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NBR: financial ?
preheatedoven
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This year we are most likely getting a pretty large tax return. We are definitely living paycheck to paycheck right now and are trying to figure out what the best plan is for it, here are the options we are thinking:
- pay our mortgage a few months in advance
- pay daycare a few months in advance
- pay off some debt (we don't have CC debt but do have a bank loan for IVF and a car loan -interest level is same as mortgage)
- put some $ into home repairs in case we need to sell (daycare for 2 is gonna kill us)
- simply put it in savings (we pretty much have none right now)
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Re: NBR: financial ?
After 2 rounds of IVF & 2 rounds of FET, we were blessed with identical twin girls!
In order of priority:
Put it into an emergency fund and keep adding to it as much as possible until you reach 3-6 months worth of living expenses. Keep this money in cash and liquid.
Then check out the CD rates or high-interest saving accounts. If those interest rates are higher than the bank loan and car loan, put your money in those.
If no, pay money towards bank loan and car loan.
Then put money into necessary home repairs (and pay in cash, not with a HELOC).
Then start over at the top of the list and put more money in your e-fund.
Mortgage is way down there on the list because hopefully some of the interest is tax-deductible (if not, put it on the same level as your other loans).
The very last thing I would do is give your daycare more money unless you get a substantial discount - that money should be earning you interest, not them. And if there is a job loss, the first thing you would stop is daycare.
ETA: Unless last year was an anomaly, you should also adjust your withholdings and set up a direct deposit for the extra cash to go right to your e-fund (make a separate account that is not linked to your checking account). Then you won't spend the extra and your savings will grow faster.
Savings.....if something happens to one of your jobs or something, you can still pay your bills/needs with the savings. CC can only take you so far in an emergency because if you don't have money to make a payment they will freeze the card and you will no longer be able to use it.