Impish Posted June 14, 2012 Share Posted June 14, 2012 Not getting into details, but it looks like I should be receiving a fairly good chunk of change shortly. Not enough to go out and pay for a house or a private island somewhere, but nice all the same, kwim? Wolf and I are disagreeing on what to do. *I* think that we stick it into the bank, look into shortish term investments, and leave it alone. If he gets the job promo, we'll be able to get rid of all our debt in the next 18 mths, so we wouldn't *need* this windfall for that. He wants to buy a new(er) vehicle. We're just buying a 2nd older van from his boss that will save us $$$ in gas, so we'll have 2 mini vans that are large enough to hold us. The tranny in our current van is going, so having a 2nd van is a big relief...and frankly, for what the guy is asking for it, we'd be idiots NOT to do it. I just don't see the need to get rid of our current van, and get another vehicle. He wants a 9 seater w/towing capacity. For what?! We don't tow anything! His argument is, well , that's cause we can't! If we did, we could rent a trailer for when we go camping, etc. Except we won't *all* be going camping for min another yr, b/c neither of us is keen on taking Boo camping. Honestly, I think this is a matter of he'd like a newer vehicle and he can be impulsive when it comes to $. I'm extremely more cautious, which is why I'm the one stuck doing the bills :lol: But...at the same time...I don't drive, so unless a vehicle is deader than the proverbial doornail, I don't see the advantage of replacing it. Soooo...vote. WWYD Quote Link to comment Share on other sites More sharing options...
Bang!Zoom! Posted June 14, 2012 Share Posted June 14, 2012 You are a young family, this season is about building assets, not taking on liabilities. If it doesn't appreciate, don't do it. I'm with you, invest it safely for the future. Quote Link to comment Share on other sites More sharing options...
athena1277 Posted June 14, 2012 Share Posted June 14, 2012 Other. Pay off the debts now. It will save you on interest in the long term and you can save or buy a van if he gets the promotion. Quote Link to comment Share on other sites More sharing options...
Guest Posted June 14, 2012 Share Posted June 14, 2012 Other. Pay off the debts now. It will save you on interest in the long term and you can save or buy a van if he gets the promotion. :iagree: That is what I would do. Quote Link to comment Share on other sites More sharing options...
catz Posted June 14, 2012 Share Posted June 14, 2012 Other. Pay off the debts now. It will save you on interest in the long term and you can save or buy a van if he gets the promotion. :iagree: I tend to agree with this line of thinking. A rate of return on short term investments are not likely to be greater than interest paid on a debt. If you can find something that would return signicantly more percentage wise, then perhaps look at the investment. Quote Link to comment Share on other sites More sharing options...
tntgoodwin Posted June 14, 2012 Share Posted June 14, 2012 Other. Pay off the debts now. It will save you on interest in the long term and you can save or buy a van if he gets the promotion. :iagree: Quote Link to comment Share on other sites More sharing options...
Impish Posted June 14, 2012 Author Share Posted June 14, 2012 Reason I was going to invest rather than pay off debt is b/c if we were going to end up buying a house, this would (combined w/our current savings) enable us to put down a nice downpayment. Quote Link to comment Share on other sites More sharing options...
I.Dup. Posted June 14, 2012 Share Posted June 14, 2012 Send some to me? Did you see my thread about my 7yo breaking our sliding glass door and the $300 repair needed? :tongue_smilie::lol: Quote Link to comment Share on other sites More sharing options...
Impish Posted June 14, 2012 Author Share Posted June 14, 2012 Send some to me? Did you see my thread about my 7yo breaking our sliding glass door and the $300 repair needed? :tongue_smilie::lol: :lol: Quote Link to comment Share on other sites More sharing options...
swellmomma Posted June 14, 2012 Share Posted June 14, 2012 I say the 2nd van but nothing overly fancy. Just a safe vehicle to get around. I would have said save/invest before xmas but them my tranny went and having a new vehicle before that happens is a better option. I thought I could squeak another 6 months out of the van and then get it fixed, but it blew before that. A safe vehicle to get everyone around, especially when you are in a small town is vital imo. Buying a house is nice BUT if you can cover your debts on your own with his promo, and buy a "new" vehicle now you will be further ahead then if you used it for a down payment, and then still had the debts and no vehicle kwim. Quote Link to comment Share on other sites More sharing options...
