If you found $15,000 what would you do with it?

[tammymacb]

Here's the story. I'm going to be getting a tax free check for $15,000. I want to use the money wisely, so I'm looking for advice from the smart money people.

I've been an RN for over 15 years. I work a weekend contract and overtime almost every week. I make an excellent salary and never charge "small" purchases. I use my CapitalOne Miles card for all "big" trip purchases and pay the trips off in full for the next billing statement.

I have money in savings, though not as much as I'd like.

I have a mortgage, but my house is around 9 years old and even in this terrible housing market I have over $100,000 in equity. The payments are affordable because we have a good interest rate and we've stayed put.

I have a car payment. It's a Toyota Rav 4 and it's almost 2 years old with 22,000 miles. This is the first car I've ever owned that I plan on keeping and paying off and having no car payment. I've NEVER not had a car payment!

I do have a large CC bill. It's around $5000ish, but I actually used one of the 'credit card checks' sent to me to buy Disney Vacation club. I pay 2.99% interest for the life of the loan. I've always paid more than double the necessary amount and I've paid around 2/3 of it off in just over a year.

If you were me, what would you do with the money?

 

[DawnM]

I don't think I have enough info to really know. How much do you owe on the car? What is the interest rate and how long left on the loan?

Dave Ramsey would say to pay off all of your debts. 2.9% is still interest you can save if paid off and will free up that monthly payment to allow for more savings, retirement, etc....

I would say pay off the CC and the car loan.

We always thought we would have a car loan too but since doing Dave Ramsey we haven't had any loans besides mortgage in three years! I can't tell you how great that feels!

Dawn

 

[DeniseinNS]

I would pay off the car and if there's anything left put it on the CC. With not having a car payment I would put that money on the CC bill every month and get it paid off faster.

 

[minnie1928]

I would pay off the car and if there's anything left put it on the CC. With not having a car payment I would put that money on the CC bill every month and get it paid off faster.

I agree with this, assuming that the car loan has a higher interest rate than the CC. Once they're gone, then fluff up that savings account to where it needs to be.

 

[hippiemama76]

If the car is 2 years old, couldn't you pay off both the car and the credit card with the check? What an exciting position to be in! Congrats

 

[VAN]

Pay off the CC then (because you say you don't have enough in savings) split what's left ... save 1/2 and put the other 1/2 toward your car loan.

 

[wdwfan16]

Here's the story. I'm going to be getting a tax free check for $15,000. I want to use the money wisely, so I'm looking for advice from the smart money people.

I've been an RN for over 15 years. I work a weekend contract and overtime almost every week. I make an excellent salary and never charge "small" purchases. I use my CapitalOne Miles card for all "big" trip purchases and pay the trips off in full for the next billing statement.

I have money in savings, though not as much as I'd like.

I have a mortgage, but my house is around 9 years old and even in this terrible housing market I have over $100,000 in equity. The payments are affordable because we have a good interest rate and we've stayed put.

I have a car payment. It's a Toyota Rav 4 and it's almost 2 years old with 22,000 miles. This is the first car I've ever owned that I plan on keeping and paying off and having no car payment. I've NEVER not had a car payment!

I do have a large CC bill. It's around $5000ish, but I actually used one of the 'credit card checks' sent to me to buy Disney Vacation club. I pay 2.99% interest for the life of the loan. I've always paid more than double the necessary amount and I've paid around 2/3 of it off in just over a year.

If you were me, what would you do with the money?

How much do you owe and what is the interest rate on the car? How many months will your EF last?

If the $15K was enought to pay off the vehicle I would do that but my opinion may change with more information.

 

[StitchandPooh'sMom]

Without knowing how much you owe on the car or what your interest rate is, I'd:

contribute $5000 to your IRA for this year (I think the limit is still $5000 for 2010)
use $9000 to pay off/down the CC and/or car payment
use $1000 just for fun

That might change depending on your car balance and interest rate and how much of an emergency fund you have. I would think your job is probably pretty secure. If you have a high interest rate on the car payment, it would be better to pay the car off. Also, if you've already made your 2010 IRA contribution, you could apply that money to an emergency fund or to debt reduction. But if you are not in the habit of funding your retirement, there is no time like the present!

 

[katied]

Without knowing how much you owe on the car or what your interest rate is, I'd:

contribute $5000 to your IRA for this year (I think the limit is still $5000 for 2010)
use $9000 to pay off/down the CC and/or car payment
use $1000 just for fun

That might change depending on your car balance and interest rate and how much of an emergency fund you have. I would think your job is probably pretty secure. If you have a high interest rate on the car payment, it would be better to pay the car off. Also, if you've already made your 2010 IRA contribution, you could apply that money to an emergency fund or to debt reduction. But if you are not in the habit of funding your retirement, there is no time like the present!

I agree with this - only I might spend $2K on fun, and $8K on debt paydown.

 

[punkin]

I don't know what the car loan is but 2.99% for the life of the loan CC I wold not be so quick to pay off. I would contribute to IRA (reduce tax liability w/ tax free money - I like that). The rest would go into college savings (but that's just my particular thing right now with DD17 going off to college and DD11 still to go).

