I'm back (again) for some personal finance advice

[hehateme000]

you just blew through almost 200k of the settlement and those were really good moves with that money.

id let the dust settle and park that 70k in a High yield savings account at 4%, or some brokerages are paying 5% in their settlement fund - usually a money market. that’s probably 250/month in interest (ballpark).

add the interest earned to your trailer payment and start chipping away at it. You could always take 5-10k to bring the loan balance down then continue with payments.

at this point I would be more focused on what you can do to build up your assets now that your debt side is manageable.

Thank you! Still 2 weeks away from closing on the house so I can't open any new accounts, but definitely going to open a HYSA after we close. The trailer debt seemed manageable enough to pay extra toward while still giving us a nice cushion. The truck payment was just so high (900) that it was nice to get rid of it, and the student loan was a debt I thought I would have for the rest of my life so that was a big psychological one for me. I agree though that I want to start working on assets (roth IRA, possibly kids college, paying for my next car in cash, etc)

[hehateme000]

TBH, was a struggle for me and DW for the first decade of our marriage (me a saver and her a spender), but we worked our way through it and found an appropriate balance. I think the best thing you can do is to talk about where you want to be as a couple in a decade or two decades and then let that vision be your guide for near-term decisions. But always with a "balanced" mindset. Success wasn't like flipping a switch - it took time and practice.

Thanks for this - nice to know I'm not the only one - and you said first DECADE - which isn't a small amount of time lol. But talking about our future will help a lot I believe. She grew up poor, still shops like we are poor, and I think I am the only person she knows that even thinks about basics of money like budgeting, saving, not having debt, etc. So the idea of having 500k, 1 million, or more in retirement in 30 years to her seems impossible. But she is on board with whatever we ultimately decide, just wish she believed it and not just say "Whatever you think is best"

[hehateme000]

Are you saving 20% for a home? Are you already in the home? I think that when she starts to see how great it is she'll get on board. Sometimes until you live the dream it's hard to see it.

We were able to put 20% down (106k on a 530k house) in northern CA. Not a bad price in this current housing market for a 4bd/2ba house in a small, but desirable town. We will be in the home August 14th!

[srblanco7]

Thanks for this - nice to know I'm not the only one - and you said first DECADE - which isn't a small amount of time lol. But talking about our future will help a lot I believe. She grew up poor, still shops like we are poor, and I think I am the only person she knows that even thinks about basics of money like budgeting, saving, not having debt, etc. So the idea of having 500k, 1 million, or more in retirement in 30 years to her seems impossible. But she is on board with whatever we ultimately decide, just wish she believed it and not just say "Whatever you think is best"

I still get the functional equivalent of "whatever you think is best", but at least we're on the same page with regard to finances - which has allowed us to accumulate a reasonable retirement portfolio. Next big decision (a few years out) will be our retirement destination.

[mumof2]

Ive been looking into sac state nearby and i was surprised how much cheaper it was than I thought! The goal would be for my kids to aim higher than Sac State, but it would still be nice to have 4 years worth of a state college saved for them. Honestly feels like something we can cash flow.

We got the settlement check, 268k. Also all untaxed like we thought which is awesome. Moving pretty fast already:

-Paid off truck (37k) saving 900/mo.
-Paid off student loans (53k) - saving 250/mo (All interest).
-House down payment 20 % (106k)

Leaves us with ~70k in savings and the trailer left to pay off. I would like to pay it off but my wife is having a hard time only having 40k leftover rather than 70k. What I decided is were going to pay extra toward it every month, maybe 1k-1.5k on top of the 300/mo payment, and treat the extra payments like they arent optional. If we cant keep that up after a few months, then we will just use the savings to pay it off. With the new mortgage, our total monthly bills go up 300. If we paid off the trailer, the monthly bills would be the exact same as before buying the house and paying the debt off.

We have nearly all debt paid off, we have 20% equity in a home, and we have 70k savings. So a lot better position than before, but lots of room to improve. If we kept 20k in emergency fund, that leaves 50k to pay trailer off, or put some into 529s, or max out roths instead of contribute until next April. How do you guys get your wives on the same board as you lol...thats my biggest hurdle.

I would show her how much interest if I am reading right he trailer has $28,000 to be paid off at 300pm and you pay 150pm interest...so that would mean if you paid like you are you will be paying $14,000 in interest...but if you paid it off, then you could use her money and just put it into savings...like it doesnt exist and it will grow rapidly at $1700pm (around $20,000 pa) you were doing fine withou her income and you would only have the morg as debt....so that it would save you money in the long run, you would have a great emergency fund and savings so I think it would be better....maybe if you explain it to her like that it would help...not sure

[kubet6886]

Welcome back, and it's great to hear you're in a better position now! First off, on the upcoming settlement, and it's wise to think strategically about how to allocate it.

Here’s a possible plan:

1. Prioritize Debt: Since debt is a burden, start with paying off the higher-interest debts first. I'd suggest tackling the trailer loan (6.74%) before the truck. While the truck is a larger payment, the trailer's higher interest rate is costing you more in the long run. Eliminating that will free up $300 a month and reduce your total interest payments.
2. Build an Emergency Fund: Aim to have at least 3-6 months of living expenses set aside in a high-yield savings account. With $5,000 in cash now, you might want to set aside a portion of the settlement to increase that buffer. This will give you more peace of mind in case of unexpected expenses.
3. Max Out Your Roth IRAs: You mentioned wanting to max out your Roth IRAs, and that’s a solid move for long-term retirement growth. Since your wife doesn’t have an account yet, you could open one for her and aim to contribute the max for both of you for the year. This not only helps you with tax-advantaged growth but sets you up better for retirement.
4. Saving for the Kids’ College: You might want to look into a 529 plan, which offers tax advantages for education savings. It’s a good idea to start setting aside funds for the kids' college, especially with the settlement. Even small contributions can grow significantly over time.
5. House Fund: After paying down debt and taking care of the above priorities, it’s a great idea to set aside a chunk for a down payment on a house. Homeownership can be a solid financial move in the long term, so getting that ball rolling will benefit your family.

