Jump to content

What to do with the money?


  • Please log in to reply
32 replies to this topic

#1 money

Posted 23 January 2013 - 09:51 AM

Hi All

long term member going anon due to the nature of the topic.

DH and I have recently been told we will be receiving a large portion of money from our grandparents will. Im estimating this to be between $50-$100k most likely about the $80k mark.

The only debt we have is our rather large mortgage of approx $430k.

Our house is brand new but has no landscaping. We have 1 child with another on the way very soon.

What would you do with the money? Do we lump it all on the mortgage to reduce our current debt? Do we use it to finish the house, spend a little on upgrading one of the cars and getting solar, put the rest on the mortgage to reduce our current living expenses?

What would you/should i do?

#2 HRH Countrymel

Posted 23 January 2013 - 09:55 AM

I'd sit it in the mortgage offset account - then go from there.

You get the same benefit as if you HAD paid it off your mortgage but it is still there to spend if you want to.

#3 Justaduck

Posted 23 January 2013 - 09:58 AM

I would be getting the solar, as it in a way is an investment in the long run & will mean you have an extra $400or so a quarter from not needing to pay electricity bills.
I would probably put some of it in an account for both of the kids & some of it aside for emergencies too.
If there was a need for a newer car (ie frequently breaking down, getting a bit small) I would look at replacing it.

Can you put it in an offset account that has free and unlimited redraws?


#4 CallMeFeral

Posted 23 January 2013 - 09:58 AM

I'm someone who would always put it on the mortgage. I HATE paying interest. Have you done one of those interest calculators that shows you how much you would save over the life of the loan with $80k extra in there?
Especially with another child on the way, reducing your interest repayments should serve you well. I'd save improvements on the house etc till when you are not in such a financially precarious situation as being on one income with a large mortgage.

ETA. I'm assuming you have mortgage redraw or offset so that you could withdraw it later anyway

Edited by CallMeAliG, 23 January 2013 - 09:59 AM.


#5 50ftqueenie

Posted 23 January 2013 - 10:00 AM

Our mortgage is about $330k and we would also just put it in the offset account.

(we would probably blow some of it on a luxury weekend away for the two of us, and a cheaper beach holiday with the kids)



#6 BadCat

Posted 23 January 2013 - 10:00 AM

Depends on whether you are getting by on the money you have.  If you will be able to afford the landscaping and whatever else without that money then I'd just throw it straight at mortgage.

#7 suline

Posted 23 January 2013 - 10:01 AM

I am with countrymel- straight into the mortgage offset, even if it is untouched for a couple of months, then you put a little towards say the landscaping - the reduction in your interest on your mortgage will be significant.

While it is sitting there reducing your mortgage you can make a good plan about where you want it to go.

#8 Julie3Girls

Posted 23 January 2013 - 10:01 AM

Yep, straight into the offset account.
Then I would gradually do the things that we needed with the money, like the solar and the landscaping.

#9 *-*

Posted 23 January 2013 - 10:03 AM

QUOTE (countrymel @ 23/01/2013, 10:55 AM) <{POST_SNAPBACK}>
I'd sit it in the mortgage offset account - then go from there.

You get the same benefit as if you HAD paid it off your mortgage but it is still there to spend if you want to.


Where is the like button??

#10 MintyBiscuit

Posted 23 January 2013 - 10:09 AM

If it were us in our current situation, I'd spend it on the landscaping, pay off the last of our personal loan and credit cards, and put any remaining on the mortgage. In our situation, paying off those last debts would free up a huge amount to pay extra on the mortgage, and while the idea of reducing the mortgage quickly is lovely, I currently have a crappy backyard and really want it sorted. We don't have an offest account so it wouldn't be an option for us, and we have a fixed rate for another 18 months so while we can pay extra on the mortgage we can't pay that much extra. I'd rather improve our standard of living now and set us up to smash the mortgage in a little while.

But obviously that is very specific to my situation original.gif

#11 EsmeLennox

Posted 23 January 2013 - 10:12 AM

Yep, straight into the mortgage or mortgage offset and then think about how to use it. With young children the landscaping would be pretty high on my agenda, but I wouldn't go mad just because I now had the money, IYkWIM.

#12 A Tiny Hedgehog

Posted 23 January 2013 - 10:14 AM

Pretty much in agreement, solar panels and then mortgage offset. There's very little else you could immediately do with the money that would make as much of a difference.

#13 Leggy

Posted 23 January 2013 - 10:29 AM

First off, look up the mortgage repayment calculators that PPs have mentioned and play around with different figures. Seeing how much faster you can pay out your mortgage with various lump sums may change your priorities.

I would put in solar first - we did this last year and don't have to pay electricity bills anymore.

