WWYD - extra money

jlw2505 · March 2012

I have $23k in stocks that I can sell. DH and I have been talking for a few years about redoing our deck - it is small and we want to double the size (no clue how much this would cost). We don't have a ton of extra cash so I was thinking we could sell the stock and build the new deck and then with anything that is extra - we could either put that money into our retirement fund or pay down our second mortgage (which is about $30K give or take). What would you do?

LauraLynneC · March 2012

Economically speaking, now isn't a great time to cash out any investments. I think you would regret it.

Instead I would get 2 or 3 quotes on how much the deck of your dreams will cost and then start saving. Cut out all extras and put them in your "dream deck" fund and then you will feel GREAT about saving for it and will be able to toast to your ability to save while you sit on your dream deck!

ntyravgmom · March 2012

ITA above poster. Also, I don't understand why you'd want to "invest" in a new deck when you could invest in paying off your second mortgage. It seems smarter to me to pay off your mortgages before upgrading your home unless you're planning on selling. And even then, unless it will get you a higher buying offer, I don't see the point. But that's just me.

Pesky · March 2012

ntyravgmom:
ITA above poster. Also, I don't understand why you'd want to "invest" in a new deck when you could invest in paying off your second mortgage. It seems smarter to me to pay off your mortgages before upgrading your home unless you're planning on selling. And even then, unless it will get you a higher buying offer, I don't see the point. But that's just me.

Have to agree with this. Only exception would be if the old deck is a safety hazard.

BrideBuddies · March 2012

Ditto all of the above.

If the stock is earning you decent money, why mess with it. If not, then go ahead and sell it off. But put it right into some other money-earning account... not a deck or home improvement. Paying down your 2nd isn't a bad idea, either.

Do you ever tune in to Dave Ramsey? I love his advice.. not that I always follow it. Because I'm stupid with money.

jlw2505 · March 2012

Deck will be a safety hazard soon if we don't do something about it - I would not be replacing it at this time just for the fact that it is small or ugly, etc - it is at the point where it needs to be redone - it is old and has never been well taken care of (totally our fault to a point although it was not in the best condition when we bought the house). I am not planning to redo it with anything fancy - just a basic deck, only planning on making it bigger since the size it is now barely fits our grill and we want to be able to fit the grill and a small table so we can actually use the deck for more than a stairway to the backyard.

LauraLynneC · March 2012

jlw2505:
Deck will be a safety hazard soon if we don't do something about it - I would not be replacing it at this time just for the fact that it is small or ugly, etc - it is at the point where it needs to be redone - it is old and has never been well taken care of (totally our fault to a point although it was not in the best condition when we bought the house). I am not planning to redo it with anything fancy - just a basic deck, only planning on making it bigger since the size it is now barely fits our grill and we want to be able to fit the grill and a small table so we can actually use the deck for more than a stairway to the backyard.

Start with getting some quotes so you know how much money you're talking about. It might be less than you think. I would REALLY advise you not to touch your investments. They're not worth much now but you haven't lost anything UNTIL you cash them out. They WILL increase in value as the economy improves. Given that the deck will be a neccassary repair in the near future, I would cut your budget to allow you to save for that expense.

As a homeowner, you should have a sizable emergency savings for such things - if your furnace goes out, if appliances break, if your roof develops a leak. Look at your budget and find places to cut and start building that savings. Make the deck your first priority. Cut cell service down to bare minimum, start menu planning and bargain shopping, cut cable (slower speed internet and smaller cable TV package), call and see if you can get a lower rate on car insurance - there are lots of way to really cut your budget and start saving money.

I'm no expert by any stretch but I have lived on a cash only basis for just over 10 years now - my only debt is my house and that will be paid off 12 years early. I live more frugally than most people are willing but I acknowledge that and am happy to help with frugal but not rediculous suggestions

jlw2505 · March 2012

LauraLynneC:
jlw2505:
Deck will be a safety hazard soon if we don't do something about it - I would not be replacing it at this time just for the fact that it is small or ugly, etc - it is at the point where it needs to be redone - it is old and has never been well taken care of (totally our fault to a point although it was not in the best condition when we bought the house). I am not planning to redo it with anything fancy - just a basic deck, only planning on making it bigger since the size it is now barely fits our grill and we want to be able to fit the grill and a small table so we can actually use the deck for more than a stairway to the backyard.

Start with getting some quotes so you know how much money you're talking about. It might be less than you think. I would REALLY advise you not to touch your investments. They're not worth much now but you haven't lost anything UNTIL you cash them out. They WILL increase in value as the economy improves. Given that the deck will be a neccassary repair in the near future, I would cut your budget to allow you to save for that expense.

As a homeowner, you should have a sizable emergency savings for such things - if your furnace goes out, if appliances break, if your roof develops a leak. Look at your budget and find places to cut and start building that savings. Make the deck your first priority. Cut cell service down to bare minimum, start menu planning and bargain shopping, cut cable (slower speed internet and smaller cable TV package), call and see if you can get a lower rate on car insurance - there are lots of way to really cut your budget and start saving money.

I'm no expert by any stretch but I have lived on a cash only basis for just over 10 years now - my only debt is my house and that will be paid off 12 years early. I live more frugally than most people are willing but I acknowledge that and am happy to help with frugal but not rediculous suggestions

Reading what I wrote, I realize I didn't do a good job of explaining things. Part of our monthly plan already includes putting money into savings for for retirement, house emergencies,etc so the type of savings you are talking about are things that we already do on a regular basis and we cut back on a lot of things a few years back. Any bonuses we get at work go right into savings, etc. My comment about the not having a lot of extra spending money was meant more as not having a lot of extra fun spending money for things like vacations and house updates just for fun vs must do repairs. Thanks you for your thoughts though - my DH is pretty much one not to spend money without totally thinking through all different options/situations and doing a ton of research.

jlw2505 · March 2012

Oh for those that commented about the stock being worth nothing - not the case for all stock - this stock is worth something and I have earned a ton of money from it over the years and continue to do so. I agree that a lot of stock is not doing well right now but that is not the case blindly across the board.

shaindelr · March 2012

For that amount of money, my guy will come to MN and build your deck for you. Promise! :-) He does amazing work. Seriously.

I've never been in a financially comfortable situation (I still have $50,000+ in student loans to pay off), but I once sold $10,000 in stock to help put my younger brother through college. On the one hand, I'm happy I helped, but some of those companies were tech stocks that kept earning a lot in the years since I sold them... I would be wary of selling off stocks too soon. I think you should think of stocks as long term and not touch them unless it's a dire emergency.

klmbbb · March 2012

I also disagree with the blanket statement that cashing in any investments now is a bad idea - it's not applicable to every individual stock. I have stock in a large blue chip company that has done very well over the past ten years. It now sits at an all time high and if I were to cash it in today I would make a tidy profit. Sure, I'll also have to pay capital gains, but I would still have made money, even after paying the taxes.

As for the OP, if you don't mind not having that stock to fall back on any more and really want the deck, I say get it and put the rest of the money (the lion's share) towards the mortgage.

WWYD - extra money

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