What to do with tax refund? - Page 2

[katheek77]

Pay off the debt, put the other 1600+ to start your emergency fund, and then [I]redo your exemptions[/I] so you're not getting such a huge refund. Imagine what you could have done with that extra 400+/month over the past year!

[dsaucone]

Originally Posted by katheek77

Pay off the debt, put the other 1600+ to start your emergency fund, and then [I]redo your exemptions[/I] so you're not getting such a huge refund. Imagine what you could have done with that extra 400+/month over the past year!

Most of it is EIC and CTC. We make under $30,000 with 2 kids.

[notkept]

ONE YEAR!! Heck, it takes that long to pack! Pay everything off, bank the payments and take your EIC for next year to buy a house. : You'll have no debt, a home and an emergency fund. PERFECT. Use the time to daydream, declutter and pack. Did you say that you have a new addition coming? They don't need too terribly much space for the first year anyhow. Good luck!

[dsaucone]

Originally Posted by notkept

ONE YEAR!! Heck, it takes that long to pack! Pay everything off, bank the payments and take your EIC for next year to buy a house. : You'll have no debt, a home and an emergency fund. PERFECT. Use the time to daydream, declutter and pack. Did you say that you have a new addition coming? They don't need too terribly much space for the first year anyhow. Good luck!

Yeah he's already here. He's got a bookshelf for clothes/diapers and a cradle that he doesn't use. He sneaks into bed with us somehow.

Oh not me, I could pack in a day if it meant moving out of here!

[Zannah]

Originally Posted by ksera05

so total, you have $3320 in debt. That's not horrible, but that's definitely something you probably want to get rid of?

I personally would get a copy of Dave Ramsey's The Total Money Makeover and follow his plan. I'd start out by putting $940 in my savings account so that I had a solid emergency fund of $1000. If you get $4,000 back, that'll leave $3060. I'd then pay off the $400 Discover card, the $1350 Alienware card, the $770 Lowes card. That will leave $540, and only one minimum payment a month (the $19 Goodyear card).

I'd then personally would take the $500 and put it in savings towards a new car. I'd put the $40 left towards the Goodyear card and then I'd start snowballing to get that Goodyear card paid off as fast as possible. I would then, as soon as it is paid off, evaluate my budget and start saving for both a newer car and also money for a house. If you need $5000 for a downpayment, you'll want to save that, plus the money you'll need to have in savings for repairs (you're going to want at least $1000-2000 in case, you know, say, your hot water heater and your air conditioner break at the same time, for instance.)

You totally could use this as a great jumping off point to not only get out of debt, but also get saved up for a house very quickly!

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