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 SlinkyMalinki

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

 

Ada Nicodemou: 'I can never be completely happy again'

Home and Away actress Ada Nicodemou has opened up about the loss of her stillborn baby.

10 things to consider when you're thinking about trying for a baby

Before you start tracking your menstrual cycle and reading up on the best positions to get pregnant, there are a few other things you may want to consider.

Baby Gammy's dad tries to claim charity money

The biological father of baby Gammy has reportedly tried to access charity money raised for the little boy's medical costs.

How special surgery and IVF can create a post-vasectomy baby

Cricket legend Glenn McGrath and his second wife Sara are expecting their first child together, thanks to IVF and a delicate surgical sperm retrieval process that helped the couple to conceive.

Belle Gibson's mother 'disgusted and embarrassed'

The mother of disgraced wellness blogger Belle Gibson has accused her daughter of lying about her childhood in an attempt to garner public sympathy.

Life On Mars

It's men who need 'retraining', not women

We are all responsible for our own behaviour. Telling victims to harden up is wrong.

Doctor's mobile phone 'left inside c-section mum'

A new mum claims a doctor left his mobile phone inside her after delivering her baby via caesarean section.

I'm a mum and I'm following my dreams

I want my kids to know that no matter what happens in life, you can still be who it is that you've always wanted to be.

Those first daycare days

I had this innate 'mum' moment the other day.

'If one person had listened, my life would have been so different'

Katherine's father will die in prison for the horrifying sexual abuse of his daughter. Yet she is the one with the true life sentence.

Couple to celebrate terminally ill baby's birthday in unique way

Baby Jai Bishop has lived at Starship Hospital for the past seven months, with his parents flying back and forth from Hokitika, 1100km away, to be by his side.

This new plan undermines breastfeeding and baby health at everyone's expense

Mothers, babies, the health system and the wider society are going to pay the price of this new budget.

Trying to understand why your baby is upset

Working out what?s underlying your baby's fussiness can be a case of trial and error. Here are a few common causes and how you can remedy each one.

When those you love judge your parenting

In today's society, never has it been harder to parent without judgment. But what about when judgment is coming from closer to home?

Don't play the victim blame game with family violence

It's not a woman's job to teach violent men how to behave.

11 truths about having two under two

When I told my mothers? group that my husband and I had started trying for our second baby they told me I was crazy. Now I can see why.

'How do you say goodbye to someone you've only just started to get to know?'

New mum Sarah Sutton was faced with a shattering scenario no person should have to endure.

It's a ... boy! Couple welcomes son number 13

"It's a boy!" That's the phrase Kateri Schwandt has heard in labour delivery ward for the 13th time in her life.

Six reasons to go for a walk

Can't find time to get to the gym? It could be just as beneficial to put your baby in the stroller and go for a walk.

Seven questions you should be asking about your health cover

If the last time you assessed your health cover was five years ago, there?s a chance it may no longer suit your needs. To ensure it?s still right for your family, click here for seven questions to ask.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

Where are the childcare places?

It?s all very well to encourage women to work if they choose to, but how can the measures lead to increased workforce participation when women are once again left holding the baby?

The pain of not having babies and not knowing why

After seven years of wishing, hoping, crying, punching pillows and shouting "why me?!", the end result is more than I ever thought possible.

Getting your family finances in order

Whether you're after a new car for a growing family, a bigger house, or are just fixing up your finances, here are the basics on borrowing.

Mum shares graphic selfie to warn against tanning

A mum has shared a graphic photo of her skin cancer treatment as a warning to others.

Does parenthood make us happier?

We can certainly gain higher levels of happiness when we become parents, but the trick is to not get overwhelmed by the pressures of raising our kids.

No, having a dog is not like having a human child

It's obvious these people dote on their pets, but they're barking up the wrong tree.

Toddler styling

Seven things my toddler taught me about my home

My standards at home were never that high but having a two-year-old has taught me to be cool with chaos.

Australia's top baby names of 2014

The numbers have been crunched and it's official: Australian parents are having a bit of an 'O' moment.

How to set up the perfect nursery for your baby

You'll soon be meeting your baby, but you've got one big task to get done first: setting up a comfy, calming nursery you'll both be able to enjoy.

Childcare rebate: tougher rules for stay-at-home mums

A new form of activity testing will be introduced to ensure the highest subsidies go to parents who contribute the most to the workforce.

The women who desperately need more support in pregnancy

For women suffering from chronic morning sickness or hyperemesis gravidarum, pregnancy can be the roller coaster from hell.

When labour doesn't happen and you're induced

I never actually went into labour - so by 42 weeks I was booked in for induction.

Mum's grief for triplets inspires change

The death of Sophie Smith's triplet baby boys has motivated the half-marathon mother and her team to raise $1.25 million for charity.

The best advice for treating head lice

Just like a horror movie ... THEY'RE BAAAAAACK. So what works in treating and avoiding head lice and nits?

Overdue and over it

A watched womb never labours ... or at least mine didn't.

Parenting an early walker

Watching your child take their first wobbly steps is one of the best parenting highs you'll ever experience. But with that high comes a new reality.

Baby-led weaning worked for us

My baby wasn't interested in food - until we tried something new. Now she's eating it all, and it often comes from my plate.

'Paralysed bride' becomes a mum

Rachelle Friedman Chapman was preparing to marry the man of her dreams when tragedy struck four years ago.

 

Top baby names

Baby Names

The numbers are in and we can now bring you the 2014 top baby name list for Australia.

 
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.