Budget: WWMMD?

[grey56]

I owe ~$3K on my car until it's paid off.  Currently, I pay $263/mo. so it will be paid off in about a year. 

We are going to be getting $5K back from the daycare FSA thing as soon as I file that paperwork.  Would you pay off the car with part of that, or would you continue with the payment plan?

We also have:
CC1: $4K at 0%, we pay $250/mo., the 0% goes up when the balance will be $1K (at which point we'd just pay it off)
CC2: $1K at 0%, we pay $56/mo., will be paid off 8/2014 before the 0% goes up
DH's car: $8K, we pay $380/mo., will be paid off by end-of-year 2015

Would you pay off anything else?  Maybe put $1K to CC1? 

Or should we be putting it all in savings?  We budgeted for the year as if we didn't have this money so I am looking at it as a "bonus" and I'd like to make a good decision with what to do with it.

We have ~$10K in savings now (we add $500/mo.).  I have ~$90K in my 401k, DH has ~$50K in his.  Both of our jobs are very stable but obviously anything could happen.  (Not sure if you need this info, but I see it in the other budget posts.)

Thanks!

[fuddyduddy]

What are the interest rates on your car loans?

[grey56]

Jan 22, 2013 7:35:04 GMT -5 fuddyduddy said:

What are the interest rates on your car loans?

It's bad, but I don't know this.  I will look into it. 

[aspentosh]

Jan 22, 2013 7:41:48 GMT -5 @songforyou said:

What's the interest rate on your car? How many months of living expenses is the $10K for you? Does the retirement only include 401K plans or are those also IRAs? Do you qualify for and/or have Roths?

I'm leaning toward paying off the car, the 2nd CC (which I know will/should be an unpopular opinion since you have roughly 6 more months at 0%, but it just sounds like a nusiance to me) and putting 1K toward the 1st CC, so that's paid off before the 0% expires. That will free up another $320 with which you can pad your savings. If you have Roths that aren't funded yet, my answer may change.

Pretty much this exactly.

Interest rates are key right now, but I do like the idea of getting rid of CC2 and reducing CC1 some.

[grey56]

Jan 22, 2013 7:41:48 GMT -5 @songforyou said:

What's the interest rate on your car? How many months of living expenses is the $10K for you? Does the retirement only include 401K plans or are those also IRAs? Do you qualify for and/or have Roths?

I'm leaning toward paying off the car, the 2nd CC (which I know will/should be an unpopular opinion since you have roughly 6 more months at 0%, but it just sounds like a nusiance to me) and putting 1K toward the 1st CC, so that's paid off before the 0% expires. That will free up another $320 with which you can pad your savings. If you have Roths that aren't funded yet, my answer may change.

That is two months' of expenses. 

Retirement is only the 401ks.  I know nothing about IRAs or Roths, etc.  I will do some research.

I made an error in my original post, CC2 will be paid off 8/2014 not 8/2013.  Will edit. 

[Deleted]

Pay off your car, and then take $263 / mo and invest it - either in a Roth IRA or other retirement account OR in a general investment account.

With the extra $2k (left over after you pay off your car), get rid of CC 2, and make a dent in CC1, so you will have it fully paid off before the 0% ends.

[grey56]

I am on my company's intranet and it looks like I can contribute to a Roth 401k directly. I will talk to my DH about this and see if his company has something similar (my company is larger and I've worked here longer than his/he has). Thank for for the direction.

[Deleted]

Personally, I'd pay off the 2 credit cards and then apply that $306 in payments to the car loans until they were both gone. Then you'll have almost 1K to dump into savings each month.

[mollz007]

I would pay off the car and then use the rest of the money to pay down CC1.

[Deleted]

Jan 22, 2013 10:57:07 GMT -5 flygirl said:

Personally, I'd pay off the 2 credit cards and then apply that $306 in payments to the car loans until they were both gone. Then you'll have almost 1K to dump into savings each month.

Well said.  Agree, agree.  I am a big fan of re-applying "loan" or other recurring payments when they go away.  helps ensure the money is put to good use versus just evaporating on day-to-day junk.

[Roc A Bee]

I would pay off the ccs then apply that $300 to Roth IRAs for both of you.