tax refund! What would you do?

[lyeag]

Ok, let's say you were getting a really big refund that you didn't plan on. Would you pay off a vehicle early, (or some other bill) or go to WDW? Assume that you aren't having any trouble paying your bills each month. Would you be good and try to get ahead, or would you try to talk your dh into another trip?

 

[jennz]

Can ya take the easy way and split it - 1/2 toward the vehicle and 1/2 toward a shorter but still extra vacation?

 

[Mom2Ben02]

Both!! I would pay off the car first and foremost. Then figure out what you want to spend for a disney trip...say $2400. Take the amount of the car payment - say $300 - and have that taken automatically from your checking to an ING savings. If you don"t have one, it is a great rate, I think 2.3 now, and with a referral you get $25 for opening it.

So you can plan your trip for October, with no pain, and have your car paid for!

 

[aka-mad4themouse]

I'd pay off the vehicle early and then take the equivalent of a monthly payment and put it in a savings account every month. Then I'd use the saved money to splurge on a Disney trip!

 

[aka-mad4themouse]

Both!! I would pay off the car first and foremost. Then figure out what you want to spend for a disney trip...say $2400. Take the amount of the car payment - say $300 - and have that taken automatically from your checking to an ING savings. If you don"t have one, it is a great rate, I think 2.3 now, and with a referral you get $25 for opening it.

So you can plan your trip for October, with no pain, and have your car paid for!

Great minds think alike.

 

[summerrluvv]

*I* would pay off maybe half the car and take a trip with the other half.

My refund is pretty big, so I'm using a little less than half for a trip (haven't decided when to go though) and saving the rest

 

[lyeag]

I pretty much decided to pay off the vehicle and then use that money towards a trip, but I just wanted to hear what everyone would say. I really want to wait unitl ds 3 1/2 is at least 5, so he can enjoy more rides. That should give us plenty of time to plan a trip and do it right. I want to try to stay in the CR tower, maybe even 12 or 14th floor. VAn loan runs through May 06, so I could have it paid off this March! Saves me 400! I could do a lot with that!

It sure is fun imagining what I could do with it though......

 

[canwegosoon]

I personally would pay off the bill(s), then you can always take that monthly bill money and have it go towards 1/2 to paying yourself (eg emergency funds or IRA) and half towards a vacation account.
You will accomplish several things
#1 save any intrest you are paying on bills like a car loan.
#2 by contribution the monthly bill money to an IRA, you are actually preparing for an even larger tax return next year(or even look into having this money taken out pre tax). And having Emergency funds is hedging your bets against paying intrest on large ticket items.
#3 Hopefull you will still have enough to go away on a vacation (poss. Oct/Nov), and I bet your Spouse will be more likely to support another vacation if there are no bills hanging around.

But your choice!

 

[lyeag]

We already are contributing to his retirement and a roth...... we just have the usual bills, car loans and just 3 cc not too bad on the balances. He doesn't have any student loans, and mine is very near to paid off. Bal of about 2500. Putting a little more into the roth is never a bad idea.....

 

[swilshire]

I'd get rid of the credit card bills first. I am assuming the interest rates are higher overall on them, particularly because of the way they calculate average balances and the like. Get them down to where you are paying them in full every month and you'll save lots.

Also, check with the holder of your auto loan. Mine was with the credit union, so I could pay extra on it without paying it off and reduce the interest, which paid it off early.

Be sure to adjust your deductions so there is no big refund next year unless there was something unusual going on this year. You don't want the IRS to use your money interest free all year. Breaking even at the end of the year should be your goal.

Sheila

 

[lyeag]

d/h was in a combat zone for a good part of the year. Taxable income was really low... 3kids no big refund next year I am sure, this one really shocked me.....

 

[jennz]

Boy - that's a tough way to get a big refund. It sounds like he won't be in a combat zone next year - correct? Congratulations! Triple excitement - big refund, DH is out of the combat zone, and you're going to Disney World!!

 

[BonSchwe]

Got a large refund and ended up spending the whole thing toward our trip in February for just DH and myself. Even the kids didn't object since they know we've probably have spent 3x that on them over the year!!

 

[lyeag]

God willing, no trips to the big sandbox during the next year. Actually we went to Disney over Christmas- I saved his combat pay and all the extra he earned... We spend 4 nights at the CR and then went on to visit relatives in another part of the state. My husband is thinking I am going overboard by thinking of another trip. He had a good time, but he is not getting Disney crazy like I am! He knows I want to go back and says ok, but he doesn't see a trip anywhere in the future. I just have a good time doing research and planning and dreaming.....

 

[BibbidyBobbidyBoo]

Sounds like you made the right decision for yourself.

If it was us, we'd want to go to Disney sooner than that- so we'd probably pay off any credit card balances (if we had any) first to allieviate those interest payments being made, but probably wouldn't pay on our vehicles. Because it wouldn't be enough to pay them OFF, therefore wouldn't make us have that much extra (the vehicle pymt) each month to save for the trip- it would just be paying extra on it and lessen the time of the loans later on.. years later. LOL In other words if we applied the money to the vehicle pymt we'd still be making the same pymt on the vehicle every month and that wouldn't help us to save for a Disney trip now would it? LOL

We'll probably use our tax refund this year to help pay off our Disney cruise for 2006 and then use money we would have saved each month to pay that off- to pay extra on the debts we have (vehicles, make extra house pymts also).