Question

Hi everyone.  I'm not sure what I am getting back on taxes this year but we got about $4000 last year.Hi everyone. I'm not sure what I am getting back on taxes this year but we got about $4000 last year. I have planned on putting $1000 into emergency, $2000 into car maintenance, and $1000 into home maintenance. Now, I feel like this might not be right. Should I be applying majority of our return on debt and just plan $1000 for emergencies?  

Answer 1

I'm in the same predicament  I think we are going to put $1000 into emergency fund and everything else going to debt I'd rather not pay interest

Answer 2

I think that's going to be personal. I personally would have to apply it to debt. Then you could put what you were putting into debt into savings and watch it grow, to me it makes no sense to throw away money on interest when you could be done with the debt. For sure have 1k for an emergency, but I would list out your debts and pay as many of them smallest to largest first.  

Answer 3

Will your taxes pay off any debts? Or be a significant payment in relation to the amount owed? If not I would fund my sinking funds and apply the amount I was putting towards that monthly to my debt. If it will pay off debts or pay a significant portion would keep 1k emergency fund, pay the debts and then use the money I was using for payments to fund my sinking funds.  

Answer 4

I guess it depends how urgent the car maintenance is? That’s a “four walls” thing as Dave Ramsey would say. How long would it take you to save up the 2k and can you make it there before the car stops working on you? If not, then I’d do the car, emergency fund and then put the rest on the debt. If you can wait on the car maintenance then I’d start that sinking fund now and put the rest on EF then debt.  

Answer 5

For sure emergencies. if one should come up there goes your budget.