Nice Surprise - What would you do?

**freedeal** · 03-23-2006, 02:35 PM

I have mentioned in a another thread that I enter sweepstakes online as a hobby. I have won lots of stuff including trips, cash, etc.

Well, yesterday I found out that I would be getting $3000. This is a great surprise. It should be here in a couple of weeks according to the paperwork.

So now I am trying to decide exactly how to use it.

If you see in my siggy all of our debt except our mortgage.

We are going to pay off the $1800 that we have been working on this year. That leaves two other bills. Both are without interest.

One is $1700 and the other is about just under $6000.

I am trying to decide if the next one we should pay off is the $1700. We can use our snowball from that we won't be using and the $1800 and $1700 would both be paid off. Or we could put the extra toward the $6000 just so it would be smaller.

As I am writing this it seems like a simple answer but for some reason in my head I would rather two small bills to one large one. Any comments?

Oh yes, and when these are gone we will snowball our mortgage and be completely debt free in about 5 years.

**frugalfarmwife** · 03-23-2006, 02:39 PM

I understand your thought of rather having two smaller bills than a big one, it just seems more gratifying to be able to pay off a bill sooner. BUT, if you pay off the smaller ones you can really go at the last big one left. Ahh, decisions, decisions, oh wait, I know, lol, you could just send the winnings to me

Then you wouldn't have such a tough decision to make! (KIDDING!!)

Seriously though, congrats on the win! I'd be smiling HUGE over a windfall like that!

kj

**KimSecret** · 03-23-2006, 02:41 PM

I don't really have any advice, but I wanted to congratulate you on the big win!

**Darlene** · 03-23-2006, 02:50 PM

I'd pay off the smaller and then start snowballing on the bigger.
Congratulations!

**AmyBoz** · 03-23-2006, 03:19 PM

Originally posted by Darlene
I'd pay off the smaller and then start snowballing on the bigger.
Congratulations!

**jzkitten** · 03-23-2006, 03:30 PM

I agree, pay off the smaller ones and then really go after the larger one. By the way...Congratulations!

**madhen** · 03-23-2006, 05:53 PM

I agree with the above. My thinking is more along the lines of preferring to have one bill, rather than two. Then, I don't have to divide my attention and efforts in getting it down to zero. I can devote all my energy at attacking that one bill!

**shoefairy3** · 03-23-2006, 06:02 PM

i agree with the others

and congrats

**FrugalMomof3** · 03-23-2006, 06:13 PM

I would pay off the smaller ones then snowball the debt to the larger one, but that's JMO.

Congrats on the win!

**SHOPGIRL** · 03-23-2006, 06:18 PM

Well, if you were choosing between the two debts, I'd pay off the smaller one first.

If you don't have an EF, then I'd take the money and use it for that. If the loan doesn't have interest, you'd at least earn some money. I might even take that money and buy a ROTH IRA with it. Just something else to consider.

**Laurie in Bradenton** · 03-23-2006, 06:39 PM

Hate to be the wet blanket but watch the taxes! This is income and if they don't take out the taxes on it up front it WILL come back to bite you later. Put some aside if no taxes are taken out like 15%. Better safe than sorrry!

Laurie in Bradenton (Learned that one the hardway!

)

**PrairieRose** · 03-23-2006, 07:02 PM

yeah after you save the taxes back....I'd pay off the smallest debts first. It just feels like you've accomplished more when you can snowball a couple onto another one.

**freedeal** · 03-23-2006, 08:00 PM

Originally posted by Laurie in Bradenton
Hate to be the wet blanket but watch the taxes! This is income and if they don't take out the taxes on it up front it WILL come back to bite you later. Put some aside if no taxes are taken out like 15%. Better safe than sorrry!

Laurie in Bradenton (Learned that one the hardway! )

Laurie - you are right about the taxes. For 2005 we had several BIG wins including two trips. The taxes won't be an issue.

Thanks to all for the congrats. I am always excited when we win anything but especially cash. This is the largest cash prize we have gotten.

We also do have retirement funds and an EF.

The 3 bills that we have are medical and orthodontist so there is no interest. But I am really ready to see them go. DH wants us to pay off the two small ones and only have the one left. We have had a total of $13,000 for two boys in braces. Unfortunately, our insurance didn't pay for orthodontics.

Before Dave Ramsey, I didn't see a problem with paying the monthly bills for the braces and medical ( I had to have very expensive tests and I had to meet the deductible and co-pays). I also like the security that our EF gives us so I don't want to use that on these bills as long as they are interest free.

**ironmaiden** · 03-24-2006, 12:16 PM

One of the questions is ... which of ALL the loans has the highest interest rate. That's how the people with the big bucks decide these things.

**freedeal** · 03-24-2006, 12:53 PM

Originally posted by ironmaiden
One of the questions is ... which of ALL the loans has the highest interest rate. That's how the people with the big bucks decide these things.

Fortunately, none of this has interest. So it really is what we want paid off first.

I am almost convinced that I want to pay the two smaller ones and then the larger one.