Help me allocate my money please!

[annibe11e]

I've got a lot going on and I need help thinking...

I have about $1200/mo beyond my living expenses to work with.

My primary job is secure. My second job, which accounts for the majority of my "excess" money is less secure. I do janitorial work 5 nights a week which is considered essential and which it seems companies are not willing to forego right now as we do daily sanitizing, but I'm not sure they will continue to justify that expense as they recover after things reopen. I have no real reason to think I'll lose the job...I just give it a lower security rating than my other one.

1. I'm going back to school and am eligible for tuition reimbursement from my company, but I will have to pay up front for the first semester, appr $1000 in August. I can break that into 5 monthly payments if needed, no interest.

2. I have a 2003 VW Passat that needs a heater core est $1000. I was going to either get that done or get a different vehicle a few months from now. It's now sounding a little rough and needs brakes, so I'm thinking of getting another car now, but I don't have the money saved to buy outright, so I would need to finance.

3. Emergency fund is at about $2500.

4. I have minimum debt payments of $545/mo. which are included in my living expenses.

5. I pay $425 per month to my ex-husband which will end in December. I can prepay without penalty.

6. I am expecting to be billed for a surgery I had in February. I have a primary and secondary insurance and I have no idea who is paying what. Worst case scenario is full deductible of up to $3,000.

7. I should be receiving a tax refund of about $600 and a $1200 "stimulus" payment, but I don't know when either of those will arrive as I haven't filed 2019 yet.

8. I am not on a bare bones budget and can cut about $400/mo if it became necessary, but I have no plans to do so right now.

9. I really want to buy a scooter or motorcycle this summer $2000

10. I'm changing my coverage and adding my son to my health ins in January. Est $300/mo increase.

11. I would like to take a vacation in September $1000

Oh, I'm 41 and do not have enough retirement savings, but I'm a little hesitant about upping my 401k contributions right now. I have it set to increase by 1% per year automatically.
I'm a renter.
My children are grown but one lives at home.
I think that's about it...

[bjl584]

Exactly what are you asking?

[Petunia 100]

If it were me, I would save up cash and pay for these things as they come "due", to the best of my ability. Prioritize the needs and wants.

I would not finance a car at this time. You still have other debts you are carrying, plus all of these upcoming expenses. Repair the car you have and keep it.

I would not prepay the ex husband. Just pay him one month at a time until it is done.

[disneysteve]

You are in debt, owe your ex a bunch of money, have a small emergency fund (kudos for having that), need to replace your car, want to buy a scooter, want to go on vacation, want to add your grown son to your insurance, need to front $1,000 for tuition, and need some amount up to $3,000 for medical bills. You also estimate that you are spending $400/month more than necessary.

One question I'd add is to tell us about your debt. How much? What interest rates? How long before it's repaid?

Based on what you've posted, I'd say you need to forget about the scooter for now. That's a total want and you have far more important needs. The car is probably #1. Start shopping for an acceptable used car. My daughter bought hers a few years ago for 5K and I'm sure she could have found something functional for less than that. Take your $600 refund and your $1,200 stimulus check and put that toward the car (why haven't you filed taxes by the way?). If you need to finance a couple thousand, that wouldn't be terrible especially because the payments to your ex stop after December and you could then knock out the car loan (unless your other debt is higher interest).

Maybe cutting $400 out of the budget is too extreme but I'd at least work on trimming it. Even if you could free up an extra $50 or $ 75 each month, that would help your situation a lot.

Are you saying you currently bring home $1,200 more than you are spending? If so, that's fantastic. I would be directing a piece of that toward your EF every month to gradually build that up and putting the rest toward the debt. Again, we'd need details about the debt to advise how best to do that. In the very short term, you could also use some of that money toward the car purchase.

What's the situation with your son? Is he employed? Is he paying his share of expenses? What about the health insurance? Will he contribute to that?

[kork13]

In general terms, I'd echo Petunia's advice.

"Wants": (Scooter/motorcycle, vacation) Put these on hold until you save up the cash to pay for it in full (no more debt).

Car: It's springtime, so you likely don't need the heater in your car very much, right? (Unless it's a diesel Passat, and you're talking about the heat plugs required to start your car?) If possible, you'll do best to delay purchasing the new car as long as feasible while you save up cash for it. But if the replacement car is a "must have," sell what you've got for as much as you can, then use $1k-$2k from your savings to get another car that will get you by for the next year or two. No, it likely won't be pretty--just needs to work.

Tuition, Medical, Ex-Husband: These are necessary, but only pay them as required. Spread out the tuition payments over the 5 months, don't bother pre-paying the Ex, and just wait for the medical bills to all get settled by insurance before you try to pay them.

