Between our tax return and DH's bonus from work this year we will soon have a lump sum of cash. Typically we contribute the max to an IRA for each of us, then fund our son's college savings fund (529). We do this after he maxes out his 401K at work. Our only debt is our mortgage and HELOC. Assuming no major disruption to his salary or unexpected expenses, we are set to pay off the HELOC in about 2.5 years. Taking that money and throwing it at our mortgage, we *could* be debt free in about 7 years.

Given the way the market is performing, I'm tempted to not contribute to the IRA and college fund this year. We would then either save that lump sum, or throw most of it at the HELOC, getting us further ahead in our quest to be debt free.

We have a small emergency cash fund of about 3K. The rest of our emergency money is in our HELOC. High limit, relatively low balance and lots available if we really needed to draw from it.

I hate to draw from the HELOC for any reason though, hence the thought of saving the lump sum.

I know I'll probably get varied responses here, but I'm curious what you would do in this situation.

I think that unless I could pay off the HELOC completely, I would put the money into savings. I would also try to put something extra towards the HELOC on a monthly basis whenever possible.