I'm in the United States.
A family member just passed and it looks like I'll be coming into a little inheritance ($30,000 USD). I've got quite a bit of debt and am also looking at potentially buying a house in the next couple of years. I'm wondering, financially is it smarter to pay off all remaining debts and work from the ground up to build up a downpayment - or is it better for me to pay off part of my debt and get into a home faster? I see benefits to no longer paying rent to someone else, but instead into my own home. But disadvantages in that I would be retaining some residual debt.
Here's the breakdown of my debt:
Unsubsidized Student Loans ($8,200)
US $2800 @ 6.55%
US $2000 @ 6.55%
US $1900 @ 6.55%
US $1500 @ 6.55%
Subsidized Student Loans ($11,200)
US $2700 @ 4.25%
US $4200 @ 3.15%
US $4300 @ 3.15%
Auto Loan US $21,000 @ 5.99% ($355/mo)
My Income information:
Gross: US $4909/mo
Net Income after retirement, insurances etc.: US $2,996/month
Rent & Utilities: $700/mo
Partners income: Gross $36K/year
Partners Rent & Utilities: $700/mo
Partners Debt: $160/mo (total $10,000)
Homes in the town I work in average price are $463K, but the towns 10-20 minutes away are $317K - $299K. So we'll (my partner and I) probably be looking at a home right around $300K in the next few years.
And for those of you who say sell my car - I know it's expensive, but it keeps me safe and will for the next two decades AND I love it. It's one of the things that makes life worth living and I won't give it up.
So knowing all this, what is the most financially-sound decision to do with the 30K? Pay all debt off upfront and build a down payment or pay off the Auto loan & some of my Un-subsidized loans and get into a home faster? Thoughts and advice are appreciated!
Additional info: Neither of us has ever owned a home & my partner and I don't currently share funds. We split the cost of living but his money pays for his debt and mine pays for my education and my car. We've talked and are planning that once we find a home we love and any future purchases we make together, we'll combine finances to tackle them - but my student loans and my car is my responsibility and his 10K debt is his.
Also how much will I need to pay toward taxes on a $30K inheritance? anybody know?
Edit: I'm currently saving ~$500/month to build an emergency fund. I'm putting away $500/month into a separate account and each year I put that money toward my debt. So at the end of this year I'll have $6,000 to put on my Auto loan + the regular payments will bring the auto loan to ~$13K by the time I get the inheritance.