The $70,000 Question

Cindy Drimmel, who inherited a large sum of money, recently bought her first house, which she is renovating. The house is a duplex -- she rents out half and lives with her fiance in the other half. (By Jon M. Brouwer For The Washington Post)

We asked three financial planners to look at Cindy Drimmel's finances and offer ideas about what she should do with the rest of her $80,000 inheritance.

(Drimmel has already used $10,000 to pay off a car loan, buy new windows for her house and pay off one credit card.)

Her Situation

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Drimmel, 23, recently bought her first house, a duplex, for $128,000. She rents out half and lives with her fiance in the other half, which they are renovating. Rent covers half the payments on her two mortgages: The first, for 80 percent of the purchase price, is $103,000 with a 6 percent interest rate; the second, for the remaining 20 percent, is $25,000 with a 9 percent interest rate.

She and her fiance eventually want to rent out the entire house and buy another place. They plan to live in the duplex until renovations are done.

Drimmel, who tests software for a jukebox manufacturer, earns $33,000 a year and puts 4 percent in a company 401(k) retirement plan, which her employer matches. She says she lives from paycheck to paycheck, finding it hard to save because of credit-card bills, which total $6,000, and renovation costs.

Her fiance tends bar, earning from $1,000 to $1,500 a month, and spends most of his free time working on the house. He owes about $5,000 in student loans, which he pays off at $100 a month. They would like to have a small wedding in two years, and she says she is working with him to help improve his credit rating so that they will have better financial options after they marry.

What She'd Do With the Money

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· Pay off the $6,000 credit-card bills and the $25,000 mortgage.

· Pay off a $13,000 loan used to buy a second vehicle, a used SUV, which they use to haul renovation materials. She pays $300 a month on the debt. She also would consider refinancing it, using some of her inheritance as a down payment to lower monthly payments.

· Use $15,000 to $20,000 to buy a new roof and make other home repairs.

· Put what's left in a certificate of deposit and use the interest it earns in a year or two to pay for a wedding and inexpensive honeymoon, then use the principal and any remaining interest to renovate the bathrooms and kitchen in the duplex.

She considers the house an investment and estimates she eventually could sell it for $50,000 more than she paid for it. For now she thinks it makes more sense to rent it out. Rent from both units would cover both of her monthly mortgage payments plus bring in an extra $1,000 in income.