Then I would put aside 3 to 6 months' worth of expenses in a saving account (I work in a career where serial 1-year contracts and consequent job uncertainty are the norm, so this might be less important for you guys). You could also do this in your mortgage offset if you have one, but be careful it doesn't get spent by accident.

Then, if you already have a mortgage offset account, I'd put the rest into that while you decide what you want to do with the landscaping, and then redraw a bit to get it done. As PPs say, with littlies it would be good to have a pleasant garden to grow up in.

If no offset account, I'd put a chunk straight into the mortgage, and keep the rest in a high-interest account until you've decided what to do about the garden, then transfer the rest onto the mortgage.

Maybe also a holiday if you haven't been away for a long time, what with young kids and buying a house - a couple of weeks at the beach can do wonders for your sanity original.gif

#14 RainyDays

Posted 23 January 2013 - 10:34 AM

I'd spend what you need on the landscaping, and put the rest on the mortgage.

#15 Bluenomi

Posted 23 January 2013 - 10:42 AM

What Country Mel said. Stick it on the mortage and when spend some time thinking about what to do with some/all of it.

#16 Always amazed!

Posted 23 January 2013 - 10:44 AM

If I got $80k in your situation I would

Put $50k to offset the mortgage
$30 towards solar, landscaping,holiday,upgrades on anything that NEED replacing and get upto date with bills ect
That way I would get to enjoy some of the money whilst still putting a large chuck on the mortgage

#17 Jembo

Posted 23 January 2013 - 10:51 AM

I would put it all to the mortgage/offset and reduce the debt.

#18 I'm Batman

Posted 23 January 2013 - 10:59 AM

Id go the solar, Id do the backyard for the children so its safe and tidy, so lawn and a few trees plus a cubby house and then the rest on mortgage.

Your mortgage is pretty large, I wouldn't be comfortable unless It was reduced to the point where it would be covered on 1 wage.

#19 Lainskii

Posted 23 January 2013 - 11:29 AM

http://www.mortgagechoice.com.au/home-loan...calculator.aspx

use this calculator to see how much you will save on your mortgage. Even if you redraw some, a few months will $80000 will reduce the principle of your loan.



#20 F1widow

Posted 23 January 2013 - 11:31 AM

Since the money represents around 20% of your remaining mortgage, I would actually seek financial advice.

To me, it would depend on the following factors:

interest saved vs potential interest gained by investing
any disadvantages of making a lump sum payment to the mortgage?
how tight are you incomings and outgoings now? (rhetorical question)
weighing up your goals with any opportunities/threats

Also, if you were going to spend some money on landscaping, solar, new car etc I would do so without considering any gain. As in, set a budget for these expenses based on your current situation not on your future one. This will ensure that the $80k is a real gain.

From a purely emotional perspective and without knowing the full circumstance, I would do the landscaping and solar, then put half (of the remainder) on the mortgage and half in savings for a rainy day.

#21 Freddie'sMum

Posted 23 January 2013 - 11:33 AM

Give it to me  ph34r.gif

(I'm being silly of course)

Agree with the PPs - do you have a mortgage off-set account ??  If yes, I would put it in there.




#22 ~polly~

Posted 23 January 2013 - 11:33 AM

QUOTE (countrymel @ 23/01/2013, 10:55 AM) <{POST_SNAPBACK}>
I'd sit it in the mortgage offset account - then go from there.

You get the same benefit as if you HAD paid it off your mortgage but it is still there to spend if you want to.


This is the best option.  It will hard to get a return on investment (after tax) that is better than not paying interest on your mortgage.

Maybe put half on the mortgage and half on the offset account so you can spend it if you want to

#23 bright*future

Posted 23 January 2013 - 11:36 AM

You don't have to spend it tomorrow (or at all), put it in an offset acct and think about it for a while.

#24 steppy

Posted 23 January 2013 - 11:38 AM

Offset account for me too - reduces interest while giving you time to consider.

#25 hanz33

Posted 23 January 2013 - 11:39 AM

QUOTE (money @ 23/01/2013, 09:51 AM) <{POST_SNAPBACK}>
Hi All

long term member going anon due to the nature of the topic.

DH and I have recently been told we will be receiving a large portion of money from our grandparents will. Im estimating this to be between $50-$100k most likely about the $80k mark.

The only debt we have is our rather large mortgage of approx $430k.

Our house is brand new but has no landscaping. We have 1 child with another on the way very soon.

What would you do with the money? Do we lump it all on the mortgage to reduce our current debt? Do we use it to finish the house, spend a little on upgrading one of the cars and getting solar, put the rest on the mortgage to reduce our current living expenses?

What would you/should i do?

put it in the mortgage





1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users

 

What you need to know about ovulation tests

Most people who are trying to get pregnant know that the best time to conceive is in the few days after ovulation.

