[Marianne]

So I’m inheriting $5k soonish, I owe ~16k on my car ($400 mthly payment), ~1k to the irs ($75 mthly), ~2500 on the extended warranty ($175 mthly).

I know I’m ready to refinance, credit score went from 590 to 625 since the last refinance 6+ mths ago.

My goal is to have the most money monthly cause I’m now paying rent for the first time in two years, so my question is what should I do when I get that money? Pay off the irs and the warranty and then as much as possible the on the refi? Put it all down on the refinance? Pay off either the IRS or warranty and put the rest down on the refinance?

[Samantha]

Definitely get rid of the IRS and warranty payments first. After that I’d probably dump 1/2 of what’s left on the 16k and save the other 1/2 in case you run into hard times need it for a couple payments.

[Paula]

Don’t purchase an extended warranty again.

[Jill]

Pay off that IRS first!! They are not the ones you wanna owe money to!!

[Raquel]

I would pay off the irs and warranty completely (especially the irs), then put $1500 in an emergency fund.

[Catherine]

Before you pay anything off … think about whether this inheritance will make you owe taxes on it. (Depends on what the money is from regarding whether tax etc) and then pay off IRS.

[Judi]

IRS they charge you daily interest. It will take yrs to pay off.

[Emiley]

Agree with another comment. Pay off warranty and IRS and save the rest for a rainy day.

But ALSO you need to apply the savings you now have not paying those debts and apply it to your car loan

[Carol]

Yes, get rid of the little bills first, then dump rest on big bill, and now the extra money you have each month can go toward big bill. I’d even say, take a portion and put into savings.

[Lisa]

Can you cancel the extended warranty?
Do you have $1k set aside in your saviings account?
Pay IRS first. Then attack that car debt.

[Becky]

For sure pay off the IRS and get them off your back.

[Thashia]

In my experience, most extended warranties have so many loop holes and exclusions they end up useless. I would put that money in a savings account. The IRS is minimal interest. Pay them over time. Can you use the 5k to buy your own home?

First time buyer or FHA? Rents will only go up.

[Laura]

I would pay off the IRS and Warranty, then make extra payments on the car until paid off.

[Connie]

Pay the IRS… I would cancel the extended warranty and put the $2500 in a high yield savings and not touch it unless you need it for the vehicle repairs. That will leave you $1500 to put down on refinancing.

[Melissa]

What are you refinancing? Please don’t refinance your car loan. You will end upside down in no time. Do not get in the habit of taking a loan to pay a loan. You’d do better to sell it and pick up a beater with lower insurance to get you to and from work.

Are you going to be able to pay rent and new bills that come with it just with your monthly income?

Pay the IRS and and get a second gig.

If you can pay your monthly bills, put $2000. in an emergency fund….

I reread your post. You refinanced 6 months ago, still have debt and you want to refinance again!? STOP! you are going down a rabbit hole.

Sell the car! Get rid of 2 debts. Pay off IRS. Take $2000 and any extra money you get from selling the car and buy an older model used car that can get you to work and back, only. Sounds like you may need a second gig, to build up a strong emergency fund.

[Connie]

Pay the irs and warranty. That will increase your credit score. Use the $250 you save there to pay principal only added to your car pmt. You’ll have $1500 left as emergency funding. I wouldn’t refinance unless you shorten payment times and lower interest.

Pay off the car asap then go get a newer used car.

[Tamara]

I’d pay off irs and warranty, keep the rest as an emergency fund. Then start paying the $250 from the monthly payments (irs plus warranty) and increase your car payment to $650 a month. Pay the minimum monthly car payment and send the extra money remaining (of the $650) in as a separate payment – requesting your car loan applies it towards principal only.

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