What to do with $$$$?

[Minnie_me]

In the Spring, I will be receiving $6500 (tax credit for buying my house). I have lovely ideas for the money!!!! I would like to take my daughters on a little vacation (nothing fancy, not Disney........), I would like to put in a master bathroom, I would like to fix my driveway and get the garage in good shape (paint, new door, etc.).

But then there's my debt. I'm in pretty good shape. But I have a credit card with a $6000 balance. I don't use the card anymore. I pay almost twice the minimum payment each month. But the interest is killing me, and it doesn't seem to go down like it should.

So WWYD? Pay off the card? Or live a little? Or fix up the house?

 

[MSSANDRA]

Pay off the debt and then save what you have been paying each month to do the other things you want to do. We are finally totally debt FREE and we love the feeling!

 

[niccikatie]

No question, I'd pay off the debt. I'd put the $500 into savings and start saving for my goals (emergency fund, sinking funds, college, retirement, etc).

 

[Suellen]

I'd pay off the debt too.

 

[Firefly09]

I would pay off majority of the debt (say 4000-4500), then put some away in savings and take a small vacation. Also, after paying off that much of the CC debt I would continue making the same $ payment that you were already to continue paying down the rest.

 

[mrodgers]

A no brainer there.

If you don't have any money saved up for emergencies, then some would need to go there. Then again, with being able to pay off debt all at once, that's what I would do instead of putting any away for emergency use, then build up emergency money afterwards.

 

[Minnie_me]

Thanks everybody --- -I'm really really really not budget-savvy. I wanted to make sure that the *best* thing to do is to pay off that debt (or at least most of it). My husband always handled all of the money, and he left me last year. The worst part of it was that he left me in terrible shape financially. So I'm rebuilding my credit and learning how to live on a budget. And thanks to a good friend IRL and you guys on this board, I'm doing REALLY well!!

 

[mrodgers]

If that is the case right there, then you definitely should pay off the CC. Then start putting away for emergency use, 3-6 months of living expenses. Don't even think of all the house stuff before that happens.

 

[mom to minnie&mickey]

Debt is a killer, eating up your available income and not allowing you to build an emergency fund. Your cc balance is not reducing now because all you are paying is interest upon interest, leaving the principle balance (cost of things you purchased) untouched. PAY IT OFF ASAP! Cannot say it loud enough.
Put the other $500 in an account to start an emergency fund or add it to the one you have. With the double payments you were doing each month on the cc continue paying it but to yourself. In about 2 years or so you should have enough to start some reno's on your house by paying cash. You cannot do everything at once, anyways, your refund is not large enough to do big renovations debt free. You would only put yourself into more debt. Good luck.

 

[bethy]

Debt is a killer, eating up your available income and not allowing you to build an emergency fund. Your cc balance is not reducing now because all you are paying is interest upon interest, leaving the principle balance (cost of things you purchased) untouched. PAY IT OFF ASAP! Cannot say it loud enough.
Put the other $500 in an account to start an emergency fund or add it to the one you have. With the double payments you were doing each month on the cc continue paying it but to yourself. In about 2 years or so you should have enough to start some reno's on your house by paying cash. You cannot do everything at once, anyways, your refund is not large enough to do big renovations debt free. You would only put yourself into more debt. Good luck.

Perfect advice!!!

 

[firstcruise]

I agree with the poster above...with one addition and that is get in touch with your credit union or find one in your area that you can join and transfer the remaining portion of the balance to a much lower rate card. Pay the balance off as quickly as possible.

One bit of adivse for everyone..PAY YOURSELF FIRST! That means set up a savings account and fund it with every paycheck. Do not touch the money unless you have an emergency that requires the use of the money. Before long you will have enough saved so when those rainy days happen you will be prepared.

