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[quote=Anonymous]Yes to everyone saying pay off the credit cards. And get yourself on a budget where you pay off your balance every month. If you can't do that, then you can't handle credit cards and need to close the accounts and go debit card only.

To the car--drive it until it's no longer safe or it needs expensive repairs. When you sell it, take it to Carmax and get an estimate before going to dealerships--often you come out ahead by selling to Carmax rather than trading in. Put money aside to pay it, but if you get a 0% financing offer then you can put the money for later years' payment into CDs and make a bit off it while still having the money secure. But run the numbers--it isn't better to have a 0% loan than a cash purchase or a higher-rate loan if the actual cost of the car is higher.

Put the rest minus $6500 into an emergency/house fund. If you have $150k equity plus a little more from bonuses, and you keep adding to it over the next 3-5 years, you'll be ready to move by the time your kid starts school. The only way I'd move sooner is if there are other advantages (much shorter commute, closer to family you want to spend time with, cheaper cost of living, that sort of thing).

$5500 is for an IRA. It should really be $11000 so you can each max out your IRA, but you have competing priorities, and if one spouse truly has zero income he or she may not be able to do a Roth anyway.

The final $1000 is to open a 529 college savings account for your new baby. Even if you can only put in $10 a month, do put something in every month. [/quote]

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