What To Do With a Holiday Windfall?
My fiancé and I made out like bandits this Christmas - I’m not sure if its because everyone knows exactly how broke we are due to this site, or if this was just the year that everyone decided to give money in lieu of other gifts, but between the two of us we ended up with $900 worth of cash and gift cards.
The question before us now - what do we do with it? We would be demonstrating remarkable maturity if we would use the cash to pay off debt, but that’s no fun, and besides - we have several major household purchases that we have been putting off due to lack of funds.
One of the things that we put on our holiday wish list this year was a snow blower (our driveway is steeply sloped and a pain to shovel), and I’m quite certain that the $200 home improvement gift card my beloved received was intended to be spent on just that. One problem with going that route: the store that this gift card is for is sold out of the model of snow blower that we want and they won’t be restocking again this winter (this really has me befuddled - it’s December in the Upper Midwest! - I have a hard time believing that we’ve already experienced the worst this winter has to offer). So, we have a $200 gift card to a store that is not a national chain and we need to decide what to spend it on.
We have come up with the following options:
1. Patio Door. We need a new patio door to replace the existing slider that is beginning to fall apart thanks to the elements and repeated improper use by our dog (she is very smart and has learned how to let herself in by pushing on the door frame). We’d like to put in French doors - at a cost of $1000 - $1500. Clearly, this is significantly more than we have to spend, but it’s a real need as the existing door is beginning to rot.
2. Deck. The back of our house has several large oak trees and it’s difficult to grow a nice lawn with all of that shade. The previous owners’ solution was to put in an 800 square-foot deck to cover most of the ground. The deck was very well-done and is nice for entertaining, but according to the neighbors it’s over 15 years old. Last summer it became evident that its days were numbered as we discovered that carpenter ants have made the deck and the surrounding railroad ties home. The whole mess needs to be ripped out and replaced. We haven’t figured the total cost yet - for fear of sticker shock - but I’m certain that it will be significantly more than that of the afore mentioned door.
3. Fridge. We could also really use a new refrigerator. The one that came with the house is dying a slow and miserable death (miserable to us due to the fact that it has begun dripping water and leaking and freezing and creating a huge mess). We’ve put off replacing it for nearly a year now, trying to get the last bit of life out of the darn thing. I’ve done some looking online, and it appears that we can find a suitable replacement for $800 - $1400.
Choosing any of the above mean blowing more cash than we received for holiday spending, but all will probably need to be purchased within the next year or so. Ain’t home ownership grand?
There’s one more option that we’ve discussed:
4. Wedding Fund. $150 of the cash we received was specifically ear-marked for the wedding, so I will deposit that into my wedding savings account at ING. We could also deposit the remaining cash ($550) into this account and spend whatever we have left over from the wedding on home improvements. The only problem with this solution is that it leaves the $200 in gift certificates hanging out, losing value after six months. I am sure that my fiancé could find a way to blow $200 on tools, but I would prefer to be more thoughtful and put it towards something that we really need (e.g. options 1-3).
What’s a couple poor of pathetic homeowners to do with such good fortune? I’ll let you know when we make a decision. Until then, I welcome your thoughts.
Stumble it!
December 30th, 2007 at 9:34 am
Wow, that’s not an easy one. I think the wedding deposit is a good move. And can your fiance buy a snowblower ahead of time? Like reorder through the store…so that once they come in he’ll get one?
December 30th, 2007 at 10:05 am
Do you really *need* an $800-1400 fridge? Both of ours were less than $500. They’re nothing fancy, just a top freezer and bottom fridge (the ice maker seems to come standard now).
I also think Mrs. Micah is onto something - save the $200 for next season and keep shoveling this year. It sucks, but so does not having money/being in debt! In due time, you’ll have all the things you need/want.
December 30th, 2007 at 12:02 pm
My impression is that you are well meaning, but I honestly do not think you are serious about digging your way out of debt. Look, I’m not suggesting that you suck every single joy out of life, but based upon the potential options in your post, I think you are kidding yourself:
1) Patio Doors - I suspect you are not talking about the screen, but the actual sliding window door? Aside from my own struggle to imagine a dog could break such a thing, unless it doesn’t work, then leave it alone. I’ll leave the mention of the French doors alone…assume you aren’t even serious given your financial situation.
