What should we do with this money??

[cristina47454]

Just had a complicated windfall of 25k. So scared to do the wrong thing (this has happened in the past...). Despite our terrible financial situation, we have actually learned an enormous amt from these boards, and are living very frugally, budgeting, and following Dave Ramsey's babysteps.

This is our situation -we are scraping by:

• We rent.
• We own both of our cars.
• DH is a traveling salesman (full commission) - his car is 96 Jeep Cherokee with over 250k miles on it.
• Sales have been painfully slow and we hope they pick up now that spring is here, but we had to borrow $1k from his dad (and we still owe him 5K from last year) and we had to borrow 5k from a friend to cover bills last month.  Still no sales in March...not sure what happens for April's bills unless suddenly every appt he goes on turns into a sale.
• We have about 50k in cc debt ... we are snowballing this, but it has been SLOW progress and we actually had to pull out the cc for groceries and gas last month. About 5k of this is at 16%. The bulk of it is at 12% and the remainder (about 10k) is at 1.99%
• April tax burden (FICA) will be about 5k
• We are probably looking at a move at the end of the summer - we live very rurally, with no real work opportunity.  DH commutes at least 3 hrs a day, and something has to change. Most jobs locally are for healthcare, which neither of us is qualified for.  I need to go back to work bcs of our financial situation. I currently work VERY part time locally, but really only make about $300/mo. He potentially has an opportunity in CO, but if that doesn't work out, we still need to move to where there is more opportunity (don't we?)
• DH needs to file bankruptcy for his real estate development LLC - the project died a horrible death when the market crashed and he probably should have done it long ago, but it's taken him a long time to come to terms with it. This is probably high on the list of priorities - don't know how much filing will cost...
• We have about 4k in a EF/Hills and Valley acct (just recently funded this from an investment payout)
• I imagine DH will want to tithe out of this, which I know will be a fight bcs I am in panic mode most of the time, but it's "his" money (it's essentially a deposit he made on something which is being returned), and if it's important to him, I feel like I need to be ok with this.

If you got this far, THANK YOU. How would you approach this? My first inclination is that taxes and bankruptcy filing are non-negotiable.  As is a supplemental Hills and Valley acct so that we never have to borrow money from friends and family again (even though we are coming into DH's busy time, supposedly). Just not sure what to assign to each category and what to do with the remainder...

[tinuviel_k]

First off I think you should repay your father the $6K that you owe him, and your friend the $5K that you owe him. Owing money to friends and family is no fun, and it can really strain relationships to have that debt handing over your head.
($25,000- $11,000 = $14,000 remaining)

Next I think you should hold back $5K for the taxes that you will owe in April.
($14,000- $5,000 = $9,000 remaining)

Covering next months bills is VERY important, IMO. You don't want to borrow the money you just returned to friends and family, and you don't want to drive up the credit card anymore. I'd set aside $4K for this (or whatever you bare-bones monthly bills and expenses are.)
($9,000- $4,000 = $5,000 remaining)

Then set aside $3K for moving expenses (you'll need 1st month, last month, and deposit, plus moving expenses, so it could be more).
($5,000- $3,000 = $2,000 remaining)

This would leave you with $2000 to tithe if your husband is insistent on that. If he is willing to not tithe I would set that last bit aside in an emergency fund to help cover future expenses (bankruptcy fee, higher that expected moving costs, car repairs, etc).

[monkey's mom]

I agree with tinuviel_k. You gotta pay back the friend and dad.

To me, tithing seems like a luxury you can not afford. I would set the remainder aside for the bankruptcy costs (I have no idea how much that will be) and your emergency fund.

[TiredX2]

I, also, totally agree with tinuviel_k

I would also make the following suggestions:

Go over your budget and short and long term financial plans with someone you respect financially.  It sounds like money issues have been around for quite awhile and I'm not sure if you have a plan to "fix" this.  If DH is working but not making any money, it sounds like he NEEDS to get a different job.  While it might be frustrating to work at something lower waged, it sounds like you guys would be better off with something much more dependable.

Secondly, really discuss tithing with DH.  If this is a biblical issue, tithing was originally supposed to be on your INCREASE.  So, if you had 100 goats and during they year they had 50 baby goats and you ended up eating 40 goats, how much would you tithe?  People currently seem to look at it as 5 (10% of the 50) but the way it is commanded would be 1 (you go from having 100 goats to having 110 goats, so 10% of the increase is 1).  I could also give a lot of arguements against tithing if you are Christian (since it is a Hebrew Testament concept, based on a theocratic situation) but I won't go into those ;)

[Tumble Bumbles]

I would absolutely tithe. Then,  pay back people you owe. Then, pay taxes (don't mess with the IRS). Then, discuss and agree upon the remaining.

[cristina47454]

We started a discussion about it this afternoon. I really thought we would need to run through multiple scenarios, but it seems pretty simple (so far), although not 100% resolved. The current thinking is 5k to the friend that lent us money and 5k to taxes. (15k left) 1k to his dad that is the most recent loan (I'd like to pay him back more, but no rush from dad, and we're trying to get our feet under us). 2.5k to file bankruptcy (estimated).  We're putting a bunch on Craigslist, so hopefully that will offset moving costs, so we'll budget $500 (our current plan is to rent from my mom about 2 hrs from here, so security deposits won't be such an issue). 11k left. That's as far as we've gotten. The rest will probably go in a Hills and Valley, with the understanding that this job is not cutting it and he needs to be looking for something else. If the car dies in the meantime, we'll dip into the Hills and Valley acct, I guess. Once DH has that other job, we can throw a massive snowball at the credit cards. The tithing thing hasn't come up (yet) and honestly I feel conflicted about it. In the meantime, hoping he manages to pull enough sales together for April bills.  It would be a real bummer to have to live off of it, instead of being able to use it to move forward!

[mamaofprincesses]

Well, we are staunch tithe payers, and I wouldn't tithe on this. You said it was a return of a deposit he made, right? I tithe on the money that comes into our home ONCE. If I get a deposited returned, I already paid tithing on that income once. I don't need to do it again. If I had the money invested, I would pay tithing on the difference between my original investment and the current amount (the increase).

Just one perspective.

[Poddi]

I agree that paying taxes first, family and friends second.  Even though dad's not in a rush, owing family money just doesn't feel great, unless it was supposed to be a gift.  Does your DH feel he need to tithe because this is some money he didn't pay tithe before?  If this was some after tax, after tithe money then he already paid before.  It's like if I lend friends some after tax money and they return to me later, I don't need to pay tax again, right?  Because it's not a new income.