Need Help please. Lots of debt but coming in to some money!

Hi,
This site is really fantastic and I am hoping some of you can help me and steer me in the right direction. I have put alot of debt on myself over the last 7 years I have broken down as much as possible below:

I work as a self employed mobile beautician

Incomings:
Income approx: 1500 = 1700

Outgoings:

Monthly car repayments: 354.00 ( 3 years finance left-current settlement figure is 11900)

Monthly Personal Loan BLUECUBE : 220.00 ( 6 years left, current settlement figre is 11400

Credit Card No 1 MBNA : 120.00 Eur monthly just paying off interest currently standing at 8000.00

Credit Card No 2 AIB: 60.00 Eur monthly just paying off interest currently standing at 1500

I also have a 3rd Credit Card that I very rarey use with a limit of 600.00 Eur. But I dont have anything on that at the moment.
Credit union Loan: 40.00 Eur weekly. Approx 950 left on it

Sky Payment: 27 Eur Monthly
Internet Payment: 30.00 Monthly
Phone Bill: 50.00 Eur

Savings:

45 Eur per week to Bank ( approx 2k)
30.00 Eur per week to Credit Union ( approx 2k )

I live at home but contribute 180.00 Eur per month.

I dip in and out of my savings all the time which also helps get me through the months and have a very generous bf.

However I am inheriting money this coming summer approx 60k and want to do the very best I can with it. Also would like to invest a small amount. Can anyone help me.

Thanks

D4B

First issue to tackle is the credit cards. Most likely you are paying 15% interest on the repayments for such, which you would never gain on savings interest. You need to prioritise your debts according to how much interest you are paying on each. Starting with the highest interest rate debt you need to clear each, in so far as possible.

From the investment, I would suggest clearing all debts for approx €30k and assuming you have a conservative approach to risk, invest the remainder in a deposit account. You can enquire as to what best interest rate you will earn from this - http://www.askaboutmoney.com/showthread.php?t=102329

Pay off the credit cards with savings. You are not really saving , just investing debt at a really bad rate.

Key thing here is use the inheritance to get debt free. Than tear up one of yoru credit cards and keep the cheaper one.

You have nothing to worry about with €60k coming in, so that's the good news! but you have run up some serious debt so you need to change your attitude to this in the future.

Thanks a mill for your help. I am only 26 and have been fairly silly with money when I was in college etc. So am a bit unsure how best it would be for me to invest. I am against goin to to the bank to speak to a financial advisor as I fear they would put pressure on me and as I wouldbt really know any better I could do something I would regret.

You have nothing to worry about with €60k coming in, so that's the good news! but you have run up some serious debt so you need to change your attitude to this in the future.

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I'd agree - you are getting a "get of jail card free"....but this is a once off & you really can't depend on this sort of windfall in future. You are very luck that the inheritance will cover you debt, but if you don't change your attitude to money (& the generosity of your bf and family), you will end up in a worse situation in 12/24 months time.

I hope most of your expenditure was for setting up your business, if so, this will give you a good head-start. Make sure you optimise this golden opportunity!!

fairly silly with money when I was in college etc.

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Weren't we all!

You'll get sound advice from this forum, but it's worth speaking to an accountant or an independant qualified financial advisor.

J

When you have your debts cleared try and never take out a loan again. I found myself living at home that it gave me a false sense of expendible income for a long time. Personally I'd never take out a loan now (mortgage excluded), even tho that means going without lots of things at the moment. Good luck with your budgeting, you're on the right site!

Yes an awful lot of the money was setting up my business and buying products etc ( and maybe a small obsession with bags and shoes ). I am very lucky that this has come about - trust me I wont be making the same mistakes again.

The only think thats keeping me from taking my savings out now and clearing the debts is in case an emergency happens. I guess knowing that I have the money coming in is kind of making me be a bit too relaxed about it all.

Your all so helpful - I really appreciate it.
xx