Surviving a miscarriage at sea

A cruise with your family is among the most absurd settings for a miscarriage, but it is certainly not the worst.

Mum of three denied tubal ligation because she's 'too young'

A 22-year-old woman who is pregnant with her third child has had her requests for a tubal ligation denied because doctors believe she is too young.

Slapped cheek syndrome a danger for pregnant women

When a pregnant woman is infected, the likelihood that her foetus will be infected is about 50 per cent.

The signs and symptoms of ovulation

If you're hoping to conceive, one of the most important things you need to know about is ovulation.

We all know 'mum guilt' - but what about 'dad guilt'?

I remember the first time I felt mum guilt, within days of having my first child. The feeling was so intense I rang my own mum to debrief, hoping she'd tell me I wouldn't feel this way very often.

Kristen Bell urges mums to be their own superhero

When it comes to motherhood, actress Kristen Bell is her own superhero and she thinks other mums should be too.

Pram review: GB Pockit travel stroller

In a world of ever-shrinking gadgets, it's no surprise prams are getting smaller. We put the record-holding GB Pockit through its paces.

The beautiful Bombol Bouncer is back

The gorgeous Bombol Bouncer is back - and boasts two chic new colours to boot.

Gadgets and accessories for wine lovers

Looking for a gift for the wine lover in your life - or just something for yourself?

Free ticket offer

Pinky Mckay joins us again at the Essential Baby & Toddler Show presented by Blackmores with her expert baby settling advice. Register now for your free ticket.

The adventure doesn't have to stop: here's how to travel with baby

The best part about our outdoor adventures? It makes my husband and I better parents, since we're happier while adventuring.

Woman crashes car to save mum and baby's life

A good samaritan saved a mother and baby from being seriously injured by crashing her own car into theirs.

Should you tell your boss about your postnatal depression?

Returning to work after having a baby can be daunting, and when you're experiencing postnatal depression or anxiety it can seem even more overwhelming.

TV noise can slow toddler word learning, study finds

Background noise from the radio or TV might be making it harder for your toddler to learn learn new words.

Teresa Palmer on her molar pregnancy and 'unsexy' conception

Teresa Palmer is basking in pregnancy glow as she awaits the arrival of her new baby.

 
Advertisement
 

Top 5 Articles

Advertisement
 
 
 

What's hot on EB

For the festival lover in all of us

Pre-book & Save 50%. Get your tickets now for Kidtopia Festival. 7-9 October 2016 Parramatta Park, Sydney.

Why drinking water can be deadly for babies

H2O is one of the necessities of life, but for babies a seemingly harmless amount of water can be fatal.

5 ways having a baby is different when you have older children

So much parenting advice is geared towards having your first baby, but what's it like having a baby when you already have children?

You can now make your own plush Falkor

Fans of The NeverEnding Story – of which there are certainly plenty – went crazy for these plush Falkors when they first went on sale last year.

Baby steps

10 things that will actually happen after having a baby

I thought I had prepared myself for motherhood. Then my baby girl arrived and knocked everything flat.

Having a baby: expectations vs reality

People love to warn you about what to expect when having a baby, but they can be way off when it comes to the reality.

Are we having fun yet? Thinking positively as a parent

Motherhood is wonderful ... except when it sucks.

The adorable smile of a baby seeing his mum clearly for the first time

There is no doubt seeing their child smile for the first time is an unforgettable moment for parents everywhere.

When breastfeeding doesn't go with the flow

Breast is best, except when it's not. And in our case, it most definitely wasn't.

'If you don't vaccinate your kids you're a bloody idiot'

The photos are heartbreaking and almost too difficult to look at, but Kayley Burke is begging other parents to take notice.

Why pregnant women should eat chocolate

In news that will make expectant mums jump for joy - and reach for a block of Cadbury - scientists have revealed chocolate could provide health benefits during pregnancy.

The baby born with an incredible head of hair

If you're in any way challenged in the follicle department, prepare to feel a jolt of envy - at a two-month-old baby.

The push for Medicare to fund lactation consultants

While meeting with a lactation consultant can make an enormous difference to a new mother, it's not a service that is available through the public health system.

Parents, this is how to cut grapes to avoid choking

One mum has learnt a harrowing lesson about the best way to cut grapes to make it safe for toddlers and little kids to eat.

Three truths about C-section mums

Lately I've been thinking about the caesarean stories and the brave women who birth their children with strength and beauty.

Help! My baby will only sleep in my arms

It's stressful to be the one who is holding your baby most of the day, but it's even more stressful to wonder, 'am I doing something wrong? Or am I creating bad habits?'

 

Free ticket offer

Essential Baby & Toddler Show - Sydney

The Essential Baby & Toddler Show, presented by Blackmores, will be held in Sydney on 23-25 September. Register for your free ticket now to save $20!

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.