Q: My father in law passed away recently and because of this, my husband and I are going to be inheriting around $150,000. We are in our early thirties and owe $10,000 in credit card debt. We have a house (although not paid off), own 1 car but need to buy another one, and have about $8,000 in our 401K. We also have a mutual fund for our child’s college worth about $2000. I am a stay at home Mom and do not plan to go back to work for a few years. We are going to meet with the financial advisor who was handling my father in law’s money, but I would like to hear what you think we should do with our inheritance.

A: I’m sorry for your father-in-law’s passing. But, he has given you and your husband a wonderful gift — the ability to provide for yourselves in your old age.

Take $10,000 and pay off your credit cards. Then, cut up your cards (or freeze them in water) until you have your spending under control. Take another $15,000 and buy a pre-owned car. (If you can spend less, great). Look for low-mileage, and don’t lease. Buy a car you can live with for the next 5 to 10 years.

Take another $10,000 and keep it in a 2-week revolving CD. This is your emergency money.

Take the rest of the cash (about $115,000) and invest it in an S&P 500 index fund. Vanguard has the cheapest index funds (and one that accounts for what little taxes an index fund generates), but TIAA-Cref is also good, as is Fidelity and Charles Schwab. You’re aiming for 10 % growth per year. If you get that, you’ll basically double your money every 7 years. In 35 years, if all goes according to plan, you should have around $1.8 million in the bank to fund your retirement. And if you need a little along the way, say to pay for your children’s education, it will be there for you.