Negotiate a Debt Settlement

I am about to get a lump some of money; should I invest it, purchase a home, or eliminate debt?

I am 26 years old, work full time, and am about to get a good bit of money and I'm at a crossroads of what I should do with it. Here are my options. 1. Save it for the downpayment on the purchase of my first home. 2. Use it to open up a Roth IRA. 3. Pay off my timeshare - bad "investment" :-( 4. Put the amount towards paying off my car. 5. Put the amount towards paying off my student loans. Order these in priority of what I should do next. Should I do something other than these options? Thanks in advance.

Public Comments

1. Invest it. It's better to have money work for you, than for you to work for money.
2. Pay off student loans Pay off car Pay off timeshare Save for house Open IRA I think you should get yourself out of debt while you have the opportunity to. Just my opinion though.
3. I would be cautious about new investments in this ecomony. If you already have investments, keep them for the long term, but do not make any short term investment moves. The first thing to do is to pay off any debts you have. That way you'll avoid racking up additional debt if your car or timeshare has a high interest rate. Pay off debts in order of the interest rates from highest to lowest. Then put any additional money in a high-interest savings account (ING and HSBC offer good online accounts) or a high-interest CD. Hope this helps.
4. Here are the steps you should take even if you are about to get a lot of money or not. 1. set aside $1,000 as a small emergency fund. Things do happen 2. pay off all of your debt and sell your timeshare for whatever you can get for it. (never buy timeshares they are very bad) 3. save 3-6 months of your monthly expenses as and emergency fund. You can add the $1,000 from step one to this. Have this in a money market account at your bank so you can get to it if a true emergency happens. This will keep you from putting it on a credit card. 4. at this step you will have no payments because everything is paid off and 3-6 months in the bank. save 15% of your income for retirement. open a roth IRA and put it in that. 5. at this point you should start saving a down payment for your house. Try to get a min of 10% down on it or better 20% so you don't have to pay PMI. When you look at buying a house only look at taking out a mortage that is a 15 year fixed rate that the payment is no more then 25% of your take home pay. Congrats on the money!!