VA6336 Posted June 14, 2012 Share Posted June 14, 2012 I voted other. You don't drive, so it doesn't make any kind of sense to have two vehicles. If you know the old van will need a new transmission soon, and the cost of the new vehicle isn't all that much more than the cost of the new transmission + labor it does make sense to me to go ahead and buy the newer van from the boss, but only if you sell the old one and get a little bit for it. However, if he does get the promotion it might make more sense to just save the money for now. That way, you can save as much as possible until the old van dies (or needs more repair $ than it would cost to buy another vehicle) and when it does, you'll have less debt and he can have the fun of picking out the new-to-you vehicle. My dh is a spender, he hates having to buy the bare minimum product when something for just a little bit more would get him bells and whistles that he really wants. We struggle with that, let's just say. :D So it might be a nice compromise for you to save it now, wait on the promotion and if he gets it, he also gets to buy a vehicle (within a budget, of course). Quote Link to comment Share on other sites More sharing options...
Impish Posted June 14, 2012 Author Share Posted June 14, 2012 I say the 2nd van but nothing overly fancy. Just a safe vehicle to get around. I would have said save/invest before xmas but them my tranny went and having a new vehicle before that happens is a better option. I thought I could squeak another 6 months out of the van and then get it fixed, but it blew before that. A safe vehicle to get everyone around, especially when you are in a small town is vital imo. Buying a house is nice BUT if you can cover your debts on your own with his promo, and buy a "new" vehicle now you will be further ahead then if you used it for a down payment, and then still had the debts and no vehicle kwim. We're getting the 2nd van already. It's like $500. Wolf wants to replace our current van w/something new(er). So we'll still have 2 vehicles. Quote Link to comment Share on other sites More sharing options...
Night Elf Posted June 14, 2012 Share Posted June 14, 2012 I vote for saving, or at the very least, take a small amount to buy something fun for the family. It sounds like he has an eye for something shiny new. Now, if your vehicle was really on its last leg, I would understand wanting to get another one. Technically, the money will still be there if something catastrophic happens to your van and needs to be replaced. Wait, you don't drive and he's already getting a second van? Yep, it sounds like he has a case of the "I Wants". I really like the idea of increasing your savings towards that down payment for a house. I know you've talked about that before. Quote Link to comment Share on other sites More sharing options...
QuirkyKapers Posted June 14, 2012 Share Posted June 14, 2012 I would pay of debt. Quote Link to comment Share on other sites More sharing options...
Impish Posted June 14, 2012 Author Share Posted June 14, 2012 I vote for saving, or at the very least, take a small amount to buy something fun for the family. It sounds like he has an eye for something shiny new. Now, if your vehicle was really on its last leg, I would understand wanting to get another one. Technically, the money will still be there if something catastrophic happens to your van and needs to be replaced. Wait, you don't drive and he's already getting a second van? Yep, it sounds like he has a case of the "I Wants". I really like the idea of increasing your savings towards that down payment for a house. I know you've talked about that before. The 2nd van is in better shape than our current one, and a 4 cyl vs 6 cyl, so way better on gas. That, and the price just made it a no brainer. Quote Link to comment Share on other sites More sharing options...
swellmomma Posted June 14, 2012 Share Posted June 14, 2012 We're getting the 2nd van already. It's like $500. Wolf wants to replace our current van w/something new(er). So we'll still have 2 vehicles. Ahh I see I misunderstood. In that case definitely save the $$ Quote Link to comment Share on other sites More sharing options...
