Coming into some money and NEED advise!
DH bought a business about a year ago. He is now in a position to sell it and make about $60k in equity. We also have about $20k coming back to us for taxes (the entire year was a wright off). Not only that we have about $20k in his business savings account that he was going to use as a conversion fund (he owns a partial franchise that requried him to save money to convert to a full franchise within two years). That money is ours because we will sell before we convert.
So... here is the deal. We aquired about $20k in credit card debt in the process of him quiting his old job and starting up the business. He has a new job offer that will double what he is paying himself now. We also have another $10 in credit card debt that we aquired before buying the business. We completely depleated our savings in buying the business (about $10k) and have not yet built that back up.
We have about $60k in student loans between the two of us.
We have two car payments with a pay off of about $40k.
We do not own our home but are under a lease/purchase agreement to buy the house after a two year period. We have been in our home for 6 months. We would like to buy it sooner while the market is still bad and interest rates are still low.
Our plan with the money is this...
1)pay off ALL credit cards (about $30k total)
2)pay off the smallest car loan (about $16k)
3)put some money into savings
4)make a down payment on the house once DH has been in his job for at least 6 months.
I am just confused as to how much we should put in savings, or if we should even pay off ALL of our credit cards. I also don't know if its a smart idea to pay off the car loan, and I wonder if we SHOULD pay off one of our student loans!
I just don't know how to go about deciding how to allocate these funds. I KNOW we want to put money into savings. I also know we will NEED at least 5% down on our house (about $10k)... we won't put down any more than the min. down payment because we know with DH's income (and even if he lost his job and had to work at mcdonalds) we can afford the payment after we get all of our credit cards paid off.
Please help me financial mommas. This is a wonderful opportunity for my family and I DON'T want to screw it up!