How should I spend our refund?

**my4littlebuffaloes** · 02-06-2006, 04:10 PM

We are getting $4000 back from the federal return. We are currently on baby step #3 of Dave Ramsey's plan. Building the 3-6 month emergency. We want to have 10K in our EF. We currently have $4K.

We have some things we want to do at the moment that we were wanting to use the tax refund for, but I am not sure if we should. Here is our tentative plan.

$2000 towards basement - dh is doing it himself, but this would cover carpet (he can't do this) and drywall.

$500 towards school supplies, we have to have this

$1000 towards our vacation this summer. We are taking an educational field trip through SD and parts of MN. We have $400 saved right now. I have no clue if $1400 is too much or too little or what. We haven't done anything like this before. We will be gone about 1 week and have a place to stay 1 night.

And the rest into EF.

The problem I have with this, is we are no where near the carpet stage of the basement project, so maybe it doesn't make sense to set aside money for that yet. Is $1000 too much for the vacation? I was really hoping to put more into the EF from the tax refund. I had anticpated getting more back. But I guess it is also good we didn't since we have had that money each month.

I was also contemplating buying each of the kids a savings bond. We have 4 kids and nothing saved towards their education. But that is baby step #5 and we are not anywhere near that yet.

So WWYD? Thanks!

Jennifer

**PrairieRose** · 02-06-2006, 05:37 PM

Jennifer if it were me I would put $1000 into the EF, save the money you mentioned for the basement and then buy the school supplies and that would leave what? $600 or so to put toward your vacation....? Surely you can add to that before the time comes.... jmho.

**AmyBoz** · 02-06-2006, 07:35 PM

Jennifer...If you have any debt (this may have been an earlier step and I just don't know it) I would use the money toward that first. If you have no current outstanding debt, then I would do just what you've planned to do with the money. You know what you are most comfortable with and what your priorities are at the moment.

**leeleeaub** · 02-07-2006, 01:51 AM

I would definately pay the bills first and work on the basement first and work on the vacation last but that is just me.

**FrugalMomof3** · 02-07-2006, 11:12 AM

If it were me, I would personally use it to pay any debts I had first or atleast some of them. Then do the basement, school supplies and then the vacation part. You can always save up more money for vacation weekly or bi-weekly, or however you choose. My family and I go on vacation every year in the summer for 1 week, we normally only spend including lodging around $600-$700 but never more, we have me, hubby, and 3 children.

Thats just M2C!

Tracy

**Valerie in WA** · 02-07-2006, 11:33 AM

Before you do spend any money, you should do some research and find out just what this vacation will cost you. Sit down and calculate lodging, meals, gasoline, entrance fees, etc. You can probably find information on lodging and entrance fees on-line, as well as distance calculators that you can use to calculate your gasoling budget. Figure on gas costing at least 25c more per gallon in the summer.

Once you know how much you truly need for your vacation, you can make a more informed decision.

I have a rule of thumb that I use in occasions like yours. My rule is the 50/50 rule. 50% to savings and 50% to something of permanent value (like home improvement).

Also, are you adding to your EF on a monthly basis? If so, how much? If your monthly deposits will fully fund your EF by the end of the year, I'd be more inclined to spend the tax refund. OTOH, if you're only putting in $50/month, you really need the boost that the tax refund will give you.

**my4littlebuffaloes** · 02-07-2006, 02:54 PM

Thanks for the input y'all! We currently have no debt except the house. We are adding $400 a month to the EF, this is our old car payment. I am anxious to get our EF fully funded so that I can start putting that money elsewhere - retirement, college, etc.

I am in the process of researching our vacation right now. I have the entrance fees figured out and we went through last night and figured out our route. So now that I know around where we want to stay and I can look into how much a hotel costs. I just heard on the news today that they are expecting gas prices to be around $2.45. So I need to figure out the mileage and estimate.

I talked to dh last night and we do want to put at least $1000 into the EF from our tax refund. So I will do that and then figure how much we will need for our vacation and then go from there.

Thanks for everyone's input!

Jennifer

**ohsandohs** · 02-07-2006, 06:44 PM

(Nice to "see" you here, by the way!)

Are you by any chance using the Prairie Primer for your homeschooling? Your vacation destination/route sounds like the "Little House" and "Laura Ingalls Wilder" itinerary. If it is, how neat that you live near enough to be able to take this trip!

I'm asking not only because I wish WE could take that trip for a vacation, but because this is our second year of using the Prairie Primer and we LOVE it! (And I have some valuable links to share with you if this hunch is right...)

Please email me through the PP mailbox and I'll get back to you with information that I have, if you want it.

Have fun on your trip!

(Thanks everyone, for letting me jump in here. O/T over for now!)

Blessings,

Michelle

**my4littlebuffaloes** · 02-07-2006, 08:16 PM

We will be visiting the Laura sites. That is what we call them anyway! LOL We are studying amercian history this year and have read all the Laura books. We are not doing the Prairie Primer though. My dd's are still young 5 and 1. I am thinking when they are are 5 and 9 I will do it. We are at the moment only hsing ds who is 7, so I wanted to wait until the girls were older to do that. It is in my plan though!

We live in CO and will be heading through NE and up through Iowa and visiting Walnut Grove and De Smet. We will hit Mt Rushmore on the way home. We are really looking forward to it.

Jennifer