Son's Med Insurance: Is your son working, or totally dependent on you? If he's working, he should be paying for whatever is the extra cost to add him to your insurance plan. (different story if he's fully dependent)

Overall: You're doing fine, but keep your priorities straight. Pay your bills only when they must be paid. Save up a more sizeable emergency fund (3-6 months' expenses) to prevent accumulating more debt through unanticipated expenses. Then put everything you've got into clearing all of your debts. Once you get the debts gone, THAT'S when you can look at saving up for a nicer car, or buying a scooter/motorcycle, or going of on a vacation. And as Steve said, even if you can reduce your expenses (or increase your income) by $100-$200/mo, that would help to speed the process along.

[annibe11e]

My debts
CC - $2400 - 11.75%
Line of credit - $5200 - 10.75%
Student loans - $40000 - 5.125%

I should mention I got divorced in November and am just getting settled into my new financial life.

My son and I are on my ex-husbands insurance through the end of this year. That's why I'll be changing my coverage at work and adding my son. He will not be contributing to that. I'm providing that along with room and board while he's in school.

Yes, I'm currently bringing home $1200 more than I am spending every month. I'm trying to balance savings, debt, needs, wants, and make sure I'm accounting for everything.

[bjl584]

My debts
CC - $2400 - 11.75%
Line of credit - $5200 - 10.75%
Student loans - $40000 - 5.125%

I should mention I got divorced in November and am just getting settled into my new financial life.

My son and I are on my ex-husbands insurance through the end of this year. That's why I'll be changing my coverage at work and adding my son. He will not be contributing to that. I'm providing that along with room and board while he's in school.

Yes, I'm currently bringing home $1200 more than I am spending every month. I'm trying to balance savings, debt, needs, wants, and make sure I'm accounting for everything.

I agree with the others that the wants need to be tabled for now until the debt is cleaned up.
Can you pick up additional work?
Have you looked into refinancing any of your debt?
Interest rates can't get much lower. It may be a good time to look into that.

You have an extra $1200 a month, so I'd start putting as much of that as possible towards the debt.
Looks like you can knock out the CC and LOC in the next few months.

As for the car:
Sounds like you should get it repaired and keep driving it for the time being. At least until you have some debt paid down.
I'd get a second or third opinion on the repairs.
Avoid the VW dealership.
Find a local mechanic with good references.

[annibe11e]

I agree with the others that the wants need to be tabled for now until the debt is cleaned up.
Can you pick up additional work?
Have you looked into refinancing any of your debt?
Interest rates can't get much lower. It may be a good time to look into that.

You have an extra $1200 a month, so I'd start putting as much of that as possible towards the debt.
Looks like you can knock out the CC and LOC in the next few months.

As for the car:
Sounds like you should get it repaired and keep driving it for the time being. At least until you have some debt paid down.
I'd get a second or third opinion on the repairs.
Avoid the VW dealership.
Find a local mechanic with good references.

I'm working 2 jobs 5 days a week and I have a small business on the side, so I wouldn't be able to pick up any more work unless it was an emergency.

I looked into refinancing my student loans, but wasn't able to get anything lower than what I have. As far as the other 2, I haven't looked and I'm not too worried about them as they are small and will get paid down pretty quickly.

As far as the car, I've gotten a second estimate and it was also around $1000. Both local mechanics. One I've used for 20 years so I'm pretty certain about the expected cost of that repair. However, the car has also started running loud, whatever that means. It started the other day, so I haven't had it looked at yet. I guess I'm worried I'll put a big chunk of my emergency fund into this car and it will crap out on me anyway. I'm used to driving newer vehicles and this one is starting to make me nervous.

To be completely honest, I'm uneasy about foregoing all of my wants until all of my debt is paid. I know by the numbers, that's the most sound way of doing it, but I know me. I've tried this before and it falls apart. Chalk it up to lack of will or maybe it's impulsivity or a need for instant gratification at least partially due to ADD. Whatever it is, I don't have what it takes. That's why I mentioned a few times about finding a balance.

I noticed no one has weighed in on my retirement. It is underfunded as I just started a "real" job with benefits a couple years ago and started saving. Plus, the value has dropped about 20% since the beginning of the year last time I looked.

I appreciate all the feedback. I'm starting to get an idea of how to move forward. Thank you

[LivingAlmostLarge]

My debts
CC - $2400 - 11.75%
Line of credit - $5200 - 10.75%
Student loans - $40000 - 5.125%

How much are you saving into your 401k?

