What to do with extra $3k per month

[Anonymous]

My DH got a new job last year that essentially doubled his income. As a result, we don't need my income for expenses any longer so we've been depositing it into a separate account. It's a little over $3k monthly. We've now paid off our almost $30k in credit card debt in 8 months with it. So my question now is what do I do with my income now? Pay off our cars next? Save for a house? Never been in this position before. We're already maxing retirement and kids college funds.

[Anonymous]

How's your emergency savings?
If you have 6-9 months of expenses saved, plow the extra money into paying off the cars.

[Anonymous]

You should give some of it to me, because I can barely make ends meet.

[Anonymous]

I agree w/ the emergency fund recommendation.

[Anonymous]

I swear I heard suze orman say you should always save...never dump all your $ in paying things off. Try to balance and do both. I started following her advice because I was never a saver. So I paid off things and saved! I still have a little more student loan debt but I will be done in August!

[Anonymous]

Max your retirement options at work and after that if there's still $ left, open a Roth IRA.

[Anonymous]

Anonymous wrote:Max your retirement options at work and after that if there's still $ left, open a Roth IRA.

Agreed.

Also pay off the car (based on your interest rate) if possible, especially if you can pay it off in a few months. Psychologically, not having debt is a great stress buster.

[Anonymous]

Retirement planning: check to see if you can do pre-tax retirement contributions and, better yet, if your employer(s) might match these contributions. These contributions have yearly limits, so best to contribute each year.

Otherwise, pay off debt (highest-rate debts first) and establish an emergency fund for sure.

It's hard to assess the best allocation among these options without knowing specifics about your retirement plan/savings options and debt.

It might be worth having a professional go over your options with you.

[Anonymous]

Half toward debt, half into savings. I'd also be okay with as little as one third each into paying down debt and savings and the balance on a splurge item, provided the splurge item is a one time expense (ie vacation, not a vacation house). So long as you do not decrease the dollar amount or percentages of the contributions you splurge every year.

[Anonymous]

tithe, save, debt reduction, spend.

[Anonymous]

when you say you are maxing retirement and college - does that mean you are on target for these 2 areas or just hitting the maximum for tax advantaged savings?

For example, I have 3 children - aged 3, 5 and 7. We have 200K saved for college and I want to make sure we have total of 400 K before the oldest hits high school.

[Anonymous]

I'd prioritize any remaining debt by interest rate and target paying that off in order of highest to lowest.

But I wouldn't put the full 3k to that every month - divvy it up with savings, debt payment, and charity.

[Anonymous]

Humble brag.
Oh dear, what a quandary, not sure what to do with all my extra money...

[Anonymous]

I would make sure that I never get $30 k in credit card debt ever again.

[Anonymous]

Can you tell us what job to look for that doubles your income? It would be very helpful for a lot of people.