 

[lorac4disney]

I would pay off whatever had the highest interest rate between the CC and the car. From the way it sounds, that would be the car. Whatever was left, I would put on the CC. Then I would use the money I had been using on a car payment to pay off the rest of the CC, leaving your mortgage as the last thing to pay off. While I'm a big believer in saving money, I'm a bigger believer in eliminating interest charges by eliminating the debt first. For me, it makes no sense to stick money into saving where you will earn peanuts on it (while also incurring taxes on those peanuts) while paying even more to someone else for interest.

 

[andrews_dad]

I would not pay off a 2.99 for life so fast. You might do better investingt that money and getting compound interest way above that 2.99 rate .... depending on your age & years to retirement, your portfolio, your goals, etc.

All in all, a nice problem to have. Just be sure you are not wasteful with the money.

 

[eliza61]

Generally I would:
1st. Make sure I had 6-8 months emergency cash in the bank.
2nd. pay off which ever is higher car note or credit card.
3rd. if any remainder pay on the 2nd loan.

 

[Mickey527]

Is there something big that you have been putting off?
My brother who is in a nursing home now due to his diasbility sold his house and gave each of us $18,000 last year.
I put some down on a new car, had a new on demand hot water heater installed and had the oil tank dug out of my yard and another replaced it in the basement. The tank has been buried for over 50 years and I have been worried about it leaking and causing an oil spill, but could never afford to have it dug up. Of course when they dug it up it looked brand new since my house is on a hill with good drainage and it had never sat in water. the guy said he had never seen one buried that looked so good, not a rust spot on it.
Alol things I could have lived without but "splurged" with the found money.

 

[PiperPizzaz]

Generally I would:
1st. Make sure I had 6-8 months emergency cash in the bank.
2nd. pay off which ever is higher car note or credit card.
3rd. if any remainder pay on the 2nd loan.

I agree with this one.

 

[LuluLovesDisney]

Generally I would:
1st. Make sure I had 6-8 months emergency cash in the bank.
2nd. pay off which ever is higher car note or credit card.
3rd. if any remainder pay on the 2nd loan.

I agree with this, but to be honest, I would probably have closer to 4-5 months emergency cash and use a little of the money ($500? $1000?) for something fun or something I needed that I had been putting off.

 

[bettymae1121]

Well, really, as long as you don't go out to your back yard and light the $15k on fire there isn't a "wrong" answer here. I do think you should take $1k-$2k or so and do something fun, and use the rest for debt paydown/savings. As other posters have pointed out, there are serveral ways you can go with that, all of which make sense. Pick the one you like best.

What I do recomend is that you think about it for a little bit before making any choices. Be sure what you *think* you want to do is *really* what you want to do. Once you pay down that debt or send the money into an IRA, that's it...you can't get it back again.

 

[Mom2Ben02]

If it were me, I'd first take my family on vacation. I know that is not the most financially saavy thing to do, but I'd do an uber budget trip to WDW. We were supposed to go in January, but then my hubby lost his job. I'd "blow" $3000 on this.

Rest half to the car loan and half to savings.

 

[Planogirl]

Does your house need any repairs? What about appliances? Are they all in good working order? I would look there first. Then I would probably pay off the credit card debt and maybe buy something a little frivolous. Big screen TV? Hot tub? New landscaping? Clothing?

Lots of possibilities and a nice problem to have.

 

[keishashadow]

Here's the story. I'm going to be getting a tax free check for $15,000. I want to use the money wisely, so I'm looking for advice from the smart money people.

I've been an RN for over 15 years. I work a weekend contract and overtime almost every week. I make an excellent salary and never charge "small" purchases. I use my CapitalOne Miles card for all "big" trip purchases and pay the trips off in full for the next billing statement.

I have money in savings, though not as much as I'd like.

I have a mortgage, but my house is around 9 years old and even in this terrible housing market I have over $100,000 in equity. The payments are affordable because we have a good interest rate and we've stayed put.

I have a car payment. It's a Toyota Rav 4 and it's almost 2 years old with 22,000 miles. This is the first car I've ever owned that I plan on keeping and paying off and having no car payment. I've NEVER not had a car payment!

I do have a large CC bill. It's around $5000ish, but I actually used one of the 'credit card checks' sent to me to buy Disney Vacation club. I pay 2.99% interest for the life of the loan. I've always paid more than double the necessary amount and I've paid around 2/3 of it off in just over a year.

If you were me, what would you do with the money?

chase? even if stated a fixed loan, chase has been aggressive with increasing what many thought were 'fixed interest rate' products. Good idea to pay it off asap.

not sure doing contract work if eligible for 401K from employer, do u have a roth IRA set up?

do you have have children? college is expensive & increases yearly...i have #3 up @ bat next year (sigh). Might want to check into your states program of pre purchasing college credits @ today's prices.

any balance leftover from above, ladder CDs short term for when the rates rise so u r flexible.