Soror Posted June 14, 2012 Share Posted June 14, 2012 Assuming you have a $1k starter fund I would pay off all debts and then past that I'd save the rest for a bigger efund. Quote Link to comment Share on other sites More sharing options...
cottonmama Posted June 14, 2012 Share Posted June 14, 2012 (edited) Do you have a fully funded emergency fund? If not, I would use both the windfall and the promotion to (1) pay off debt, and (2) save up the emergency fund (the goal should be 6 months' expenses). If there's not enough to do both, I'd make sure you reserved $1000 for emergencies and put the rest towards the debt, and work on the emergency fund with anything that's left. If there's money left over after that, I would put most or all of it towards a down payment for a house and/or a fund to help you get a new van if/when you NEED one. Edited June 14, 2012 by cottonmama Quote Link to comment Share on other sites More sharing options...
kricau Posted June 14, 2012 Share Posted June 14, 2012 Totally off the subject, but just had to ask :) Are those your dc's real names??? LOL Quote Link to comment Share on other sites More sharing options...
ma23peas Posted June 14, 2012 Share Posted June 14, 2012 Wolf and I are disagreeing on what to do. * Soooo...vote. WWYD Well, I traded in our 'tow' vehicle for a Prius, we had the Tundra and never towed nything...plus gas is so outrageous you would guzzle it with a bigger van..and believe me, gas will hit $5 a gallon and that van will become a thorn in your side. I would pay off debt...then make a plan to save for something fun! :) Quote Link to comment Share on other sites More sharing options...
AuntieM Posted June 14, 2012 Share Posted June 14, 2012 Step 1 - $1000 cash emergency fund Step 2 - pay off all debts except the mortgage Step 3 - establish an emergency fund containing an amount to cover between 3 and 6 months of living expenses (on the higher side if you have a few kids, lack insurance or have chronic medical issues) This is a sequence that has a great track record for success... (fwiw I do sometimes disagree w/Dave on the order of the remaining baby steps) Quote Link to comment Share on other sites More sharing options...
phathui5 Posted June 14, 2012 Share Posted June 14, 2012 Do you already have an emergency fund in place? Quote Link to comment Share on other sites More sharing options...
Lolly Posted June 15, 2012 Share Posted June 15, 2012 Step 1 - $1000 cash emergency fund Step 2 - pay off all debts except the mortgage Step 3 - establish an emergency fund containing an amount to cover between 3 and 6 months of living expenses (on the higher side if you have a few kids, lack insurance or have chronic medical issues) This is a sequence that has a great track record for success... (fwiw I do sometimes disagree w/Dave on the order of the remaining baby steps) :iagree: For me, the except the mortgage does not include GETTING a mortgage. I would put that off until after you have reached step 3. Quote Link to comment Share on other sites More sharing options...
Ottakee Posted June 15, 2012 Share Posted June 15, 2012 Our plan for money like that (extra above and beyond our typical income) is 10% tithe or missionary, etc 10% spend on something fun that we want--vacation, new horse saddle (my next dream), day out, etc. 80% save for larger expenses---emergency fund, retirement, next vehicle fund, etc. We have no debt currently. I would not get another vehicle if you have 2 of them and only 1 driver. Besides the costs of the newer vehicle you would have in increase in car tags/plates and insurance rates. It is nice though to use that 10% just for fun or something we really want but isn't a bare bones need. Makes it a lot easier to save that other 80%. Quote Link to comment Share on other sites More sharing options...
annandatje Posted June 15, 2012 Share Posted June 15, 2012 The rate on short term liquid investments most likely would be lower than the interest payment on debts. Get rid of all debt first. Quote Link to comment Share on other sites More sharing options...
Impish Posted June 15, 2012 Author Share Posted June 15, 2012 Totally off the subject, but just had to ask :) Are those your dc's real names??? LOL No, they aren't :lol: Dave Ramsey is a bit off, # wise, for Canadians. $1000 savings would barely cover our rent and insurance (auto and house content) for the month, not anything else. That being said, we do have enough in savings for either a dwn payment or several mths of expenses. Either or, of course. and, being Canadian, we don't have to worry about health care expenses. Quote Link to comment Share on other sites More sharing options...
