If you had $8000...

S

scrapperjade

New member
Okay, I need help girls. Well, DH and I do that is, not just me, lol.

DH and my dad just finished a HUGE job (they are drywaller/painters) and they are getting their final cheque from it in about a week. DH's "bonus" is going to be around $8000 or so. We don't want to blow it on something, but spend it wisely. We have a few options, so if this was YOUR money, what would you be inclined to do?

Here's what we are thinking:
1) New furnace with majority, save the rest or put towards debt (we need one - our house is really old. Plus Canada has a energy efficiency grant that will give us a portion of our purchase back - so when we get that money back, it will save us quite a bit, even though we were out of pocket at the beginning)
2) Pay off our car, save the rest or put towards debt (we bought when we had poor credit and no down payment, so our payments are high - $375 per month)
3) Put it all towards debt

I'm not sure what would be our best option at this point. I would REALLY love to have the car paid off! We need a larger vehicle (we want a van), and if we paid off our car, we could sell it and use THAT money for a down payment. But, then again, with the g'ment grant, now is the best time to buy the furnace that we need to replace (ours isn't broken yet, but like I said, now is the best time to replace it and it WILL need to be done by next winter, and we will get money given back to us for doing it).

I thought I would ask you guys to get your thoughts!! Any ideas?
 
If I could pay all my debt off I would...then I would save for the new furnace...If I had a substantial amount of debt I would most likely buy the furnace and then pay off some of the debt or put some in an emergency fund for those unexpected things...
 
Having just replaced a cracked furnace in the house we just sold after finding out it had the potential to leak carbon monoxide, I'm inclined to choose option 1 since your furnace is old. We also bought an energy efficient model so we qualify for nice sized rebate from the US government. It was money well-spent in my mind. But there's something to be said for reducing your monthly car payment too. That's a tough call. Good luck deciding - that's a nice chunk of money!
 
I would say either 1 or 2. I would pick one if you think that in all likelihood the furnace will kick during this winter OR if you think you won't be able to save enough money to buy a new one when it does finally die. But I wouldn't necessary do 2 just to turn around to get another car because you'll have a payment all over again. I would lean towards 1.
 
hmmm... we replaced our furnace last year when it completely quit and weren't able to get the financing for a few weeks and it was FREEZING. so a new furnace is an awesome idea.

my car payment for my 2007 Escape is.......$650/month. not kidding. we bought it when our credit was crap too. can't believe they even gave us one, can't believe we took that payment, lol. we bought it new, and have around 3 years left to pay on it. so to me your car payment is awesome :D.

paying off debt is always good too. but i think if i were you, i'd buy the new furnace!
 
I would definitely go with the furnace, and then put most of what's left over toward the car. I would put a little in savings too, cuz you never know what might come up...
 
IMHO - after being at a point where we almost lost everything which forced us to become almost debt free (we still had our mortgage).......

Buy your furnace. Put the rest toward debt. Use the government money when you get it and put it toward debt as well.

Debt free feels SOOOOOOOOOOOOOO good! We wound up financing DH's truck a year and 1/2 ago and I regret it. Wish we would have stayed debt free. It feels so rewarding. And then you have more monthly cash freed up and can buy things you want outright.

Anywho.....just my thoughts. If it were me that is what I would do. 100%.
 
pay off the car, and then the debt, but don't buy a new car to just have more payments, instead put aside the money you would be spending on the furnace and debt payments until you have enough for a furnace OR a car you can pay cash for, we don't have any car payments and its hard to believe that we used to pay 400-600 extra a month for our cars!

lets see, 400 times 12 is 4800, that would be enough for a furnace when it does poo out right?
 
I agree with NeeNee..get the furnance, pay the rest on your highest interest debts, then use your gov't refund/reward toward the rest of your debt when you get it...

side note: I REALLY want to be debt free by the time I retire {Jan 2011} so we will see...and I agree that a $375 car payment is not bad~ my van payment is $500, but we bought it brand new in 2006 {Kia Sedona} and we absolutely LOVE it! we only have about 18 months left to pay it off:thumbup:
 
I would get the new furnace because of the carbon monoxide concerns. I think this is going to be a tough winter. You don't want to have it break and then not have the cash to replace it then.

Then, I would put the rest towards any debt that has higher interest rates than your vehicle.
 
Buy furnace, pay off debt.

Now tell me...I do not think a high-efficiency furnace should cost you more than 3-4 grand. My husband does this on the side all the time and I hear the price that he quotes people and they are HALF that (and he is still making good coin).

Have you shopped around for a furnace? Do not settle with the cheapest quote, nor would I go for the highest either. You can get a furnace anywhere, but to find someone that will come and fix someone else's work...that's harder to comeby.

Anyway, my original thought was that given our temperatures, you do not want to be replacing your furnace next month. :)
 
Leah - I totally agree about shopping around! DH's brother is a gas fitter and installs furnaces a lot. I will be having DH talk to him about a good quality, energy efficient furnaces so we can make an informed decision.

There is nothing I hate more than investing into something, then finding out a short while later that we could have got the same thing or better for cheaper!!
 
I would agree about getting a new furnace and then using the money you get back to put towards debt. I too, wouldn't buy a new car just yet, only if it's an absolute had to. Get all the other debt paid off and then you could save and get a new car.
 
