My dh just reenlisted today for another 4 years in the military and he gets a bonus of $10,000 in a lump sum payment! Now, we can pay off all credit card debt and a car loan!!!! Since we won't have the minimum and monthly payments, we will have an extra $400 a month in our pocket! We are also going to use the rest of the money to do a little work on my dh's truck and buy a new living room suite. We badly need sofas - after the fire last year, we've been having these old sofas that we found out on the curb, LOL. We're going to get leather sofas - it will be easier to keep clean with the three boys.

We were planning on using our tax return next year to pay off some of this debt. Now we can use that money as a down payment (along with a trade-in of our current car) to buy a minivan that we so desperately need. We are probably going to buy the new Saturn Relay minivan. (We are die-hard Saturn drivers)

We are going to put $300 a month of the $400 extra a month we will be getting into savings!

This is such a blessing. We've really been needing this.

By Happynerdmom on Monday, November 15, 2004 - 02:54 pm:

That's awesome, Amy! Isn't it such a relief? It sounds like you're really going to make a lot of good choices.

By Boxzgrl on Monday, November 15, 2004 - 04:00 pm:

Good job, and congrats on the reenlistment Mike!

Thats exactly what DH and I did last year. Bought a complete living room set and paid off all our credit card debt and went on a nice vacation! And we still had some left. ITs always nice to have extra money. So, now that you'll have this extra money, how about starting a retirement account, 10% of all earnings??? Now I sound like my Mom!!!

By Debbie on Monday, November 15, 2004 - 06:18 pm:

Good for you!!! We paid off all our debt (except for our house) last year. It is a great feeling.

Congrats to Mike for reenlisting. I think it is a wonderful thing he is doing!

By Bea on Monday, November 15, 2004 - 06:32 pm:

HOOAH!!!!!

By Andi on Monday, November 15, 2004 - 06:34 pm:

That is a dream come true!! Congratulations!

By Annie2 on Monday, November 15, 2004 - 06:34 pm:

Congratulations! It's a great feeling!
I would also look into a pre-paid college program for the boys. We live in FL and have our kids' tuition paid in full plus their first year's room and board. They can also transfer this to other states as well. Definitely something to check into with some extra cash coming into the home. It will save you so much more in the long run.

By Juli4 on Monday, November 15, 2004 - 06:40 pm:

Congratulations on becoming debt free. I would suggest a money market account at first and then a growth mutual fund to put it into savings. You will get the most return and a hundred a month for i think 40 years into a good mutual fund and you will have a million dollars to retire on. Most people don't realize that they can retire so well. my dh and I are big dave reamsey listeners and I highly reccommend him.

By Jelygu on Monday, November 15, 2004 - 07:29 pm:

Congratulations! It will feel so nice to be debt free!

By My2cuties on Monday, November 15, 2004 - 07:34 pm:

I am so happy for you, that is SO awesome!!

By Kernkate on Monday, November 15, 2004 - 08:51 pm:

Amy that is such great news for you Its always such a nice feeling to get out from the bills!
And a new couch! I just bought a new sectional after having my old one for 14 years and 5 kids abusing it1 Its so nice to get new things for the home. Especially after what you guys went thru!

By Karen~moderator on Monday, November 15, 2004 - 09:16 pm:

WTG Amy and Mike!

By Bobbie~moderatr on Monday, November 15, 2004 - 09:34 pm:

Sounds like you are having some luck yourself... LOL YEAH!!

By Cybermommyx4 on Monday, November 15, 2004 - 10:19 pm:

Congratulations! That will be a burden lifted! And I can't imagine how nice it will feel to have new living room furniture! (We had one *new* set when we built our house in 1989, but that was when we only had one child, lol! We've been through several since! DH has a friend at work (a really nice older woman) who has her own cleaning service. She cleans condos. Whenever the owners feel like redecorating (often, apparently...) they tell her to take the old furniture and *get rid of it*! It usually looks almost new! So she distributes it among friends and family. That's how we got our sectional sofa and our pull-out sofa we have now. I can't imagine having enough money to redecorate that I just toss out a perfectly good couch! Oh, well - lucky for us someone is able to do that, lol! Have fun picking out your furniture! AND your new minivan, too! You definitely need one of those ;)

By Pamt on Monday, November 15, 2004 - 10:50 pm:

Wonderful!!! We had a little windfall like that a few years ago and it was wonderful to get rid of a couple of credit card bills and pay off our car. We've been married 14 years and are still operating with mostly hand-me-down furniture though. We bought a leather couch (good choice, btw) and a glider rocker and everything else we have is hodge-podge, except the boys' bedroom suites and our computer tables were handmade by my FIL.

Have fun shopping!!

By Christylee on Monday, November 15, 2004 - 10:51 pm:

That is wonderful! Happy Shopping!!!

Christy

I'm a die hard saturn driver too!

By Ginny~moderator on Tuesday, November 16, 2004 - 06:12 am:

Wonderful, Amy. I suggest that you start checking out some mutual funds, like Vanguard (the one I know) and find out what their minimum is for opening a mutual fund account. Then, when you have twice that amount in your savings, take that minimum amount and open the mutual fund, and then put $200 a month into the savings account (until you have enough for minimum balance for the bank money market account Juli suggests) and the other $100 into the mutual fund. Then, when your money market account reaches an amount equal to three months income, start putting half into the money market and half into the mutual fund.