AuntieM Posted June 15, 2012 Share Posted June 15, 2012 No, they aren't :lol: Dave Ramsey is a bit off, # wise, for Canadians. $1000 savings would barely cover our rent and insurance (auto and house content) for the month, not anything else. That being said, we do have enough in savings for either a dwn payment or several mths of expenses. Either or, of course. and, being Canadian, we don't have to worry about health care expenses. Is there a Canadian adjusted DR plan? Mostly just curious. So you have step 1 and step 3 covered. Step 2....? FWIW I have a class right now with a couple who tried to do things out of order. Coincidentally, they decided to invest prior to paying off debt. They are in the class now because, in their own words, "We really messed up by not paying off the debt first. Now we are farther in debt and have no extra cash flow to utilize the debt snowball plan. We are actually going to have to eat peanut butter and tuna for the next few months to start working our way out of the hole." Just sayin.... Another question just because I'm curious... Does the CA healthcare system in any way cover the cost of childcare and lost wages, or just the actual medical services in an acute situation (and it's aftermath)? Quote Link to comment Share on other sites More sharing options...
Mommyof4ks Posted June 15, 2012 Share Posted June 15, 2012 Since you have 2 vehicles and only one driver I would not get another vehicle right now. I would be sure to have 3-6 months of living expenses saved up and pay off all debts with the remainder if there is enough left. If you have no debt, then saving for a downpayment will be easy, and you will have nothing holding you back from getting a mortgage when you have enough for a down payment. Once the downpayment is finished, then take the money you were putting toward that and invest it. Quote Link to comment Share on other sites More sharing options...
justamouse Posted June 15, 2012 Share Posted June 15, 2012 Get out the bills for the debt, crunch the #s and see how much interest you're going to be paying while you wait to pay it off. If that doesn't give you agita (heartburn), sock it away for a bit, just until you can come to a decsion. Don't let it burn a hole in your pocket either way. Congratulations, btw! Quote Link to comment Share on other sites More sharing options...
nukeswife Posted June 15, 2012 Share Posted June 15, 2012 I agree with those that said payoff the debt. I just don't see any short term investments paying off enough to make it worth it. I'm familiar with DR, but don't know much about his full plan. I can tell you that a $1000 wouldn't get us far at all, that would only cover half of a months rent for us. Quote Link to comment Share on other sites More sharing options...
Impish Posted June 15, 2012 Author Share Posted June 15, 2012 Is there a Canadian adjusted DR plan? Mostly just curious. So you have step 1 and step 3 covered. Step 2....? FWIW I have a class right now with a couple who tried to do things out of order. Coincidentally, they decided to invest prior to paying off debt. They are in the class now because, in their own words, "We really messed up by not paying off the debt first. Now we are farther in debt and have no extra cash flow to utilize the debt snowball plan. We are actually going to have to eat peanut butter and tuna for the next few months to start working our way out of the hole." Just sayin.... Another question just because I'm curious... Does the CA healthcare system in any way cover the cost of childcare and lost wages, or just the actual medical services in an acute situation (and it's aftermath)? I don't know of any DR that's adjusted for Canadians. EI (Employment Insurance) covers lost wages in acute medical situations, as does insurance that Wolf pays into at work. If it's a work injury (as mine is) then WCB kicks in. If Wolf had to take time off b/c of my health, he'd get either EI or WCB would have to pay him, or they'd cover daycare costs. Quote Link to comment Share on other sites More sharing options...
Soror Posted June 15, 2012 Share Posted June 15, 2012 (edited) The point of the $1k is not that it will cover all your bills but for little emergencies, ie a car repair, appliance repairs, house and misc crap etc. To help prevent those little things from preventing you from saving and paying off the debt, then to build a larger fund after the debts are paid. For most/many people if they try to save up a large efund before paying off debt then it will never get done and interest will continue to accrue. I'm not a total Ramsey cool-aid drinker though. I just read his book in the last year and we've been debt free but the house for many years, but I like his basic framework and a lot of his ideas. I think there are many ways to financial "wellness" but I think debt is the devil! Edited June 15, 2012 by soror Quote Link to comment Share on other sites More sharing options...
