Anonymous
04/08/2018 12:28
Subject: What to do with 100k
Watch out for the bonus throwing you into a higher tax bracket/AMT territory. It could mean that you end up owing more not just on the bonus but essentially everything to date and forward. I think the tax changes will work to prevent a big impact, but the past several years, my 100k bonus threw me into a horrible AMT zone that meant I ended up having to pay lots out of the bonus to cover the higher take from the rest of my income
Anonymous
04/07/2018 11:39
Subject: What to do with 100k
Anonymous wrote:Anonymous wrote:Anonymous wrote:Is the 100k the gross or net amount?
Gross((
So it's more like 60k
Do you have any savings (like an emergency fund)?
Credit cards first. Then, if needed, put $20k in an emergency fund. Buy a new gently used car for less than $20k.
And yes, like PP said, restructure your finances. No more CC debt. Dedicated savings.
+1 you guys need to cut up your credit cards. Buy a low mileage Honda. Start saving for your move.
Anonymous
04/07/2018 11:31
Subject: Re:What to do with 100k
Anonymous wrote:+1 take care of all cc debt and commit to not accumulate more. Credit card debt is a massive drain on your ability to create financial stability/wealth.
+1 up your 401k contribution to reduce tax burden.
Establish an emergency fund (typically equivalent to to 6 mos expenses) to help avoid future debt. Pregnancy can create unexpected financial situations/costs (hospital bills, bed rest etc.) and having a baby even more. It's a very dynamic time of life. If you don't have enough for 6 months expenses do what you can and establish a savings plan to do more.
When your car breaks down, buy a 3+year old used car with low-ish mileage rated highly for reliability. This will give you the most bang for your buck. Don't buy until necessary, but put funds aside for it outside of the emergency fund. Call it a car fund so it doesn't get sucked into your expenses, but don't consider it part of your e-fund. Keep your eyes out for good used car deals. Research on edmunds.com for reliability/cost to maintain etc.
I wouldn't buy the new place yet. Moving adds a lot of costs. You don't need schools for years. But use any remainder to start a down payment fund with a plan to move in 3-5 years, spend the time researching neighborhoods/schools/commutes etc. Calculate how much more you need to have a 20% down payment on the neighborhoods you're interested and begin a savings plan.
This bonus is more a chance to clean up your slate and begin a responsible financial plan than it is to pursue new opportunities.
Congratulations on the bonus!
+1 Great advice
Anonymous
04/07/2018 11:23
Subject: What to do with 100k
Anonymous wrote:Anonymous wrote:Anonymous wrote:Is the 100k the gross or net amount?
Gross
So it's more like 60k
Do you have any savings (like an emergency fund)?
Credit cards first. Then, if needed, put $20k in an emergency fund. Buy a new gently used car for less than $20k.
And yes, like PP said, restructure your finances. No more CC debt. Dedicated savings.
This. Get your financial house in order first.
Anonymous
04/06/2018 14:34
Subject: Re:What to do with 100k
This is very simple. 20k pays off credit cards. 20k set aside for a brand new economical car (civic or corolla). You'll have between 10k and 20k leftover.
Unless you think this is turning a new page, cut up the credit cards. Unfortunately your track record with running up debt stinks, and you may be better off being cash and debit only. That means rice and beans, and getting rid of the expensive cell phones, and cancelling all monthly subscriptions (i'm just assuming)
Restructure your budget to live only off your base, and either commit to using next year's bonus as downpayment/move money, or commit to saving a large portion of your base. Both is better.
Unless you think this is turning a new page, cut up the credit cards. Unfortunately your track record with running up debt stinks, and you may be better off being cash and debit only. That means rice and beans, and getting rid of the expensive cell phones, and cancelling all monthly subscriptions (i'm just assuming)
Restructure your budget to live only off your base, and either commit to using next year's bonus as downpayment/move money, or commit to saving a large portion of your base. Both is better.
Anonymous
04/06/2018 14:18
Subject: What to do with 100k
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:1. How much at what interest rate?
2. What kind of car do you currently have? How old is it with how many miles? How far is your commute?
3. Where do you live now? Any home equity? How old are kids?
1)We have about 20k cc debt at pretty high rate. I think maybe we can pay this first or at least half of it.
2)We have 2009 car with 160k miles on it. We have only on car and commute for one of us is 50min
3)We live in bad school district and if we sell will have around 150k in equity. I am pregnant with first, so we still have some time.
Well that was easy. #1 first. #2 second (<$30k). #3 third. Invest the $50k and wait until you have to move.
Get yourself something reliable and inexpensive like a Honda Civic for 20k and then you have 60k left to add to your house savings. And don't get credit card debt again, that's ruinous.
This is me. Something I want to add, OP- once you get your life arranged so that you are budgeting properly and NOT getting into credit card debt at all ever, I say go ahead and move. Like you, we live in a bad school system and it's not worth dealing with if you have a large amount of equity and you want to leave. Most likely housing is going to get more, not less expensive. Do yourself a favor and leave.
Anonymous
04/06/2018 14:05
Subject: What to do with 100k
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.
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.
Anonymous
04/06/2018 14:04
Subject: What to do with 100k
Anonymous wrote:Anonymous wrote:Anonymous wrote:1. How much at what interest rate?
2. What kind of car do you currently have? How old is it with how many miles? How far is your commute?
3. Where do you live now? Any home equity? How old are kids?
1)We have about 20k cc debt at pretty high rate. I think maybe we can pay this first or at least half of it.
2)We have 2009 car with 160k miles on it. We have only on car and commute for one of us is 50min
3)We live in bad school district and if we sell will have around 150k in equity. I am pregnant with first, so we still have some time.
Your stance here towards paying off your cc debt--thinking about only paying half-- worries me. You should pay it all and set up your life to not get any more. Nothing else on your list should be touched until that is gone. I don't think you fully grasp how much cc costs you and undermines future financial stability.
This. There is absolutely no reason to have CC debit if you get 100K bonuses.
Anonymous
04/06/2018 13:23
Subject: What to do with 100k
Anonymous wrote:Anonymous wrote:1. How much at what interest rate?
2. What kind of car do you currently have? How old is it with how many miles? How far is your commute?
3. Where do you live now? Any home equity? How old are kids?
1)We have about 20k cc debt at pretty high rate. I think maybe we can pay this first or at least half of it.
2)We have 2009 car with 160k miles on it. We have only on car and commute for one of us is 50min
3)We live in bad school district and if we sell will have around 150k in equity. I am pregnant with first, so we still have some time.
Your stance here towards paying off your cc debt--thinking about only paying half-- worries me. You should pay it all and set up your life to not get any more. Nothing else on your list should be touched until that is gone. I don't think you fully grasp how much cc costs you and undermines future financial stability.
Anonymous
04/06/2018 13:11
Subject: What to do with 100k
Anonymous wrote:Curious OP, what kind of job do you have paying 100K bonuses?
Middle management. Tech. My base is not so great.
Anonymous
04/06/2018 12:32
Subject: What to do with 100k
Curious OP, what kind of job do you have paying 100K bonuses?
Anonymous
04/06/2018 12:24
Subject: What to do with 100k
Anonymous wrote:You most important priority is some restructuring of your life so, with a high income, you won't again have credit card debt (or really any debt).
+1. I think the most important thing is to exam your spending habits. Unless you fix that, you will end up at the same point again and again...