I have just inherited some money, would like advice on what i should do. Please read details!!!!?

I have just inherited roughly 90,000 dollars. Right now i have terrible credit(thanxs to ex husband), so i figure i should pay off all outstanding debt first. I should be left with approx. $50,000. What is the smartest thing to do with this money. I'm a single mother of three and what to save and earn for future short and long term. I have no previous knowledge on finance and investing. Thanks so much!

$50,000 is not a great deal of money for a person in your situation. You did not mention whether you had a Roth IRA account. If you do not and you have earned income, that would be one thing to consider. It is a retirement account in which you can place upto $4000 a year and the money that the account earns is tax free--a big advantage. But if you might have plans for some of the $50,000 before retirement you may not want to use that vehicle.

Lets talk a little about the $40,000 worth of debt. Is not part of that debt your ex's? I can not imagine it being all yours. If so I would get some legal advice concerning it. Unfortunately, I can not advise you on that. No expertise.

Of the $50,000, put $5,000 into a cd for one year. They pay 5%. If you need the money for an imergency, cash it in early. You will loose some of the interest, but hopefully you will not have to cash it in.

Investing has its risks. You need to know that right up front. If you invest in stocks there is every chance you could suffer a 30% drop in their value, unlikely but possible. However, over time, say 10 years the return should beat other alternative investments if you have a diverse holding of securities.

The best way to accomplish that is with mutual funds or index funds. My personal preference is mutual funds, but many people prefer index funds. There are pluses associated with both.

Fidelity and Vanguard and T Rowe Price offer a wide range of funds including some index funds. Other companies also have different offerings.

If I were in you position, I would choose 4 different funds. That way your investments will be more diverse than by placing all of the money in just one fund.

Here are examples:

Fidelity Diversified International 5 yr annual return 17%
Fidelity Contrafund 5 yr annual return 11.5%
Fidelity Value 5 yr annual return 15.6%
Fidelity Spartan International index fund 5 yr annual return 14%
this fund is an index fund and has very low turnover of investments and very low tax risk but it has a very high minimum investment of $10,000. It might be a good substitution for the 1st selection but it would not be too wise to own them both.
Fidelity OTC 5 yr annual return 10%

That should give you an idea of a diversified holding of stock investments that over time should yield 10% annual return, but remember it may not because there is no guarantees with investments.

To give you a brief example of what I mean, the Fidelity OTC had three terrible years back to back from 2000 to 2002. It dropped in value 26%, 23%, and 24% during those 3 years. That can be rather disheartening, especially year after year, but over the long term it has had a very decent return.

your needs are not saving and investing they are daily living...put it in a savings account at your bank where you have a the checking account. you will have easy access to it, and wont have to deal with the complexities of investment accounts

Put about 50% of it in your bank account and use the other half. One half that you keep in your wallet or whatever is to live off of with your kids. The half in the bank is to save so you can get interest added to that.

1. Pay off your debts
2. Put the money in a bank or credit union money market account
3. Continue to live off your income

Now you have a great emergency fund. Leave the money there until you read Dave Ramsey's book The Total Money Makeover.

He has a plan for living life debt - free and also having plenty to live on. www.daveramsey.com

Congratulations, your decision to pay off outstanding debts is the best start you can make...it'll probably save you thousands in interest. As for the remaining $50k there are some does and don'ts. 1. Look for a high yield savings plan that won't tie up the money (in case you need a quick couple of thousand). Most bank savings plans are currently paying next to nothing in interest. Look into an ING account. ING is the company name. It pays a fair return, can be done online and you have access to your money within 3 days.

Do you have a house?