(Closed) Household Budget Dilema – what should we do

posted 6 years ago in Married Life
  • poll: What should we do?

    Put the entire $350 on your debt and worry about repairs later

    Put the entire $350 in the savings account, better to have the money just in case

    Split it 50/50 half in savings half on debt

    Build the savings to an safety net then put it on debt (tell me how much you think we need!)

    I have another opinion - I'll tell you!

    I just like polls

  • Post # 2
    Member
    2689 posts
    Sugar bee
    • Wedding: May 2015

     Personally, I think it’s smarter to pay off debt then to put money away in savings. That also depends on the interest rate you are paying on said debt.

    As well.. that figure , IMO, is way inflated. I have a much older car than you – at least 7 years older and in the 3 last years I’ve only had to change my brake pads (100) and the radiator blew (300) – this is other than oil changes.

    (maybe you can split between the two ideas)… put some in a car fund and use the rest to pay of debt. Seems like an easy compromise to me.

    Post # 3
    Member
    9575 posts
    Buzzing Beekeeper
    • Wedding: September 2015

    I think id compromise and do 50% to car fund, 50% to debt.

    Post # 4
    Member
    21 posts
    Newbee
    • Wedding: December 2010

    i voted half savings/ half debt. I would do this until my savings could cover at least 3 months worth of expenses, then I would consider using 100% to pay off debt.

    In practice, I kept splitting 50/50 even after I reached 3 months worth of expenses. It’s taken longer for me to pay off my student loans that way, but it worked for me.  

    Post # 6
    Member
    3031 posts
    Sugar bee
    • Wedding: May 2015 - Walnut Hill Bed & Breakfast

    Have you needed any *big* repairs lately? Is the car reliable? Do you have any reason to think it’s suddenly going to go downhill? Do you take good care of it? Do you take it to the dealership (so expensive!!) or a smaller local shop? How much do you usually need to spend on repairs?

    I have a 2010 MINI Cooper with 96,000 miles on it. Typically these cars are “problematic” but I’ve taken good care of it and haven’t had any big issues. Certainly no repairs over $1,000 – just basic wear and tear items. I also have a 2001 Honda Civic with 114,000 miles on it. Which I’ve also been lucky with – but it is starting to show it’s age in terms of rust (thanks, pennsylvania winters!) which needed to be patched this past summer – but since I only drive this car in the winter and don’t care that much how it looks, I didn’t put the money into it to have it done “pretty”.

    I think it’s really important and will save you tons of money in the long run to pay off your debt first. Maybe put $50/mo into your car fund and $300/mo towards to debt. If you need to use the car fund for a repair, then use the $350 to replenish back to your usual $1,000. Then switch back to the $50/$300 split. 

    • This reply was modified 5 years, 11 months ago by  amberback.
    Post # 7
    Member
    5408 posts
    Bee Keeper
    • Wedding: June 2014

    I agree with PPs and would do half car fund/half debt. That way there won’t be resentment down the road and at least something is going towards debt. It’s rare that a savings account will haveyou gaining more interest than you’re paying on your debt (although it depends what your interest rate on the debt is) so putting extra towards your debt will help save you money on interest over time. Plus, I think that car maintenance number is pretty inflated. Our car is a 2007 Mazda3 (we got it in 2012) and it currently has 134,000-ish kms on it. Other than oil changes and winter tires we’ve only had to get a new battery and brake pads. I think it’s safe not to put the full amount into the car fund (:

    ETA: I’m sure having the student loans paid off will feel so amazing! Definitely a cause for celebration! I’m working on paying off my OSAP and I’m definitely going to celebrate once that’s all paid off 😀

    Post # 9
    Member
    375 posts
    Helper bee

    I would build up a safety net of about 3 months expenses to use as an emergency fund (which would also cover car repairs) and then put it all on student loan debt. If you feel that a compromise would be best, I would do 70 student loan/ 30 savings. 

    I’m not sure who told you that cars over 5 years old require $150/month in maintenance but that is absolutely nuts. My car is 10 years old and has maybe only required like two things other than oil change in the entire time I’ve had it. 

    Post # 10
    Member
    2176 posts
    Buzzing bee
    • Wedding: May 2013

    I think that I would do something like (considering the entire $850/mth you will have in a few months)

    $100 towards the new car/car repair fund

    $100 towards the house fun/ longer term savings/ just in case fund 

    $650 towards the rest of the bills (CC or whatever other debts)

    (in the short term until the $500 is available I would probably do $100 to the car fund and $250 to the bills)

     

    likely your credit cards are like 20% interest or so and getting back 2.5% is nothing compared to paying that out so I would start to build up a savings (just so you don’t have to run to a CC for every little mishap) but I would mainly concentrate on wiping out those bills

     

     

    Post # 12
    Member
    1976 posts
    Buzzing bee
    • Wedding: October 2013

    I agree with PP’s…I would put the majority onto the existing debt and probably $100 into a ‘car repair’ fund.

    Post # 13
    Member
    9541 posts
    Buzzing Beekeeper
    • Wedding: August 2013

    If the debt you would be paying off is credit card, I’d put all the money towards that. That way you’re definitely paying off the credit card debt you already have with only the small risk that something goes wrong and you’ll have to take some of that credit card debt back. However, if the debt that you would be paying off is student loans, I’d split it 50/50 until the money in the car fund reaches a certain amount ($1000-$2500?) and then dump it all into debt.

    Post # 15
    Member
    1228 posts
    Bumble bee
    • Wedding: March 2014

    I’m a big believer in the (at least) 3 month emergency fund.  Without it, minor inconveniences (new winter tires in Canada are $$$$$) become emergencies and misfortunes (your company announces a big round of lay-offs) become major crises.  

    If you already have that, then I’d put 100% into debt repayment.  I wouldn’t bother with a separate car fund and emergency fund.   

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