In summary, consider this order: high-interest debt, emergency fund, Roth IRA contributions, and college/house savings. With your disposable income, you'll also have the flexibility to continue building your savings after the settlement is spent wisely. Good luck, and it’s great to see your commitment to improving your financial situation!

[hehateme000]

you just blew through almost 200k of the settlement and those were really good moves with that money.

id let the dust settle and park that 70k in a High yield savings account at 4%, or some brokerages are paying 5% in their settlement fund - usually a money market. that’s probably 250/month in interest (ballpark).

add the interest earned to your trailer payment and start chipping away at it. You could always take 5-10k to bring the loan balance down then continue with payments.

at this point I would be more focused on what you can do to build up your assets now that your debt side is manageable.

Hey, just wanted to update and say that we did end up putting that money into a HYSA, and we also ended up paying the trailer completely off.

In a few days (when transfer completes from HYSA to my bank) we are going to pay 36k toward my student loan which will take it from 52k to 16k. BUT, when we moved into our house, we had to take over this solar contract that they had - 38k! The good thing is that our electric bill is about $700/month lower from our previous house, but I still do not like the idea of taking on additional debt. It is $275/month and I am sure we will hammer it down in the future, but for now were focused on paying the student loan completely.

I got my wife on board with leaving $15k in our HYSA for savings. We are both so surprised at how it went from 270k all the way down to 15k, but we also know that 99% of that money went to good use. We are going to Hawaii in July, and tickets/hotel/car were about 6k for a week. Besides that 6k, all the other money from her settlement went to debt, savings, or the 20% down payment.

Thanks again everyone for the advice! We are excited to actually start saving big money toward our retirement!

[mumof2]

Hey, just wanted to update and say that we did end up putting that money into a HYSA, and we also ended up paying the trailer completely off.

In a few days (when transfer completes from HYSA to my bank) we are going to pay 36k toward my student loan which will take it from 52k to 16k. BUT, when we moved into our house, we had to take over this solar contract that they had - 38k! The good thing is that our electric bill is about $700/month lower from our previous house, but I still do not like the idea of taking on additional debt. It is $275/month and I am sure we will hammer it down in the future, but for now were focused on paying the student loan completely.

I got my wife on board with leaving $15k in our HYSA for savings. We are both so surprised at how it went from 270k all the way down to 15k, but we also know that 99% of that money went to good use. We are going to Hawaii in July, and tickets/hotel/car were about 6k for a week. Besides that 6k, all the other money from her settlement went to debt, savings, or the 20% down payment.

Thanks again everyone for the advice! We are excited to actually start saving big money toward our retirement!

Thought you said earlier that you had paid off student loans already?? and who pays $38k for solar that is a rip off...I would have said no thanks

[LivingAlmostLarge]

Thought you said earlier that you had paid off student loans already?? and who pays $38k for solar that is a rip off...I would have said no thanks

depends on where and how large the solar is. I know it'd cost that much for us. Our neighbors paid $50k.

[disneysteve]

Thought you said earlier that you had paid off student loans already?? and who pays $38k for solar that is a rip off...I would have said no thanks

I don’t think that’s an unusual amount. I’ll have to check with our daughter. She’s the funding manager for a solar company.

[mumof2]

depends on where and how large the solar is. I know it'd cost that much for us. Our neighbors paid $50k.

wow don't know anyone over here that has spent more than $10,000 and that was a big property on acreage...that is so expensive...what do you get with that how many panels and batteries??

[disneysteve]

wow don't know anyone over here that has spent more than $10,000 and that was a big property on acreage...that is so expensive...what do you get with that how many panels and batteries??

I double checked with my daughter. 38K is not at all unusual. Could be even more if it’s a larger system. Another factor is if the roof was included in the job. Her company does solar and roofing so the loan could be for both.

[LivingAlmostLarge]

I double checked with my daughter. 38K is not at all unusual. Could be even more if it’s a larger system. Another factor is if the roof was included in the job. Her company does solar and roofing so the loan could be for both.

last year there was 30% rebate on it but it still cost a lot. My client paid $43,350 for his panels. I have no idea how much but I saw the cost. My neighbors said $50k, but i'm not sure how many panels. It's just how much things cost. I don't think it has batteries. Online says $13k for 5kw panel average cost where i live. I guess that means like 3-4 panels?

[Fishindude77]

My brother had around $50k in his solar panel system installed a few years ago.
At the time 30% of the install cost could be a tax deduction in year one.

[hehateme000]

Yea, we had initially thought we would pay the student loan off first but we paid off the travel trailer instead. So we were left with just the student loan and now this solar loan.

I have 28 panels, and in summer was producing 40kwh. The house was built in 2020 so panels are still practically new. We live in CA, don’t know how much that changes things as far as solar costs tho. Our tru-up in 5 months is as much as 1 month of electricity at our old house lol. I’m not gonna lie, I look at the solar debt like it’s part of the house but I know debt is debt. It needs to be paid off but the student loan has been hovering over my head for 15 years and it feels so nice to put a huge chunk toward that.