CNN Savings Challenge Couple Clears Nearly $40,000 Credit Card Debt With Modest Inheritance

Mariza and Geffrey Gordon, a Milwaukee couple participating in CNN's Savings Challenge, used a modest inheritance from a relative to pay off nearly $40,000 in credit card debt, freeing roughly $1,400 a month previously spent on minimum payments. Financial educator Tiffany Aliche said she would have preferred the couple first set aside funds to cover expenses until Mariza, whose two months of severance are about to run out, finds a new job. She suggested paying off only half the debt to improve credit scores enough to qualify for a 0% interest balance transfer card, while earning 4% on the remainder in a high-yield savings account. The couple told CNN they gave one son $5,000 and placed the remaining inheritance in a high-yield savings account. Geffrey aims to save 20% of his paycheck monthly through direct deposits into two new high-yield accounts.