wwyd: baby on the way

[soozy87]

I would put most of it towards the debt and save the rest just in case.

[Deleted]

I would put all of your excess towards the CC. Then beef up e-fund to 6 months expenses and then pay off the car.

[zacksbride]

hard to say without knowing specifics on interest rates and exact amounts of debt.  also, i am having a hard time following exactly how much you have extra per month after expenses and how much in an efund.  a budget with things clearly listed line by line would be helpful. 

[Deleted]

If a budget is helpful, here you go:

Total income (w/o 3 week paychecks): $9400 ($4900 from DH, $2900 me, $1600 rental property)
- Includes paychecks from DH and myself, rental income
- Includes 5% 401 contribution for me (plus I get a 5% match), 3% for DH (+ 3% match and 12% company stock), DC FSA maxing out at $5k/yr ($208/paycheck) and health insurance

Total bills post-day care: $7003 (all inclusive)
- Includes day care (starting in Sept 2012)
- Includes baby expenses ($200/mo)

Total bills pre-day care: $6813

I will lose $200-300/month, on average, for each month on maternity leave (total 25 weeks, March - August, dates are obviously somewhat flexible but I'm due mid March). Assuming $300/mo, our income will drop down to approx $9000/month during the mat leave period. I don't budget down to zero, as there are always things that seem to come up.

Car: $10k balance, 3.75%
CC 1: $4.5k balance, 9.9%
CC 2: $1.4k balance, 10.5%
CC3: $4.9 balance, 13.3%

We also have a shit ton in student loans but am not concerned about those right now for various reasons... payments are about $900/month on approx $95k balance. Interest rates are low, I look at them as an investment, and I have a family trust inheritance that will pay them off. We also have a $200k mortgage at 3.875%, payments are $994/month. Rental income brings in $1600, which is more than enough to cover the taxes, HOA, and payment.

Bare bones e-fund is about $5600/month, assuming I could put the SLs on deferment. As you can see, DH's salary + rental property would cover it. If DH lost his job during my mat leave, we'd be short, on average, $400/mo. But that would likely mean me going back to work full time earlier rather than later.... many possible scenarios. 

[zacksbride]

Jan 31, 2013 18:09:20 GMT -5 @akswartz85 said:

Car: $10k balance, 3.75%
CC 1: $4.5k balance, 9.9%
CC 2: $1.4k balance, 10.5%
CC3: $4.9 balance, 13.3%

since efund is at $8500, i would focus on credit card debt.  i would snowball to get the cc paid off - start with paying off cc #2 entirely next month, then focus on #3 and last #1.  I wouldn't go crazy on paying down the car until my efund was at least 3 months bare bones expenses - which sounds like about 17K?

[Roc A Bee]

I'd snowball the cc debt and let the car payment ride.

[Deleted]

So right now you have around $2500 a month leftover each month? What are you doing with that money?

If that's the case and you can cut back enough (which may be hard if you're currently spending it), I'd pay off the CC for the next 4 months and then save the rest. I wouldn't bother with the car loan for now.

[ellipses84]

I would keep enough in your e-fund to supplement your income while on maternity leave, for a bare bones, worst case scenario. Anything over that, I would use to pay off the credit cards, starting with the highest interest rate.

We saved as much as we could before my maternity leave because I had a drastically reduced income, and we were actually under budget every month because I didn't need as much gas money, eating out lunch money, etc. It was when I went back to work and had to pay back insurance premiums and pay for daycare that we really struggled with our budget.

[SJ]

Jan 31, 2013 22:10:16 GMT -5 Roc A Bee said:

I'd snowball the cc debt and let the car payment ride.

I agree. I wouldn't worry at all about the car loan, but would try to pay off those credit cards ASAP.

[aspentosh]

Another vote for snowball credit cards and leave the car payment alone.

[makingithappen]

Are you in the US?

Eta: I ask because, if so, I have never heard if a disability policy paying 25 weeks for a normal delivery whether vaginal or c section. Are you sure they will? Also, have you confirmed that you can receive disability while working because that normally disqualified you.

ETA: just looked at your past post and see you're in ca. That makes a little sense, but i still don't see you getting the disability coverage you are planning on. However, I also saw that you only had 3k in cc debt in October and were going to pay it off in 1 month. What happened? Were did the money go for the last few months and how did you run the cards up?