2) Deck - it doesn’t sound like it’s broken and although I’m no expert, I’m guessing there are inexpensive remedies to control ants? Worst case scenario - build it yourself. Otherwise, it’s another “want”, not a “need”.
3) Fridge - I don’t really know how old it is or what condition it is truly in, but you made no mention of trying to fix it? Further, as suggested by others…a fridge can be had for well less. Of course, it all depends on how one defines “suitable”. If it really must be replaced, by all means do so, but I (and others) suspect it could be done for much less than you suggest.
4) Wedding Fund - This is a tricky one as it is not just a financial decision, but also an emotional one. Unfortunately, just like you can’t know what its like to have children (assuming you have none), you can also not know how you will feel about your money decisions for your wedding 10 years from now. For example, I spent several thousand dollars on my wife’s engagement ring when we were married. Does she love it? Absolutely. After 10 years of marriage, would she be equally happy with a good looking fake and have used the money for something else…absolutely. Again, I don’t know if she would have felt that way 10 years ago…I’m just trying to encourage you to really think about what’s important. In particular, really think about that trip to Ireland. First, I absolutely encourage you to have a great honeymoon (you will remember it). However, could a honeymoon to a cheaper destination (ex: Mexico) provide the same fulfillment? You can always go to Ireland later…when you are more financially able to do so. Again, THINK about it.
Perhaps my little note seems a bit harsh. I recognize I do not really know you and only see the very small glimpse that you give us. However, like many readers, I truly would like to see you succeed. Unfortunately, what this post communicates to me (my perceptions) is that you are still struggling with your 20-something mentality while dealing with a significant debt load…and it is a bit frustrating to this reader.
Wake up (get your financial priorities)
Suck it up (shovel the damn snow and live with less)
Get on with it (we know you can do it!)
Again, my intent is not to offend, but also not to coat with sugar.
All the best.
December 30th, 2007 at 5:43 pm
Wow PF, you are right, it came off a bit harsh!
As far as a 20-something mind goes, I am 38 and getting my house in order, wish I had done it in my 20s!
With these sort of windfalls, psychologically for me I like to mix a bit: Spend, Save short-medium term and Long term.
Maybe take a 1/3rd approach to each.
On those other projects, while you are working your steps to financial freedom, you will have projects that need to be done (door, deck, etc.) as long as you don’t get into debt with them…great! make them part of your budget!
For me taking a too drastic approach whether in finance of dieting, leads to failure…might just be me, but everytime I say I will never again spend any unbudgeted funds, I do OK for awhile and then blow it.
You are doing great! The first step is recognizing the problem of overspending (you have) second is to get a plan (you have) and last work the plan (you are!)
All the best in attaining your dreams, but it is a marathon not a sprint!
December 31st, 2007 at 9:27 am
I appreciate everyone’s feedback - I figured most of the comments would be more like pf’s. As far as the snowblower goes, it’s a lost cause this year (I was told at one store that the inventory of snow throwers that was meant for my area got re-routed to Oklahoma). In my defense, our driveway is so steep that when it gets slick, it’s trecherous, and I have fallen while shoveling many times.
The one thing I don’t mention in my post but is a very real concern is the resale value of my home. I work in an industry where it is common to change jobs often - I fully expect to be moving to a different city sometime in the next three years or so. In a market where homes are taking longer to sell, features like nice appliances and French doors can make a huge difference in how long a house sits on the market.
@pf-the wood on the patio door is rotting off the glass and there is a gap between the door and the wall that does not seal. Everytime my dog lets herself in or out, she makes that gap larger. The door absolutely needs to be replaced. A like replacement will cost no less than $500, plus labor. For a couple hundred more we can get French doors and add a feature to our home that may help its resale value.
