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UPDATE IN POST #33:What would you do with a windfall?

post #1 of 36
Thread Starter 
To make a long story very short, over the next 6 months, my family will be receiving a series of windfalls totalling nearly $25,000 (including about $6,000-$7,000 in tax refunds--all from additional child tax credit and EITC). Assuming a few things, what would you do with these sums of money?
--We have $1000 emergency fund
--A very small student loan and some consumer debt (totalling less than half of the total amount of the windfalls)
--No vehicle loans, but our cars have 100,000 and 150,000 miles on them, respectively and only seat 4 and 5 passengers, respectively.
--We plan to have a 4th child in the next 12-18 months
--Total household income is slightly <$35,000/yr (living in a very LCOL area)

What would YOU do with these windfalls?
post #2 of 36
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
post #3 of 36
I would pay off the debt, then trade in the older/higher mileage vehicle for a used minivan that will seat the whole family. Add whatever is left, plus whatever you've been paying monthly on the debt, to savings.
post #4 of 36
Quote:
Originally Posted by RoadWorkAhead View Post
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
That's exactly what I would do.
post #5 of 36
Quote:
Originally Posted by UptownZoo View Post
I would pay off the debt, then trade in the older/higher mileage vehicle for a used minivan that will seat the whole family. Add whatever is left, plus whatever you've been paying monthly on the debt, to savings.
:
post #6 of 36
Quote:
Originally Posted by RoadWorkAhead View Post
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
This. I was tempted to go for you getting a used mini-van, but you plan on ttc for a year or more away. That gives you time to save up money for a vehicle yourselves. This is the least risk, and allows you to have a lot more wiggle room, since all your debt is gone. Whatever you've been paying to debt, pay to savings.

Ami
post #7 of 36
Quote:
Originally Posted by RoadWorkAhead View Post
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
Yes.
Quote:
Originally Posted by JTA Mom View Post
Whatever you've been paying to debt, pay to savings.
ITA.
post #8 of 36
Quote:
Originally Posted by RoadWorkAhead View Post
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
Yes!
post #9 of 36
Pay down debt and buy a minivan so we all could fit in one vehicle.
post #10 of 36
Pay of all debt, and do 6 months living expenses in savings.

I am hardcore about no debt. When you have no debt - you have freedom. There's no reason to wait on paying debt!

Or, after paying all the debt, do 3 months living expenses and use the rest to purchase a (quality) used car. I had a used car that had 250,000 plus miles on it. I bought it that way. I replaced all the belts (including timing) on it, and it ran wonderfully for years. No problems, and just a dream car considering I paid less than $500.00 for it. I wound up donating it to a charity program - still in good condition.
post #11 of 36
I recently watched Suze Orman on Oprah with financial advice for the new economy. She said that financial advice shoud change as the economy changes. Her new advice was save the cash because on a time of crisis having cash on hands means staying afloat when things go down the drain.

It made sense to me, so I would just save the money, stop using the CC and continue to pay the minimum payment on the debt and student loans. I know it's not the popular advice here, but that's what I would do. I would sleep much better at night knowing I have 25k in a secure deposit somewhere that I could use to put food on the table and a roof over our heads no matter what.
post #12 of 36
What others have said - pay debt, emergency fund, and saw for a new/used vehicle until a baby is here (or one of the existing vehicles fails utterly).
post #13 of 36
Quote:
Originally Posted by Olma View Post
I recently watched Suze Orman on Oprah with financial advice for the new economy. She said that financial advice shoud change as the economy changes. Her new advice was save the cash because on a time of crisis having cash on hands means staying afloat when things go down the drain.
LOL that lady is so funny.

Ditto what Roadworkahead said.
post #14 of 36
Quote:
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
Ditto!
post #15 of 36
Quote:
Originally Posted by RoadWorkAhead View Post
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
Plus take a little bit and do something FUN with it. A weekend away? A toy your family wants? Set aside a bit to enjoy.
post #16 of 36
Quote:
Originally Posted by UptownZoo View Post
I would pay off the debt, then trade in the older/higher mileage vehicle for a used minivan that will seat the whole family. Add whatever is left, plus whatever you've been paying monthly on the debt, to savings.
This. And add whatever you've been paying toward your debts to the sinking fund for the new vehicle, running your current vehicles until the newb is born or one of the current vehicles fails beyond easy/low cost repair.
post #17 of 36
Well, it would depend on exactly how much the debt totals and the interest rate and what your monthly expenses are- I would want the debt gone, a 3-6 mo emergency fund and a fund for a "new" vehicle. And I would for sure take a bit to have a little fun.
post #18 of 36
Quote:
Originally Posted by RoadWorkAhead View Post
Pay off debt and fully fund a 6 month emergency fund, anything left to a sinking fund for a new vehicle.
same here!
post #19 of 36
Quote:
Originally Posted by Olma View Post
I recently watched Suze Orman on Oprah with financial advice for the new economy. She said that financial advice shoud change as the economy changes. Her new advice was save the cash because on a time of crisis having cash on hands means staying afloat when things go down the drain.

It made sense to me, so I would just save the money, stop using the CC and continue to pay the minimum payment on the debt and student loans. I know it's not the popular advice here, but that's what I would do. I would sleep much better at night knowing I have 25k in a secure deposit somewhere that I could use to put food on the table and a roof over our heads no matter what.
I like this advice alot. It's close to what I would do. I probably want to keep about 10K liquid and spend the rest of paying down the consumer debt and buying a new car outright. I'd keep the student loan.
post #20 of 36
Quote:
Originally Posted by Olma View Post
I recently watched Suze Orman on Oprah with financial advice for the new economy. She said that financial advice shoud change as the economy changes. Her new advice was save the cash because on a time of crisis having cash on hands means staying afloat when things go down the drain.

It made sense to me, so I would just save the money, stop using the CC and continue to pay the minimum payment on the debt and student loans. I know it's not the popular advice here, but that's what I would do. I would sleep much better at night knowing I have 25k in a secure deposit somewhere that I could use to put food on the table and a roof over our heads no matter what.
This is what I would do too. For my peace of mind, right now in these economic times, money in the bank is much more easy to sleep to then a paid off loan.
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