What to do with inheritance: updated

Unless any of the assets were "not previously taxed" such as 401 K or IRAs or some portion of the assets were in a trust established prior to 1976 there would be no tax on this disbursement. There could have been some taxes paid in probate of the estate but the amount you get (with the above exceptions) would be tax free. There would be special rules for any none cash assets you receive such as real estate but that appears not to be the case.

That's a good use for your inheritance.

I've seen some people do some stupid shite with their parents hard-earned money. It's disgusting.

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Will be inheriting some $ soon, 40-50K from my pawpaw. I'd like to pay my student loans off but I don t want uncle same to rape me...

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Put the money in some type of fund like you don't even have it. Use it for down payment on house down the road or something that nature. Keep working on paying off your student loans.

+5

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interest is tax deductible and I wouldn't rush if I was him to spend the money he just got

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Only if you make less than 75k or so. Not sure what the OP does. I was only eligible the first year I started working.

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interest is tax deductible

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This is almost always a bad reason for doing anything but especially this. As noted, there's a relatively low phase-out. If you make enough money to be in a high tax bracket you can't claim it. And if you don't make enough money to be in a high tax bracket it won't do you much good. And, of course, mortgage interest (once he does get a mortgage) is also deductible.

"Save money" for a down payment on a house (assuming OP even has aspirations of dumping money into real estate in the first place) and earn, at best, maybe 1 percent, while paying 6.8 percent on student loans. 1 - 6.8 = -5.8. So in effect, you're paying a premium to save money for a down payment on a house, which will then afford you the ability to pile another 4 or 5 percent on top of your 6.8 percent. Or just pay it off, earn 0 percent and wipe out all future interest, then start saving. There's no reason to go backwards if someone gives you the ability to do so IMO, unless your horizon for house buying is so incredibly short that the time value of money is worth 5.8 percent to you (which you're certainly entitled to think, but its financially insane).

How much student debt do you have? Do you have any other savings/assets?

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"Save money" for a down payment on a house (assuming OP even has aspirations of dumping money into real estate in the first place) and earn, at best, maybe 1 percent, while paying 6.8 percent on student loans. 1 - 6.8 = -5.8. So in effect, you're paying a premium to save money for a down payment on a house, which will then afford you the ability to pile another 4 or 5 percent on top of your 6.8 percent. Or just pay it off, earn 0 percent and wipe out all future interest, then start saving. There's no reason to go backwards if someone gives you the ability to do so IMO, unless your horizon for house buying is so incredibly short that the time value of money is worth 5.8 percent to you (which you're certainly entitled to think, but its financially insane).

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This all assumes one has the financial restraint to not piss the money away if he goes off and pays his student debt off. It's not that easy to say that those new monies will be going in the right direction. He could go the hookers and blow route. Numbers don't always make cents. Boom, title of my new book.

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He could go the hookers and blow route.

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I can't believe it took that long for someone to mention H&B. I was waiting to see if it could get to the second page.

Your logic is flawed, because he could use the savings in the same way.