Funds like Vanguard and Dreyfus (another name I remember) have a variety of mutual funds to select from, ranging from the most conservative (Federal treasury (sp?) notes) to somewhat risky stock market funds. The ones I have heard touted as the best for long term are those funds which "indexed" to the stock market. I know that Consumer Reports runs an in depth article each year evaluating mutual funds and you can probably find the most recent such article at your local library. I'd think of the mutual fund money as money that almost doesn't exist, to be used only in the most dire emergencies (not for buying furniture, for example, but maybe for a downpayment on a car if you have no other funds available and you are desperate), so that it just grows every month without your having to think about it. It is amazing how that kind of money grows when you just leave it alone, and as it grows you get a sense of satisfaction that makes saving easier and makes it easier to just leave that money alone.

Here is my reasoning: All investment advisors recommend having three months income readily available, as it would be at your bank. But, putting some money in a mutual fund makes it a bit harder to get to so that you won't touch it except in dire emergencies. Oh, and if you have access to a credit union, they often pay much better interest than banks.

In general, if you can get to a point where you have at least $1000 where you can get it quickly in case of emergency, it gives a great feeling of security, but only if you are the kind of people who won't tap that emergency fund for day-to-day stuff. The trick is to think of that $300 a month as money that doesn't exist except for saving, as if it weren't "real" money.

Finally, I recently opened an account with Ing Direct, which pays better interest than banks, is FDIC insured, and will do wire transfers to and from your bank account at no cost. You can read about them at ingdirect.com.

Annie's advice about prepaid college funds for the boys is also something to think about, but only after you have built a nest egg for emergencies.

By Eve on Tuesday, November 16, 2004 - 07:21 am:

That's wonderful, Amy!!

By Conni on Tuesday, November 16, 2004 - 07:35 am:

YEAH!!!! Good for you guys! That is really cool!!

By Karen~moderator on Tuesday, November 16, 2004 - 07:36 am:

DEFINITELY think about those prepaid college funds. I have been regretting NOT doing that for several years now. That time will be here before you know it. NOW is the time to do it.

By Tunnia on Tuesday, November 16, 2004 - 08:08 am:

I know you must feel a tremendous relief being able to pay off all your debts and have money left over to boot. WTG

By Yjja123 on Tuesday, November 16, 2004 - 09:54 am:

Just a note on prepaid college plans, God forbid, if you have an emergency you can withdraw the money. You get it within a weeks time. We had to do that a few years ago and signed back onto the plan 2 months later. It is a last resort but it is comforting to know that there is money available in case of an emergency. Our plans are through the Florida prepaid college program.
Yvonne

By Fraggle on Tuesday, November 16, 2004 - 10:07 am:

That is great news Amy!

By Insaneusmcwife on Tuesday, November 16, 2004 - 11:11 am:

Thats great news, Congrats on re-up.

By Cat on Tuesday, November 16, 2004 - 12:41 pm:

Amy, that is such great news!!! We just bought new living room furniture this weekend (old stuff was literally falling apart!). We figured if we were going to spend the money we were going to get what we really wanted. So we ended up getting a sofa and loveseat, both duel recliners, micro fiber (what they call elephant's skin--prewashed) and what's really cool is they come apart! The backs don't come off. They actually break apart into individual seats. There are bars on the bottom that come off. That will be extra nice since they're going in the family room in the basement! They're being delivered tomorrow and we're very excited. This is our first major furniture purchase and we've been married 12 1/2 years. Have fun getting new furniture for your place!

By Amy~moderator on Wednesday, November 17, 2004 - 01:04 am:

Thanks so much everyone for your enthusiasm! A special thanks to Ginny, Juli and others who gave me some good tips of how to invest the extra money each month. I am seriously considering following Ginny's advice to a T, and plan to do some research. Once again, thanks to all of you. I can't wait to receive the money next month.

By Ginny~moderator on Wednesday, November 17, 2004 - 06:47 am:

Amy, the most important part of Ginny's advice is to do some research. The second most important is to find ways to put some of this money you will be saving in an account or program where it is not easy to tap on impulse.

Check to see if the military offers any financial advisors. Be wary, though, because I have read recently of programs which have gotten permission to give "financial advice" on military bases where the advisor is really a salesman pushing a particular product - often annuities, which are generally far down the list of good investments for rate of return and size of commission to the salesman.

I was really pleased, by the way, to see that you are going to defer the gratification of buying a new car until you get your tax refund. (By the way, is this $10,000 bonus taxable income? Be sure to check that out.) Learning to defer gratification is one of the best tools for building saving habits. Do check out the best place to get a car loan - it may well be your bank instead of through the dealer. Again, check out Consumer Reports on how to buy a new car. While I was at the library checking out their reports on used cars a few days ago, I believe I saw just such an article in an issue from some time in the past year. You can also check out your Saturn and other, similar vehicles in Consumer Reports - they check out new cars vigorously, for safety as well as a whole bunch of other factors. Do your research! I have heard mostly good about Saturns, but vans and minivans have rollover risks that most other vehicles don't have and I know Consumer Reports checks that factor and child safety issues very carefully. Trina may also have access to information about which vans are best in terms of child safety, which will usually translate to adult passenger safety also.

By Conni on Wednesday, November 17, 2004 - 09:55 am:

Amy, can I suggest something?? There is a site www.daveramsey.com. He has a daily radio show you can listen to online, you can find a church and take his class, and you can read his books (i suggest borrowing them or finding them at the library)...

He makes some intersting points about money, having a financial plan and following it, having a retirement plan, etc... He is also pretty funny. He even has a youth program that they are trying to use in some schools to teach kids how to steer clear of debt and save money.

It might not interest you at all tho! I really enjoy learning about spending wisely, saving, investing, living within my means, etc.

By Rayanne on Wednesday, November 17, 2004 - 02:21 pm:

That is great news.

By Amy~moderator on Thursday, November 18, 2004 - 01:52 pm:

Juli and Conni, I will definitely be checking out Dave Ramsey - thanks! I've heard of him before...