I would lean to B, especially if you could clear up/pay off a debt (then you’d be increasing your snow ball month to month which will ultimately help #4) Can’t remember, what’s your outstanding debt w/o mortgage and payday loan (LendMe1000 site)?
If your BEF is the size is should be an where you feel comfortable, I’d skip. HOWEVER, if you have nothing in retirement, for example, I could be sway in this investing in an IRA.
I like #4, but if you can kill the debt entirely, this will help this area.
Let us know what you guys decide. So happy that the money is indeed yours to keep. Despite the fact that you had to pay it in the first place, it’s so nice you have it back as one lump sum. It feels so different when it’s a big chunk instead instead of small payments.
I guess if you were conservative you could put the $ in your Emergency Fund until you have a clear vision of where that money goes. However, if you are like me it’s easy to spend that money in the tim you are making your decision and wonder where it went.
What a great problem to have.
I’ll get onto one option and think “yep, this is the way to go.” Then something else will occur to me, or someone here will give another suggestion, and I’ll think “aha, THAT is what we should do.” So keep the ideas coming. Even if I settled on X as the way to go, DH will probably have some additional ideas of his own. Having a bunch of options, makes it easier to choose which one(s) is/are the best.
But I’m also thinking of DR’s recommendation to do whatever it takes to generate more income during the time folks are trying to pay off debt. For most folks, that would be getting a part time job to supplement their income. On a farm like ours, that means speeding up the pace to bring some new income stream into production. In other words, for every $100 we invest in the farm, we can then generate another $1000 (or more). So this becomes a really tempting way to spend the money – in ways that really dramatically boost our income. Hence the debate.
I finally tracked down the details for our $1234 refund from our mortgage escrow account. In short, it was thanks to the insurance fiasco we’ve been dealing with, which thankfully is just about finished. At one point the mtg company was under the mistaken impression that we had been without insurance for a year, and they arbitrarily assigned a new policy (in arrears, which is dumb because we didn’t have any claims during that time). When I pointed out to them that according to their own records, we had full coverage for the entire span of time, they not only issued written confirmation of that, but they also issued us the refund for the amount that they used to pay for that unnecessary coverage. I was on the phone with the escrow gal for a good while, working through all the calculations for that coverage, our cancelled coverage and the new coverage we just lined up. After it was all said and done, I asked “soooo, it looks like we get to keep this escrow refund, free and clear. Am I understanding that correctly?” She said “Yep!”
So, we have an unexpected $1234 sitting here on my desk, staring at me. We’re going to talk about how best to allocate it this weekend. But I wanted your collective feedback.
We would seem to have four basic options to choose from in terms of how to spend it:
1) normal monthly household bills, including the mortgage, as a way to have an “easy” month
2) pad the snowball and pay off, or pay down, a few debts
3) put it in our BEF and/or other savings
4) apply it towards our ongoing investment in the farm, in terms of equipment/infrastructure/supplies needed to generate more income
I can see strong reasons to do any or all of the above. I have also thought about just dividing it up four even ways, and applying it to each category equally. But I really don’t see any clear advantage to any one option. Does anyone have any suggestion for how to spend it, and why? Sort of a fun dilemma to have……..
I don’t know what’s wrong with me.
I’ve never been a big-spender, I’m frugal by nature. I’m the worst quilter in the world because I don’t buy fabric and I don’t “have a stash”!
We had avoided debt pretty easily, except our house, until we had so much car trouble and decided to throw up our hands and “be normal” for once and get a new car. We bought the cheapest one we could find and swore we’d pay it off early. That was last August and I’ve been obsessed with every extra dime we have going toward that car payment. We’ve paid almost $5k on it since then and now that my husband is working full time again, we will have it paid off in September. That’s four and a half years early! Whoo!
And now that our mortgage has switched hands, we have decided to keep rolling as much as we can on that rental house. We should have it paid off early 2015. Then my son graduates HS and I already have his future planned out for him!
Ok, here’s the “crazy lady” part…..
I have a 45-minute commute. Guess what I do on that commute! I listen to DR podcasts, sort of…. but I talk to him. I hold conversations with him, just like if I were calling his show. I get all kinds of good advice from him, too!!
I only hope that other commuters think I’m on the phone!
I’ll not call it a problem J My DH calls it “a bee in my bonnet”. I’ve started businesses, planted gardens, taken up painting, scrapbooking, home improvements, flylady, financial classes, reading, Dave Ramsey, the list goes on and on. Some have positive results, like beautiful scrapbooks we can enjoy for years, debt free lives, and an improved mind. While others cost money and don’t give much in return, like a dead garden and a box full of products I couldn’t sell.
