I don’t have anyone in my life I can ask about this so am hoping this board of internet strangers can weigh in. I’m married with three kids, and my spouse and I both have stable jobs. We own our home, and our mortgage is well within our means. We both drive 10-year-old paid-off cars. Recently, due to the sale of a (small) second property in a hot market as well as an unanticipated bonus for my husband, we realized that we’re going to come into $100,000 in additional income this year. I grew up on food stamps and while I’ve come a long way since then, this is more money in a lump sum than I’ve ever considered before…it’s truly mind-blowing to me.
We’ll spend ~$10K to pay off my undergraduate student loans and a recent medical bill, but once that’s done our only debt will be our mortgage.
We had to take our savings down to about $5K this summer in order to renovate the property to sell; $10K represents one normal month of expenses for us. So my first step is to replenish our emergency fund. In a typical month we save between $1,000 and $2,000 of our take-home pay, so we’ll continue to build it that way as well.
My question is…what else should we do with this money? We’re doing pretty well on retirement savings — I’m of the mindset that we could always put more away, but we have “enough” (whatever that means) given our ages and when we plan to retire. We need to start paying more attention to our kids’ college funds. I’d like to do some home improvements — we need new windows, paint, and trim on the outside of our house; redoing the kitchen and master bath are in the longer-term plan; husband wants a pool (I know, I know!).
I think part of my angst is parking a large sum of money in an account where it will only make ~1% if that, due to such low rates. Maybe there’s a better place for us to put our emergency fund? Or should we hoard it all right now/no home improvements?
Also if you have a pool and live in a temperate Midwestern climate I’d love to know more 🙂