 

[pklein09]

In the Spring, I will be receiving $6500. I have lovely ideas for the money!!!! Here the nice techniques are given to use to earn the moneys. So don't miss it and catch to earn the money. These are really nice and amazing techniques.

reported

 

[bellarella]

In the Spring, I will be receiving $6500 (tax credit for buying my house). I have lovely ideas for the money!!!! I would like to take my daughters on a little vacation (nothing fancy, not Disney........), I would like to put in a master bathroom, I would like to fix my driveway and get the garage in good shape (paint, new door, etc.).

But then there's my debt. I'm in pretty good shape. But I have a credit card with a $6000 balance. I don't use the card anymore. I pay almost twice the minimum payment each month. But the interest is killing me, and it doesn't seem to go down like it should.

So WWYD? Pay off the card? Or live a little? Or fix up the house?

As others have stated, pay off the credit card. Not part of it, all of it. Once you do that, keep making the credit card payments, but to yourself!!!! Once you have 3-6 mos of expenses saved, then you can do the things you enjoy doing without worrying that you are going to go back into debt if something unexpected comes up.

To see why it's so important to pay off this debt all at once, try using this calculator. Run the numbers for how long it would take and how much interest you would pay if you made the minimum payment on your card, and then run it again with the larger amount you are paying. Once you see how much money will go into *your* account rather than the credit card company's it should be a really easy decisions

http://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx

 

[dzorn]

pay off debt.

Denise in MI

 

[4HppyCamprs]

Pay off the debt...It hurts because the return is long term and not immediately gratifying but you will be so happy to have that gone

 

[disneyofcourse]

In the Spring, I will be receiving $6500 (tax credit for buying my house). I have lovely ideas for the money!!!! I would like to take my daughters on a little vacation (nothing fancy, not Disney........), I would like to put in a master bathroom, I would like to fix my driveway and get the garage in good shape (paint, new door, etc.).

But then there's my debt. I'm in pretty good shape. But I have a credit card with a $6000 balance. I don't use the card anymore. I pay almost twice the minimum payment each month. But the interest is killing me, and it doesn't seem to go down like it should.

So WWYD? Pay off the card? Or live a little? Or fix up the house?

I will say right now you probably can't add a master bath, take a vacation, fix a driveway and get a garage door, paint the garage etc for $6500.
You should be paying off the credit card before any of those things. I consider the things you want to do as "wants". You "Need" to pay of money owed first in my opinion. I would pay the full credit card and put $150 towards something fun like going to the theme park for a day, short road trip with an overnight stay or zoo etc. Then take whats left and put it into an emergency fund.

After all that is done I would start putting whatever you are now putting towards paying off the credit card into a savings fund and within a year or two you should be able to do one project! Just do things one at a time and don't go into debt like some home owners do just biting off to much in projects and home improvements.

You'll feel so much better not having that debt!

 

[KKB]

3 years of grad school (both of us) socked it to us...but you will LOVE the feeling that comes with being debt-free--and NOT paying interest. Assuming you are paying 12%+ interest--you cannot make that much interest on the money if you put it away!
Pay it off, breathe a sigh of relief then start building up your cash reserve. All the things you mention are "nice" but NOT necessary.
DO treat yourself to a little something that you have wanted for a while (a great sweater, maybe a Nook or iTouch for a bit of a splurge)--you don't want to feel the urge to max that card out again!

 

[snowywhite89]

In the Spring, I will be receiving $6500 (tax credit for buying my house). I have lovely ideas for the money!!!! I would like to take my daughters on a little vacation (nothing fancy, not Disney........), I would like to put in a master bathroom, I would like to fix my driveway and get the garage in good shape (paint, new door, etc.).

But then there's my debt. I'm in pretty good shape. But I have a credit card with a $6000 balance. I don't use the card anymore. I pay almost twice the minimum payment each month. But the interest is killing me, and it doesn't seem to go down like it should.

So WWYD? Pay off the card? Or live a little? Or fix up the house?

Pay off the card. Put the same remaining amount into your emergency fund.

 

[scootch]

Absolutely pay off debt. Because we are debt free, we have been able to do so much... so in time, paying off that debt will get you a vaca or a fixer up. Quit paying that interest(just my opinion of course )