Soror Posted June 15, 2012 Share Posted June 15, 2012 dp Quote Link to comment Share on other sites More sharing options...
HSMom2One Posted June 15, 2012 Share Posted June 15, 2012 I say the 2nd van but nothing overly fancy. Just a safe vehicle to get around. I would have said save/invest before xmas but them my tranny went and having a new vehicle before that happens is a better option. I thought I could squeak another 6 months out of the van and then get it fixed, but it blew before that. A safe vehicle to get everyone around, especially when you are in a small town is vital imo. Buying a house is nice BUT if you can cover your debts on your own with his promo, and buy a "new" vehicle now you will be further ahead then if you used it for a down payment, and then still had the debts and no vehicle kwim. Well, you can't get to work to earn money without good transportation. You can't get medical care without a vehicle or buy groceries to feed the family unless you have something to truck it all home. Unless you live in an urban setting and can take public transportation, having a reliable car is a necessary evil. I would personally make sure that is in place before anything else because too much depends on it. And I don't mean set yourself up with car payments. I'd say find the best vehicle possible for the least amount of money and pay cash. Put the rest in the bank. Blessings, Lucinda Quote Link to comment Share on other sites More sharing options...
MamaAkins Posted June 15, 2012 Share Posted June 15, 2012 Other. Pay off the debts now. It will save you on interest in the long term and you can save or buy a van if he gets the promotion. :iagree: Quote Link to comment Share on other sites More sharing options...
LucyStoner Posted June 15, 2012 Share Posted June 15, 2012 (edited) If you only have 1 driver, I would not see any reason at all to buy him another car. :confused: You should have some towing capacity on the minivan- not a massive amount, but we have done a small tent trailer on a family minivan and it is fine. Spend a few hundred on a tow hitch for your new minivan. You have a family of 6 so a 9 passenger is not needed and the extra gas cost is not pennies. If you are not going to be able to save up the same amount if you use it to pay off your short term debt, then I would totally save this. Build a nest egg. If you both can be counted on to save up all of the money that is currently going to debt, then pay off all that debt and feel 2500 pounds lighter. :001_smile: Then save up that same amount as fast as you can. Edited June 15, 2012 by kijipt Quote Link to comment Share on other sites More sharing options...
Denisemomof4 Posted June 15, 2012 Share Posted June 15, 2012 I say to save the money until you are more confident with your decision. Also consider that you really don't want to move into a house with already outstanding debt if the mortgage is going to stretch you in any way at all. Our realtor made a 10k error when we bought our house 16 years ago. We paid off all our debt but moved i to our house with no savings at all. That was scary!!! Quote Link to comment Share on other sites More sharing options...
Firestar Academy Posted June 15, 2012 Share Posted June 15, 2012 :iagree: I tend to agree with this line of thinking. A rate of return on short term investments are not likely to be greater than interest paid on a debt. If you can find something that would return signicantly more percentage wise, then perhaps look at the investment. :iagree: I voted other. You don't drive, so it doesn't make any kind of sense to have two vehicles. . :iagree: Do you have a fully funded emergency fund? If not, I would use both the windfall and the promotion to (1) pay off debt, and (2) save up the emergency fund (the goal should be 6 months' expenses). If there's not enough to do both, I'd make sure you reserved $1000 for emergencies and put the rest towards the debt, and work on the emergency fund with anything that's left. If there's money left over after that, I would put most or all of it towards a down payment for a house and/or a fund to help you get a new van if/when you NEED one. :iagree: robin Quote Link to comment Share on other sites More sharing options...
AvasMom Posted June 15, 2012 Share Posted June 15, 2012 You are a young family, this season is about building assets, not taking on liabilities. If it doesn't appreciate, don't do it. I'm with you, invest it safely for the future. :iagree: Unless the vehicles are ready to drop dead any moment your priorities should be saving and getting rid of debt. Quote Link to comment Share on other sites More sharing options...
