First off: Thanks to all for the kind response to my good news yesterday! I know it can sometimes be difficult to celebrate in others’ blessings, especially in this tough economy, so I appreciate all of the kind words. :)
I had NO idea this was happening. I really am not sure yet how I feel since my workload will almost double in the next few months. But I am excited about the challenge that this new work will bring!
Of course, the first thing I thought of when I heard “raise” was how in the world I will allocate this extra money coming in. And that’s where I’ll need your help! I feel like I am helpless to make decisions without my trusty PF bloggers backing it up. ;) I did some math and will be getting about $185 extra
I would apply it towards debt for 8 months (p.i.f.) then move all money going to debt ($685) towards savings and investments (4 months = $2740).
I would apply it all towards that debt until it’s paid off. Then you’ll be free to do what you want with that extra money that was going towards debt. It sounds like you already have a decent sized emergency fund, so why not stop contributing to that as well – get intense about paying off your debt and pay it off in 6 or fewer months? You can do it!
I would go for a blend of the options you mentioned. I’m not really familiar with the American Retirement Plan options – but I would say, perhaps start making regular contributions to your E-fund (say even $25/month) and put the rest on your debt. Once it’s paid off, re-allocate?
Well, I was automatically gonna say put it all towards your debt….but if you’re not contributing to your 401K, I think that’s where I would start. Does your employer match? I would say put at least what they match in there and if there is any left over, throw it ALL to the debt!! So happy for you still!
we need every penny on daily/ monthly stuff-it sucks!! but at least we have no cc debt (yet) once we start getting more $$ I would save all of it!
Yay! Congrats on the raise! I would probably do a mixture, probably focusing on the 401k and the debt.
Or the clothes… :)
My vote is for debt. Then after it’s gone, you can start saving AND give yourself a good splurge! :)
I would mix it up, but then the amounts would be smaller and sometimes it’s just fun to put a really big amount towards one things…so it’s really up to you!
Since you aren’t in a position where you could lose your job, seeing as how you just got a raise, I would contribute it all to your debt. Get it paid off, put your E-fund on hold, and then go back to saving for your E-fund and retirement after your debt is all paid off.
I’ll be the voice of dissent: I would do the Roth IRA. Once we hit April 15th, 2010, you won’t ever be able to go back and contribute to your 2009 IRA again. I would try and max it out, as best as possible, if you’ve got a good handle on everything else. As long as your efund is growing and you’re making headway on your debts already, I would go for the IRA.
Congratulations! I agree with Bank Gal that you are probably not going to lose your job so you can put your E-fund on hold for a bit. I would do 1/2 to 401K and 1/2 to debt. Contributing to your 401K pretax will also give you a little more total $$ to play with.
Congrats again! I’m kinda pf noob but I would probably do a combination of the IRA or 401K and the debt. You’re losing money on the debt because of the interest and you’re money will be working for you with the investments.
All to debt!!
I would be half towards debt and half towards IRA. It seems like a fun combo. Again, congrats on your successes. :)
Congrats on the promotion. My advice is to pool it all to debt. :)