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[quote=Anonymous]In the next few days I will be receiving a bonus of 30K (so about 20K after taxes).  I need help deciding what to do with it, as I am not particularly financially savvy.  The possibilities:

- Use it to pay off my student loans.  I currently owe $14,300 at 3.6% interest.  I also owe a small loan (about 1K) at 2%, but not planning to pay that off. Payment on big chunk is $550 a month.

- Use it to pay off car loan.  We currently owe $17,300 at 3.76% interest. Payment is $430 a month.

- Keep it as cash emergency fund.  We currently have only about 15K, which assuming we lost the higher paying job, and immediately got rid of childcare expenses, would keep us afloat for about 3 mos, assuming serious cutback and deferring student loans.  So not enough.  That said, odds of job loss for either of us in next couple years are very low, and I think we should get a tax refund shortly that will let us dump in another 10K.

- Put it in a stock index fund (the lowest fee Vanguard was my thought).  We currently have no investments outside of work 401Ks, which we max.

- Put it in 529s.  We currently don't have 529s for our 3 young children.  For various reasons this is not a super high priority for us, but the tax savings might make it worthwhile.  However, I'm not clear if we will get tax saving - could any deduction get taken away by the Alt min tax? We bounce back and forth between paying and not paying Alt min, and I'm not sure what makes the difference.  Last year I think our tax rate ended up being 28%.  We have self-managed rental property, so I think that helps.  I figure we'd have to ask our accountant if contributing to the 529 could make a serious dent in our taxes.  But also, I'm reluctant to tie up cash in a way that is not liquid, and won't get rid of any monthly payments.

- Use it on home improvement.  Our porch is practically falling down, and connects to a badly done addition.  We could use the 20K plus maybe a HELOC to renovate.  Not a necessity by any means but would improve our quality of life a lot, plus is long term likely a good investment -- property values in our neighborhood have risen substantially since we bought, and our home is considered very desirable.  That said, we plan for this to be our forever home, so not like we plan to flip the house and make a profit.

- Something else I'm not thinking of?  Put it toward our mortgage (4.25% interest?)?  Use it to improve our rental properties?  Even if we improved them, we wouldn't raise the rent on our current tenants.

Very grateful for any advice.    [/quote]

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