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My grandfather gave me his car just before he passed away. I drove it for a few years and now am ready to sell it. My question: What to do with the money? The car is worth about $10,000. Should I put the money toward my $13,000 credit card debt or should I put the money in savings, as I currently don’t have any?

Answer: Use your grandfather’s generous gift to both help you retire most of your debt and get a start on an emergency fund.

After you sell the car, take $500 to $1,000 of the proceeds for your emergency fund. That will cover most minor emergencies and should keep you from adding to your credit card debt. Put the money in a safe account that’s accessible but not too accessible. If it’s too easy to tap, you might be tempted to raid it for non-emergencies. A savings account at an online bank or a credit union are two good choices.

Take what’s left and pay down your credit card bills. Stop using your cards and figure out how much you need to put toward your debt to get the rest of it paid off in a few months. Then trim your expenses to come up with the money and set up an automatic transfer from your checking account to your cards.

Despite what you may have heard, credit card debt isn’t normal — a majority of U.S. households don’t carry credit card balances, according to Federal Reserve statistics — and it’s a real cancer on your finances. While you’re young, you should get out of the habit of carrying balances and into the habit of paying your cards in full every month. You’ll be richer for it, and less likely to find yourself in the sad position of being old and in debt. Read on:

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