Receiving an inheritance can feel like discovering a hidden treasure chest in your backyard, especially when it’s around $50,000. The good news is that you have options, and the right choice can set you on a path to financial freedom. So, what should you do? Let’s break it down like a classic movie plot—every choice matters, and each one has its own twists and turns.

First up, let’s talk about that small debt you mentioned. If it’s nagging at you like an earworm from a catchy pop song, paying it off might bring you instant relief. Think of it as clearing out the clutter from your closet. Eliminating debt not only improves your credit score but also frees up cash flow for future opportunities. Plus, the peace of mind that comes from being debt-free is like finishing a complicated puzzle—you can finally see the whole picture.

Now, if your savings are modest, consider building a safety net before diving into investments. Picture your finances like a superhero team: your emergency fund is your shield, protecting you from unexpected expenses. Ideally, aim for three to six months of living expenses saved up. This way, if life throws you a curveball, you won’t need to dip into credit cards or loans. It’s like having your own Batcave ready for action!

Once you’ve tackled debt and bolstered your savings, it’s time to think about investing. Stocks, bonds, and mutual funds can be your trusty sidekicks in the quest for wealth. Investing is like planting a tree; it takes time to grow, but with patience, it can yield delicious fruit down the road. If you’re new to the investing game, consider starting with low-cost index funds or a robo-advisor that can guide you like a seasoned mentor. This way, you can dip your toes in without feeling like you’re jumping into a shark-infested pool.

However, you might be wondering about keeping some of that inheritance safe. There’s nothing wrong with stashing a portion in a high-yield savings account or a certificate of deposit (CD) for short-term security. It’s like having a cozy blanket on a cold night—comforting and reliable. Just make sure it works for you, ideally earning a bit more than the standard savings account.

Ultimately, the best approach is a mix that aligns with your financial goals and risk tolerance. Imagine yourself as the captain of your financial ship, navigating through calm and stormy seas alike. By balancing debt repayment, savings, and investments, you can create a sturdy vessel that can weather any financial storm.

So, take a deep breath, grab your financial compass, and chart a course that feels right for you. Whether you choose to pay off debt, build your savings, or invest in your future, remember that every little step counts in your journey toward financial empowerment. And who knows? This inheritance could be the start of something big, like the sequel to your own financial blockbuster.