Hello! I just saw someone else post something and wanted to give this a try. Our first baby is due in June and we’ve been trying to decide what to do with my next check before our parental leave. Please be kind and constructive, thank you!
Here is some quick context:
Partner : $110k
Bonus: 10% per year
Raises are also granted every year between 3-5%
401k: 5% Matching from company, fully maxed option
FSA: $30/month for transportation
Me: ~$45k-$60k before expenses (changes every year)
I am 1099 in real estate, checks come sporadically so my husband’s income covers the expenses, and my income tops up our savings, baby fund, and any fun things we want to do like guilt free spending or trips. But we rarely have monthly spending money so that’s been a struggle we’ve been trying to figure out. Last year we had about $10k in emergency savings but my husband was laid off from his previous job so it covered our expenses while he was unemployed, luckily it was not too much more than a month and he got this new job.
Right now our emergency savings sits at just: $2500
Home (VHCOL area, want to move from this condo asap due to the fees but the condo market here is doing poorly now):
Mortgage + Condo fees: $2800/mo (fees alone are $968/mo)
Value: ~$255k
Loan amount left: ~$230k
We have brokerage and Roth IRA accounts, but we put those on hold to pay down our loan debt and car:
Total debt: $53k
Total monthly payment: $1752
Credit cards: $23k at 13% ($800/mo)
Personal loan: $16k at 12% ($476/mo)
Car loan: $14k at $16% ($476/mo)
The credit cards and personal loan were used towards our wedding and we’ve paid off about $10k of it since 2024, and our car loan has such a high rate because I didn’t have any credit when I came back to the US after living abroad for a while.
My next check coming in is about $20k, and we were thinking of paying off the car since it has the highest interest rate, then using the rest to upgrade some home appliances before trying to sell the condo. And some postpartum help as we don’t have family around. But I’m also wondering if just taking the whole check and emergency savings and paying off the credit cards makes sense. Is it smart to take what’s in our brokerage accounts to pay off the rest of the debt then using the freed income to replenish the accounts over time? Should we put it all to savings?
After this check, I have roughly another $45k coming, but these aren’t finalized yet so I’m just focused on how to make the most of the $20k.
We’ve been debating if I should get another job, but the best thing about mine is that I can stay home with the baby and we won’t have to pay for day care. I have a pretty flexible schedule, so I can make a stricter one to match the new lifestyle. A lot of my co-workers bring their dogs and children to the office and even to showings (not that I’d do it every time). My leave is 7 months until January next year.
We’ve struggled a lot trying to figure out how to quickly pay the debt and move forward with our saving and investing. With my husband’s income maxing out at the monthly expenses and my income being so sporadic it’s just taken a while. My co-workers say things like “credit card debt is normal! Rack it up in the winter and pay it off in the summer when the market is good” or “take out a loan to help boost your marketing!” I think all of these are unhealthy, and I don’t want to stay stuck in a cycle of bad debt.
Please kindly let me know your advice and if you have any other questions thanks!