I have $30,000 I recently inherited and am trying to figure out the smart thing to do with it - pay down mortgage, pay off a HELOC, save for education (2 kids who will be starting college in 1 and 3 years), invest in stocks.

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    What state and country are you in? Different states in the U.S. offer various college savings plans. Different jurisdictions have different tax laws.
    – Jasper
    Nov 15, 2015 at 16:21
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    Do you what colleges your children are interested in attending? Have you asked the colleges' financial aid offices how they calculate need-based financial aid? Some forms of savings are ignored when calculating financial aid.
    – Jasper
    Nov 15, 2015 at 16:24
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    What are your interest rates on the losns?
    – keshlam
    Nov 15, 2015 at 17:03
  • 3.75 on the heloc, 3.18 on the mortgage. Owe about 140000 on mortgage, will pay off in about 6 years, owe 30k on the heloc. Live in Maryland.
    – herman
    Nov 16, 2015 at 17:30

2 Answers 2


Just follow Dave Ramsey's steps. Save your baby emergency fund of $1000, pay off the HELOC, save 3 - 6 months emergency fund. After going in that order, invest 15% for retirement, save for college and put all the extra towards the mortgage.


You should be doing everything at once. You can save for retirement while still having debt. One thing I would look out for is the education. Take the airplane advice and put your own oxygen mask on before your kids. Paying for their education will mean nothing if they need to support you later on. This isn't a question so much of what to do with the money as it is how to apply it towards reaching your goals. If you don't have a retirement fund, first thing you should do is maximize your annual IRA contribution. I strongly recommend a Vanguard Target Date fund.

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