The beams that support my deck (it’s barely off the ground) are also rotting and there are several soft-spots throughout. Last year, my dad (who was on crutches at the time) put his crutch right through a plank while walking. The deck is becoming unsafe and will need to be replaced within a year or two, max.
As far as the wedding goes - we’ve already decided to put off a honeymoon until our credit card debt is paid off. We are trying to do everything in the wedding as inexpensively as possible, and we’re making lots of non-traditional choices in light of that - but we’re still going to have to come up with $5 or $6k. I’ll write more about the wedding budget in a future post.
Again, thanks for your comments and advice.
December 31st, 2007 at 1:51 pm
My suggestion is: put the wedding money in the wedding money fund. The home improvement card - don’t your home improvement stores carry low-end refrigerators? I would put that plus other money toward a refrig. because a) you don’t want to lose food (wasting money) and b) your power bill will be much lower because new refrig.’s are much more energy efficient (save money).
Otherwise use the wedding money (plus some) for at least a short honeymoon in a different location. It will make a big difference in your memories. ( Just don’t spend extra for honeymoon clothes, luggage, etc.)
What does your fiancee want to do?
December 31st, 2007 at 3:05 pm
I agree with racerx. It’s always tough to decide how to use a windfall, dividing it into categories is a great idea.
Also, remember that if you’re going to have a wedding and invite guests, you are going to be registered at stores and you’ll be receiving gifts and probably a bigger windfall.
I don’t know what you’re relationship is with your parents, but as a parent, if my kids were to ask for money towards a large appliance as a wedding gift, I would be inclined to oblige them.
December 31st, 2007 at 4:37 pm
Oooh, I really like wealthy’s idea of asking the folks for the refrigerator. If they weren’t planning on giving you that much, maybe they can chip in with the other set of parents or some siblings???
January 1st, 2008 at 4:58 am
I think that you need to keep thinking on this for a little while longer.
If you didnt know that you were going to be getting it, then you shouldnt really miss it if you choose not too spend it, right?
I would say put it into your savings account until you really know what you want to use it for. I am not sure how much is in your emergency fund, but this would be a good start.
You may want to save that gift card for the same reason. Who knows when a lot of light bulbs will go out, or you may have a household emergency that it could be perfect for.
Hope you find something to do with it
January 1st, 2008 at 2:37 pm
I agree with the post by 20 Something Lady. I think you should sit on the decisions a little longer. I tend to be impulsive with money spending but I find that if I wait on purchases, I make much better choices. Pf was a little harsh but his comments give those of us struggling with overspending something to think about! I look forward to reading your future posts. Best wishes!
January 1st, 2008 at 5:44 pm
I just got engaged and am in the beginning stages of wedding planning…I applaud your decision to hold off on the honeymoon until the cc debt is gone!!
Can’t wait to hear about what you’re doing to save money on the wedding…I’m really struggling!
January 2nd, 2008 at 12:28 pm
ei, congrats on the windfall! couple of weeks ago you were sighing about having no holiday bonus, and now you have a happy surpsirse. =)
suggest you allot a portion for savings (the wedding fund?) a portion for house necessities and a bit for fun money. the percentage is up to you.
January 3rd, 2008 at 2:15 pm
Hi Banker Girl,
I see a lot of me in you. I’m struggling with debt, with putting it all out there, with unexpected windfalls, with “responsible” decision-making, etc.
I think there are two things to consider with this post. The first is that Christmas was only a few weeks ago, so it’s too soon to make the decision on what to do. As someone posted above, if you weren’t expecting it, you wouldn’t notice it if you didn’t spend it. So put it in savings, and take a really hard look at the things you need to get done around your house.
The second thing is that no matter what decision you make, someone will have an issue with it. So do what feels right, but make sure you do it with awareness.
In terms of changing jobs (I worked in finance before my current job) - it’s common, but is it necessary? I could have stayed at my job for 5-10 years if I’d wanted without negatively affecting my career. Also, in 3 years, the housing market could be different, or you might find good renters. Who knows.
In any case, good luck deciding! Whatever you do, it’ll be well worth it!
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