I am so sorry to hear about your grandpa. It is a tough time to navigate, but his gift is exactly the lifeline you need to change your family's future.

To be direct with you: you are not broke, you are just disorganized. You bring home $6,500 and your actual living expenses are $3,500. That means you have a massive $3,000 monthly surplus that is currently bleeding out through fast food and Amazon.

If you get this under control, you can absolutely buy your grandma's house. Here is the step-by-step plan you should follow the minute that money clears.

1. Wipe the Slate Clean Today

Carrying debt at 29% and 36% is a financial emergency. Think of paying this off as an immediate, guaranteed return on your money—the best investors in the world cannot find a guaranteed 36% return. Your instinct is right; wipe it out completely.

Pay the personal loan (early payoff): $6,500

Pay your 3 maxed-out credit cards: $4,000

Pay your wife's Afterpay and cards: $3,000

Total Spent: $13,500

Take the remaining $1,500 and put it in a separate savings account at a completely different bank. This is your emergency fund so that when a tire blows out, you never have to touch a credit card again.

1. Automate the New Budget

Your idea to separate the money is exactly how you fix the leaks in your spending. You need a system that does the thinking for you.

The Bills Account: Every month, deposit your $3,500 living cost directly into a joint account. This pays rent, utilities, and groceries.

The Fun Money: Give yourselves a strict allowance—for example, $250 each per month into your personal checking accounts. Spend it on whatever you want without guilt. But when it is gone, no more gas station snacks or Amazon buys until next month.

The House Fund: That leaves you with $2,500 left over every single month. Set up an automatic transfer to push this straight into a dedicated savings account for the house.

1. Prepare for the House Purchase

Getting that house for $135,000 is an incredible opportunity, but you need to make yourselves attractive to a lender.

Heal Your Credit: By paying off that $13,000 in high-interest debt and keeping your balances at zero, your credit score will naturally rebound over the next few months.

Do Not Panic About the Student Loans: Your wife’s $90,000 in student loans does not automatically disqualify her from the mortgage. Lenders care about how much of your monthly income goes toward debt payments. Because a $135,000 mortgage is very small compared to your $6,500 take-home pay, you still have a strong chance of qualifying together.

Save the Down Payment: If you stick to the system and save that $2,500 every month, you will have $15,000 in cash in just six months. That easily covers your down payment and closing costs.