Catwoman Posted June 15, 2012 Share Posted June 15, 2012 :iagree: I tend to agree with this line of thinking. A rate of return on short term investments are not likely to be greater than interest paid on a debt. If you can find something that would return signicantly more percentage wise, then perhaps look at the investment. :iagree: It's all about the percentages. Pay off anything that costs you more than you can make in interest on the same money. And don't even consider buying a house until your other debts are paid off, you have money for a solid downpayment, and several months worth of money to live on (including paying your mortgage) in case of an emergency. Quote Link to comment Share on other sites More sharing options...
Impish Posted June 15, 2012 Author Share Posted June 15, 2012 There's something about being debt free that doesn't make mortgage cos happy. I'm trying to remember exactly what it is...something about having unused credit can actually make you more of a risk, b/c they're available to get you in to trouble or some such nonsense. I *do* know that they don't want to see more than 75% of your available credit used, something like that. The path to a mortgage is apparently different here than in the US. I never even had a credit card til a cpl of yrs ago. I was told, flat out, that unless I had a credit history, we'd NEVER get a mortgage. So, had to acquire debt to prove I'm a good credit risk. *eyeroll* And paying it off every month does me no good either. So, I've been carefully building the credit score. I need to talk to the mortgage broker again and get some clarification on things. I know a Cdn version of DR warns ppl NOT to cut up their cards as soon as they're pd off, to let them sit for a yr or so first b/c canceling cards can be a negative hit on the credit score. Quote Link to comment Share on other sites More sharing options...
lisamarie Posted June 15, 2012 Share Posted June 15, 2012 There's something about being debt free that doesn't make mortgage cos happy. I'm trying to remember exactly what it is...something about having unused credit can actually make you more of a risk, b/c they're available to get you in to trouble or some such nonsense. I *do* know that they don't want to see more than 75% of your available credit used, something like that. The path to a mortgage is apparently different here than in the US. I never even had a credit card til a cpl of yrs ago. I was told, flat out, that unless I had a credit history, we'd NEVER get a mortgage. So, had to acquire debt to prove I'm a good credit risk. *eyeroll* And paying it off every month does me no good either. So, I've been carefully building the credit score. I need to talk to the mortgage broker again and get some clarification on things. I know a Cdn version of DR warns ppl NOT to cut up their cards as soon as they're pd off, to let them sit for a yr or so first b/c canceling cards can be a negative hit on the credit score. That's really interesting the differences between the US and Canada in terms of credit. DH and I have great credit and we pay off our cc bills every month, are always on time with all our bills, etc. I would put the money in the bank and save it for when you actually need a new vehicle. Right now you don't, but in a few years you will, and you'll be glad for the money then. Quote Link to comment Share on other sites More sharing options...
Lolly Posted June 15, 2012 Share Posted June 15, 2012 No, they aren't :lol: Dave Ramsey is a bit off, # wise, for Canadians. $1000 savings would barely cover our rent and insurance (auto and house content) for the month, not anything else. That being said, we do have enough in savings for either a dwn payment or several mths of expenses. Either or, of course. and, being Canadian, we don't have to worry about health care expenses. The thousand isn't for covering rent and insurance. That is the 3-6 mth fund. Me, I prefer a year fund minimum but realize it isn't possible for everyone. The thousand is just to cover those expenses that pop up on you. Oops, ds outgrew his shoes before he was supposed to! Drat, the ice maker broke and flooded the kitchen. That type of thing. As far as credit rating goes, it sounds like they figure it the same way in the US. The thing is that paying off debts doesn't go against you. They like to see that. Borrow and pay it off. That is what gives a good credit rating. DR doesn't like that. He is bucking the system. If you have a good rating, it isn't just going to go away. If not having debt scares you, pay it down to a minimum and leave just a little. Have that amount in the bank ready to pay it off as soon as the house loan goes through. Don't just keep the debt. Quote Link to comment Share on other sites More sharing options...
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