I would pay CC $2400 - two months
stimulus to LOC, then months 3, 4, 5, 6 excess

Student loans - minimal debt payments

Decide new car, motocycle or vacation? I think you can't do it all. If you want a new car then sell yours and buy it and take on payments. Or go on vacation and make do with car with $1k in repairs, use your excess to repair and cut bare bones for 2 months

Then use $400 excess for school $1000. Then turn the alimony to building EF

[annibe11e]

My debts
CC - $2400 - 11.75%
Line of credit - $5200 - 10.75%
Student loans - $40000 - 5.125%

How much are you saving into your 401k?

I would pay CC $2400 - two months
stimulus to LOC, then months 3, 4, 5, 6 excess

Student loans - minimal debt payments

Decide new car, motocycle or vacation? I think you can't do it all. If you want a new car then sell yours and buy it and take on payments. Or go on vacation and make do with car with $1k in repairs, use your excess to repair and cut bare bones for 2 months

Then use $400 excess for school $1000. Then turn the alimony to building EF

401k contribution is 8% plus 3% match. I have my contribution set to increase 1% per year automatically.

[Jluke]

Fix the car if the mechanic can tell you that it’s not just a band aid fix.

$500 per month to the credit card until it is gone.

save the remaining $700.

biggest issue with gaining control of your finances is yourself. You have the means to get in good shape but your wants will only delay any semblance of being debt free.

[kork13]

I noticed no one has weighed in on my retirement. It is underfunded as I just started a "real" job with benefits a couple years ago and started saving. Plus, the value has dropped about 20% since the beginning of the year last time I looked.

Sorry, I must have overlooked that bit... However, my advice would largely remain the same. Of you have a match from your employer(s), contribute enough to earn the full amount that they'll match. But beyond that, I'd recommend focusing on the debt. Once you clear the debts, you'll have more of your income available to shovel everything possible toward retirement. In the meantime, giving up a bit of retirement contributions for now will help you pay off the debt ASAP, then let you focus completely on retirement (and having fun with the "wants").

Totally understand not wanting to give up on the wants. But perhaps you can modify what you're looking at. No one can run at a sprint forever, so having some pauses as you go can be valuable to keep you motivated & in the game. But a $1k vacation & $2k toy (motorcycle) are very expensive ways to let loose & let off some tension. Instead, you can schedule something you enjoy every few weeks, or after paying off $X of your debts. Good rewards vary by person, but it may be going to a favorite activity/restaurant/show, or getting a massage, or whatever gives you done fun & will let you enjoy your accomplishments. That way it becomes a reward, and psychologically, you actually get a boost & you can start to enjoy the process of getting out of debt. Will power is definitely needed, but you can short-circuit that problem with occasional little rewards to celebrate incremental successes.

[bjl584]

I'm working 2 jobs 5 days a week and I have a small business on the side, so I wouldn't be able to pick up any more work unless it was an emergency.

I looked into refinancing my student loans, but wasn't able to get anything lower than what I have. As far as the other 2, I haven't looked and I'm not too worried about them as they are small and will get paid down pretty quickly.

As far as the car, I've gotten a second estimate and it was also around $1000. Both local mechanics. One I've used for 20 years so I'm pretty certain about the expected cost of that repair. However, the car has also started running loud, whatever that means. It started the other day, so I haven't had it looked at yet. I guess I'm worried I'll put a big chunk of my emergency fund into this car and it will crap out on me anyway. I'm used to driving newer vehicles and this one is starting to make me nervous.

To be completely honest, I'm uneasy about foregoing all of my wants until all of my debt is paid. I know by the numbers, that's the most sound way of doing it, but I know me. I've tried this before and it falls apart. Chalk it up to lack of will or maybe it's impulsivity or a need for instant gratification at least partially due to ADD. Whatever it is, I don't have what it takes. That's why I mentioned a few times about finding a balance.

I noticed no one has weighed in on my retirement. It is underfunded as I just started a "real" job with benefits a couple years ago and started saving. Plus, the value has dropped about 20% since the beginning of the year last time I looked.

I appreciate all the feedback. I'm starting to get an idea of how to move forward. Thank you

Wants are good. Rewards are good.
But, I would recommend that you find smaller rewards for yourself.
You don't need a $1000 vacation or a motorcycle to keep from falling apart mentally.
Maybe a small reward like a $50 shopping trip, a nice dinner out, or a walk in the park will do to keep your head straight.

[LivingAlmostLarge]

I think you need to prioritize wants. Why do you want a vacation, scooter, and new car? I think that having a sensible budget is like having a sensible diet. No diet, lifestyle change so you can keep it up.

[~bs]

100% emergency fund. Should be cutting back as much as possible in this situation. 2500 emergency fund basically means you're a month away from defaulting on all your debt and rent should anything happen. Build that up to 6 months first, then look at reducing debt.