What would you do?

[Duckyiam71]

We are moving to Germany with the military. We have lived in a home for 7 years that basically the military(housing allowance) has paid the mortgage. We are selling our house and will have roughly $45k walking away from the sale. So would you A) pay off all debt which is one car and one credit card or B) put into retirement accounts. My DH and I are debating...I say payoff all debt and have no debt!! Just some opinions. Thanks for your input!

 

[threeblessings]

Depends on the interest rates, terms of the loan and amounts of the debt. I would pay off the credit card immediately, though, assuming you have a variable interest rate that is high.

With the return on investments right now, I would pay off debt if I had money. But it would also depend on how much is saved for emergency, retirement, etc.

 

[threeblessings]

I think that if you pay the debt off and then take the money that you have been paying monthly to the car and credit card and put that into retirement, you will be in the best situation.

 

[Duckyiam71]

I think that if you pay the debt off and then take the money that you have been paying monthly to the car and credit card and put that into retirement, you will be in the best situation.

This is what I am thinking too. My DH is just being aggressive with the retirement fund. Technically he retires from the military in 4 years and he is anxious about getting a job.

 

[fakereadhed]

We are moving to Germany with the military. We have lived in a home for 7 years that basically the military(housing allowance) has paid the mortgage. We are selling our house and will have roughly $45k walking away from the sale. So would you A) pay off all debt which is one car and one credit card or B) put into retirement accounts. My DH and I are debating...I say payoff all debt and have no debt!! Just some opinions. Thanks for your input!

Why not do both? Depends on how much you owe and interest rates and years to retirement. But you could put some toward debt and some toward retirement if it makes sense in your situation.

 

[dickyrader]

I would pay off the debt first. Then use the extra money that you have from having no debt to invest. Just think how much money you will have if you have no payments! You will have a lot of extra money to use to do things you want, plus be able to invest in different ways to prepare for retirment. Just make sure that you make it a priority to set aside x amount of dollars to go towards investing each month or two weeks or however you get paid.

Awesome that you are getting a large lump sum! Exciting!

 

[tigger51276]

I know what a huge sigh of relief I felt and immense happiness when i sent in my last car payment earlier this year. I can't imagine the jubilation over having no debt! i say pay it off and start putting money into a retirement fund each month.

 

[richmond282]

I think that if you pay the debt off and then take the money that you have been paying monthly to the car and credit card and put that into retirement, you will be in the best situation.

THIS!!! Good luck!

 

[Duckyiam71]

Thanks everyone!! I appreciate your input. We have been crunching numbers and will be able to pay off all debt and still have some to put in retirement. We have been on the right path for years, saving and being frugal. Now we will be able to move to Germany completely debt free. This is a huge relief!

 

[cm8]

Thanks everyone!! I appreciate your input. We have been crunching numbers and will be able to pay off all debt and still have some to put in retirement. We have been on the right path for years, saving and being frugal. Now we will be able to move to Germany completely debt free. This is a huge relief!

WTG!

 

[uk_wildcat]

Definitely pay off the debt. You will also be getting a little extra $ while in Germany(COLA), so you can take that and dump it into retirement if you want. It is much easier to stay out of debt while in Germany, so once you get it paid off you won't have to worry about adding any to it.

 

[disneymarie]

I think that if you pay the debt off and then take the money that you have been paying monthly to the car and credit card and put that into retirement, you will be in the best situation.

I agree, sounds like a great plan. There are many tax free accounts that will return some $ back to you in interest too. I don't know your age, but Vanguard has a target account, or lifetime something. I have been reading on them.

The thing with a house sale is the windfall tax thing if you do not turn it into another home purchase.

 

[a1tinkfans]

We are moving to Germany with the military. We have lived in a home for 7 years that basically the military(housing allowance) has paid the mortgage. We are selling our house and will have roughly $45k walking away from the sale. So would you A) pay off all debt which is one car and one credit card or B) put into retirement accounts. My DH and I are debating...I say payoff all debt and have no debt!! Just some opinions. Thanks for your input!

If you have no back up saved, I would save the bulk of it...If back up is saved, Id pay down the cc and add a bit Xtra on the car payment, but put most of it in something to Make more $$
Good Luck on your Move!

AND
THANK YOU for your families SACRIFICES for this Great Country!

 

[Kycha]

What happens to your car while you are in Germany? Are you taking it with you?

 

[mom2val]

I think that if you pay the debt off and then take the money that you have been paying monthly to the car and credit card and put that into retirement, you will be in the best situation.

This is EXACTLY what I would do.The kicker is you must actaully put the extra money each month into the retirement account!

 

[esk]

You're going to need at least $5,000 for your PCS --- I've done 2 Germany tours and you just bleed money when you first get there. Even when you get settled, you're going to want to buy a German vacuum and toaster and hair dryer and that stuff adds up. Not to mention an AFN box or Sky satellite (totally recommend!) and snow tires for the car because they are required by law.

COLA is nice, but if you plan to experience Europe and see stuff, you may spend all that. I would pay off the debt and squirrel the rest away for retirement.

But do put $5K away for the PCS in and $5K for the PCS out, so you have it handy when you need it. Have a great time, so jealous!

 

[scrapquitler]

I think that the idea of being debt free is great, but you might want to wait a few months and see what happens when you get there before you use up all that money...like another poster said, there are going to be expenses you won't anticipate with moving (like the appliances previously mentioned).

Another thought: how long are you going to be there? I think you might want to make sure you keep some of the money ($5-$10K?) in a separate fairly liquid account for when you move back to the US after the tour is over. Once you come back to the US (assuming that will happen), you'll need a new vehicle, security/downpayment/first and last months rent, etc to reestablish yourselves here, and it will be easier if you have ready cash available at that point. Would be easier to set that aside now than scramble to come up with it upon your return.