I like it when I get obsessed with something because I become focused and gazelle. I like going at something whole heartedly and with passion!
Not much is buzzing right now for me. But I’m sure the next bee is just around the corner.
I was just on the phone with our broker on another matter and once we finished our business he politely asked me some questions about dmil. He is truly concerned about the financial situation she is in and wanted to reassure me that he is taking proper steps where dmil is concerned. He then asked how dh and I were doing emotionally with the whole situation. I surprised myself because I started crying. I apologized to him and said it was just she is the only mother I have left and this whole situation is killing both of us. That right now we don’t even know for certain where she is.
He said should we end up in court he will gladly testify for us. I told him how sil is opening charge cards in dmil’s name and maxing them and how she has cashed out the life insurance policy.. He is adding that to his reports. He is also putting a safe guard on the account in case she tries to use it for an asset for the cc. He says the woman has no idea how big of legal trouble she is already in and that if she makes another run at the money then his firm will be filing charges on her.
He guaranteed me that the money was going no where, and told dh and I to take a deep breath and relax that he is handling it now. I love that man!
Yes I said obsessed, not possessed. I have always had an obsession problem. I would get on a kick and every spare penny I could come up with would go on whatever I was obsessed with at the time. Like so many people I’d get depressed I’d buy something, I’d have a windfall I’d celebrate and buy something, I always had an excuse to add to my stash. The look of despair on my husband’s face as I’d lug in bag/cage after bag/cage of whatever the latest obsession was would be horrible. But I was driven.
Craft supplies, food storage, material, yarn, genealogy, poultry of all types along with all the equipment needed to breed and raise them, all have been past obsessions of mine. I have spent hundreds of dollars on each one of those, thousands on some. To some extent I still am slightly obsessed with a couple of them (food storage and genealogy), but nothing like I have been in the past. In the past I would spend hours looking for “deals” on whatever the current obsession was. Then I’d tell myself that since I was buying the items on sale I was “saving” money. Now I only search for things I truly need and only buy those when they are truly on sale. In fact I’ve not spent a dime on genealogy in about five years. Food storage has been close to 10 months, and then it was on a 20% off sale for only things we would normally use and were completely out of.
Soon I’d have more fabric, patterns, yarn etc than I could ever use up in five lifetimes and slowly I’d become overwhelmed with having so much and my enthusiasm would slowly fade. The end result would be a cache of the item that would impress any “collector”, a more cluttered home, a deeper debt, and far less money in our budget. The only good thing I could say was I did have it all organized and would be willing to part with it whenever I got the opportunity, so I didn’t qualify as a hoarder.
It’s been quite awhile since I’ve had such an obsession, or so I thought. Then today when I caught myself obsessing over the fact that it would only take $31.67 to drop a month off the number of months until my little BOA account payoff. Not pay the bill off, but to merely drop one month off of that date. Changing the scheduled payoff date to September 15, 2016 instead of October 15, 2016.
I was seriously combing every expenditure left out of this pay period looking to see if I could possibly come up with that $31.67 TODAY! I was a little down emotionally and I needed a feel good fix. I wanted that money to appear in the budget somewhere, anywhere. I needed a sale, I needed to pay that $31.67 NOW! I was truly chomping at the bit to do it. And of course I found $35 in a budget tweak and I paid it. Then I started immediately looking at how much I’d need for another month drop on any of the bills. Again, not the entire pay off (that number is far too large), but just cut a month off of ANY of the bills with the trickle down effect from paying extra on that BOA account. That’s when I realized. I’M OBSESSED!!!
We are so close I can taste it, which sounds dumb considering how close we’ve been running on the budget since the first of the year. 18-24 months, I want it and I want it now! Talk about a spoiled brat attitude. LOL!
So I’m here to say I am a debt payoff-aholic.
This obsession will end differently, however. Instead of extra junk in my house I am selling items off to feed this obsession. Instead of going in debt further I am obsessed with getting rid of debt faster and faster. Instead of ending up with less cash in my pocket I will end up with more. Instead of seeing despair on dh’s face I see instead the joy when I give him the good financial news. Each little achievement puts him that much more closer to the retirement he wants so badly.
It is also not an obsession I’ll get tired of. It is not an obsession that will end badly.
So now I ask, are you obsessed too?