Opinions wanted

[bnlfan]

Okay,

I have a fun choice to make and would like opinions.

Let me tell you my income status.

I went back to school for just over two years. I started my new job over 3 months ago. After some union negotiations my pay has jumped to $40,000.00 per year without counting overtime and other "extra" pay. Since my family has become used to living off less than $1000.00 a month because of me being a fulltime student I have an extra $28,000.00 per year available. Now you take into account the new "used" car (hated to do it but we needed one) with insurance and I have a little less.

We have determined that we can afford to pay a house payment and a half every 2 weeks and pay off the house in about a year.

The decesion I have to make is this.
(Keep in mind I work for a military contractor and they only have one year left on the contract and have to rebid)

I have $6000.00 coming in the next few days.

I can do one of the following with it.

Pay it all toward the house and only have a bit over $4000.00 left on the house. We can then pay off the house at $500.00 per month in 10 months.

The other thing I can do with the $6000.00 is.

Carpet my house $1500.00
Tiles for roof 1000.00
Paint outside 500.00
Paint inside 150.00
Years supply food 1500.00
M-4 900.00
----------------------------
Total spent $5550.00
Leaves 450.00

Now, the carpeting is for all three bedrooms, hall, closests, living room, and dining room. It includes install, moving furniture, and lifetime pad.

Tiles for roof is an over exageration for what is needed. Since I am going to use Ondura sheets (see www.ondura.com) I can purchase them a few sheets each pay period until I build up enough to do the job. I can do the install on my own thanks to a diploma in residential carpentry. The roof needs to be recovered but its not an emergency.

Painting the house will be hired out because I do not have the equipment to get up on the high side. I do have 2 family members in the business and was quoted $500.00 not counting paint.

Painting the inside will be done my me so the cost is high and for paint and supplies.

So, do I put the money against the mortgage or the upgrades? Or do you have a better idea (besides giving you folks the money )?


The years food can be built up over the next few months.

The M-4 is a major want and not a need.

[ceresone]

Just me--but I'd get out of debt--then work on the house as you can--

[pancho]

Pay off the house first. Then start on your list.

[Maura]

Roof. You can do it now without thinking about the cost, and that $1500 will only get higher. It is an investment and adds to the value of your home. Since you have labor for the exterior paint, get that done too. If you can live with the old carpeting, put it off. Paint is relatively cheap and really perks up the place. I'd paint, but use a premium quality paint that is "really" washable, like a semi gloss or satin. $1,000 for the roof, $650 for the paint = $1,650, leaving you with $4,350. I'd put $4,000 into the house and splurge on something with the remainder.

Before putting the money down on the house, contact your lender and make sure that all of that money is going toward the principle.

[danoon]

Life, and your income can change in the blink of an eye. Pay off the house then work on other things.

[uncle Will in In.]

Your ship hasn't docked just yet. Why do you need to spend all you make. Rat hole most of it, and keep your hands off of it until such time arises that there will be no doubt where it should go. Adopting a pay as you go lifestyle will relieve a lot of the stress that can ruin many of lifes simple pleasures. And yes the house being paid off should be number one. Anytime you avoid paying any interest puts the money in your pocket instead of theirs.
I know this is more than you asked, but it relates to your question.

[tinknal]

Do you have any kids at home? If not I'd sock it away in a tax deferred acount or the IRS will nail you next year.

[Boleyz]

You've obviously been wise and frugal so far, so I would suggest that you don't change your ways.

Fix what Needs to be fixed, and put the rest toward getting out of debt.

JMHO

[bnlfan]

Originally Posted by tinknal

Do you have any kids at home? If not I'd sock it away in a tax deferred acount or the IRS will nail you next year.

Yes, I have kids and the IRS is where the money is coming from. This is the last year I will get this large a refund. The interest on the house is less than fourteen hundred. But, it is the only thing that I have that has a chance of being taken away if not paid for (under normal circumstances).

Before we found out about our refund we were planning to do work on the house one room per month.

[Still Learning]

My vote is for doing what *must* be done to the house now (roof?) and putting the rest towards paying off the house.

This is if you guys have an emergency fund saved up (3 to 6 months of income)? If not, you may think about setting up an emergency fund first. Then continue to pay off the house. Then work on the house a little at a time.

Just my thoughts...

~Ashley

[mightybooboo]

Originally Posted by pancho

Pay off the house first. Then start on your list.

Ditto.In my book owning your home is peace of mind unsurpassed.

BooBoo

[makeitdolou]

If it were me and I had a mortgage, I'd pay off the majority of the principle on the mortgage, as that is the only thing costing you money right now. The interest saved on the mortgage would pay for the roof. Yay for you for being so good with your money!

[hmsteader71]

If we were in the same situation, we would pay off the house and then do the upgrades.

[tinknal]

I am in a similar situation. I recently inheireted a good chunk of change. after paying off what I absolutly have to I will be left with about $65 grand. The one thing that I'm absolutly goin to spend on is a good shop/barn, and an outdoor woodstove. After that I could pay off the mortgage and still have about $12 grand left, or I could hang on to it and keep paying the monthly mortgage. For now I am going to keep the money liquid and keep making mortgage payments. I figure if there were some major change I could still pay off the mortgage at that time.

[Trixie]

You get $6,000 refund on a $12,000 salary???

[bnlfan]

Originally Posted by Trixie

You get $6,000 refund on a $12,000 salary???

No. I said I got my family used to living off $12,000 per year. We used the rest for school and to pay off debt. I had other sources of income as well.

Now I will have only the income from my job. The other 2 sources have gone away.

And, yes I got a $6000.00 refund. I did not pay that in and I don't think its fair that the government takes money from those making more and giving to those making less. At the same time, I am going to put it to good use.

Chances are I won't be getting a refund that large again.

[BeeIreland]

[Keep in mind I work for a military contractor and they only have one year left on the contract and have to rebid)]

If this is the case, your job may not be secure so paying off the house should be a priority, then make it weather tight followed by stocking up for the possible hard times.

Then go for the 'luxuries' such as carpets

By paying a chunk off your mortgage you'll reduce the payments for the rest of the year and save money anyway!

[SteveD(TX)]

My advice is to put half of everything you make (over and above essential expenses) into savings, including the $6000. Then the remaining 50% could be split evenly into paying off the mortgage, and repairs/upgrades. Once you have a full year's worth of living expenses in the bank, then throttle it down a bit if you want.

[Bruce in NE]

What's a M-4?

[okiemom]

Jobs that have the potential for lossing their contracts make work very risky. Some contracts are more stable than others but I would save most of the money.

Most people have only a few months for savings. If your job is more risky you need more. Finding new contract work can take up to a year and my make moving necessary. You will need liquid cash if you loose your job to pay for groceries, moving, babysitters for job hunting, etc.

Pay for the roof if that is very pressing but before it starts to leak. Carpet is a huge loosing money pit and only adds to a house value if it is new and it only stays that way a few months max. Carpet Rugs are better and are cheaper than wall to wall.

Save the rest paying off your morgage normally Until you get a year+ worth of saving then put all the extra you can to pay off the house faster. If you pay off the house but have no savings and you loose your job you might risk having to sell to pay bills. Congrats, all your hard work is paying off and you are almost there.