<prompt> Human: My husband and I recently got about 20,000 in inheritance from a family member. I read the topic in the FAQ related to this situation, but it didnt seem quite detailed enough for me.Here is our basic situation:DEBT Car payment 250month, about 10,000 left in the loan. EXPENSES Basic living stuff: food, clothes, cleaning supplies, etc. Our dog: his food, toys, vet visits, etc.We dont pay rent, and we have no student loans or outstanding credit card debt we pay it off each month. We got a really bad interest rate like 7 freaking on our car loan because we had insufficient credit to get anything better. On top of the bad interest rate, its a secured loan, but we can refinance in September and have a normal auto loan. Here are some ideas I had for the new money: Have our emergency fund totally set up! I make a little over 2,000 a month, so wed need about 6,000 to have our 3 months of expenses. We could just have it right now! Pay off the car loan at least partially or in full. Should we pay off our entire car loan and be completely debt-free, or should we refinance and keep making payments for a while? We definitely need to build our credit more so we can get a good rate on a house when the time comes hopefully in about 2 years from now? Or should we just pay it off all the way and get a good credit card were thinking a Capitol One card with some travel rewards to build our credit more? Set up a small emergency fund for our dog in case he needs an expensive trip to the vet. Up til now weve just pulled from our savings for his stuff, but I would really like him to have his own money so we can for sure pay for something he needs. Start saving for a cool trip we can take when my husband graduates in about 1.5 years. Start saving for a new caran emergency repair on our current car. The idea here would be to save the money until we have to buy a new car, not to buy one as soon as we have money for it. Im thinking if we pay our loan off, we could just make a pretend payment to our savings, since were used to paying it anyway?And thats all the ideas I have. Should we consider investing some of it? Putting some in a CD of some kind? We have a good chunk put away for a house already, but we dont really have a formal savings plan for anything else, even our general savings. Were going to have a sit-down soon to talk about our finances, and I thought we could use your ideas. :EDIT: Thanks for all the great responses so far! This will definitely help us decide what to do with it.  <response>: Pay off the car loan completely, and save the rest as an emergency fundnew house fund. I dont believe in paying interest to build credit, and since you already have credit cards, your credit score will improve over time even without the car loan. 