accessible savings for rainy day fund then put the other $33k into longer term higher rate investments. In this case, considering that I have nothing invested right now, where do I start?
I could also put some money into the house (driveway and windows). These have to be done either way, I’m just not sure if it’s best to refinance the house to fund these improvements or use some of this money to do so.
As you can see, I'm getting a late start but am trying to find the right way. I really appreciate any advice or questions that you have.