I too would get the furnace... being it's age, the savings on energy costs... your ROI will be worth it in the long run. Then what to do the remaining? I'd make sure that I would have at least 6-8 mon of living expenses in emergency fund... if that is a go, then pay on the debt with the highest interest rate...
 
I agree with Rebecca! I would get the new furnace! But then I would put the rest in savings to help with any emergencies that come up throughout the year!
 
An emergency fund is a really good idea! We need to do that for sure.

There's just so much to save for you know? We already agreed that we wouldn't spend any of this money on any WANTS like a flat screen (as much as DH would love it, lol). I guess we can't go too wrong with any of the choices as long as we do our research and make the best choice we can.

I also agree on not buying a new vehicle to replace ours if we choose to pay it off. While a van would be nice, we don't NEED it. I would like to drive my car, all paid off and save for a newer one (and pay it off at once, like was mentioned).
 
I'm with the furnace people :) Get a new one and put the rest towards your debt. Then when you've paid off all the debt, you can put the $$ you're saving by not having debt every month into savings, and pay a little bit more than your car payment too if you want. Pay off the car faster, and get down to zero debt.
 
Since it sounds like your furnace needs replacing, I'd do that first. Then I'd put $1000 into an emergency fund since it sounds like you don't have one. Then if you have any extra money you can start putting that toward your debt, starting with the smallest balance so you can get yourself a nice debt snowball going. That's what I'd do anyway.
 
I might first look into how much it would cost to finance the furnace if it came to that. If the cost to finance the furnace is less than the amount you are currently paying on your car, it would make more sense to pay off the car now, get rid of those payments, then save that money and pay as much toward the furnace as you can when that time comes (which might be later than you think) and finance the rest then.
 
I think I would look into the furnace...if it went out...then it would become an emergency to fix! Especially with winter coming. You might check into a heat pump and see what that might cost with it...our bills went down considerably when we replaced the a/c with it.
 
Well, I spoke to DH and he definitely wants to replace the furnace. We would wait because its not on its way out really. We weren't even planning to replace it yet, but with this bonus, we can outright pay for it, and not have to make payments for it. Plus this grant is only good for 18 months since getting our home inspected last month, so we are on a time line to get our house energy efficient.
 
Make sure you check that government grant carefully, i think you need to make sure that the furnace you buy is at least 95% efficient to qualify. They are a bit more expensive, but not ridiculously so.
 
I would do furnace first ... I know how cold SK gets in the winter! hehehee anything left over, I would use to pay off your highest interest rate debt first. And use the rebate you get as an emergency fund.
And your car payment isn't insane ... when we had our truck, we were paying over $700/month for it ... also done by hubby when his credit was crappy - which it is again, because we couldn't afford to keep the truck when we moved into our new place (rent doubled in our area within 6 months of us getting the truck, stupid owners wanted the place we had been in back - we had been paying $700 for rent and $700 for truck - now we pay $1350 for rent!!!!).
 
Nettio said:
Since it sounds like your furnace needs replacing, I'd do that first. Then I'd put $1000 into an emergency fund since it sounds like you don't have one. Then if you have any extra money you can start putting that toward your debt, starting with the smallest balance so you can get yourself a nice debt snowball going. That's what I'd do anyway.
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This is EXACTLY what I would do. :)
 
*rofl* I'm so bummed that I already have one and THIS YEAR they came out with pink and leopard print!
 
Nettio said:
Since it sounds like your furnace needs replacing, I'd do that first. Then I'd put $1000 into an emergency fund since it sounds like you don't have one. Then if you have any extra money you can start putting that toward your debt, starting with the smallest balance so you can get yourself a nice debt snowball going. That's what I'd do anyway.
Click to expand...

yep! :) SUPER plan!

My DH works in heating/cooling and in our area he says the furnace should be around $5000 installed for a really good one. Or maybe save some money and ASK for a scratch-and-dent model! We needed a new furnace last year and since my husband knows the suppliers he called and asked for the best scratch-and-dent 90% efficient furnace they had and we got it for a real steal! And I could care less that it has a tiny scratch on the side. It was a big savings. And get a few quotes. companies are hungry these days and my DH's company sometimes loses money on jobs just to keep busy. That is a real win for the customer!

Good luck! :)
 
I would pretty much side with Lynette.
Buy the furnace (we just got ours replaced this year too with our tax refund money and we are now saving money each month on the electric bill, so it keeps paying back). Put a portion towards the emergency fund (we were lucky we had one when not even a month after getting the furnace, our pipes broke throughout our house). With the money you got back from the grant pay down some of the debt/car. How much and which one you pay down should be dependent on your interest rates for each of the debts - pay down the one(s) with the highest interest rates. Even though the car might be the highest monthly cost to you (outside of your mortgage), it may have the lowest interest rate. The point is to pay the least amount on interest debt over actual purchase debt.
 
We had to replace our furnace this year...I say GO for that! It makes a HUGE difference in out bill and we have only got ONE since the switch over-over 100 bucks cheaper...plus, its comforting knowing that we are safe, our old furnace was ancient!
It cost around 3000 by the time it was bought and installed, it also came with a 5 year maintenance plan, where they come out twice a year and service it...PLUS here in the US-we got a break on our taxes because we added an energy efficient model-you might check that out as well.

Good luck with your decision!
 
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