What Should I Do With My Raise and Other Rants

Dreaming about what I’m going to do with my raise once I pass my PE helps me study.  I’ll receive $550 more per month once I pass it.  Assuming 25% will be taken out for taxes, leaves $416.  What should I do with it?  Increase my daughter’s 529 plan from $25/month to $209; an increase of $183, which leaves $233.  Then increase my Roth from $225 to $333, which is an increase of 108, which leaves $125, and don’t forget increasing tithes by $55, So I’m left with $75.

Or should I leave the Roth and 529 plan alone and point the whole amount towards the $10,000 HELOC which has a 10% interest rate but the interest is tax deductible, but so are contributions up to $2,500 for the 529.  Logic dictates pay off the HELOC and maxing out the Roth and 529 can come afterwards.  But the sooner I start with these the better off I’ll be in the long run.  I’m conflicted.  I think maybe I’m basing this on emotion and I need to take emotion out of the equation.  Yeah, it’ll be nice to be like everyone else and max out my Roth and 529 accounts but the HELOC is a debt.  Pay the debt off first.  So I’ll go ahead and throw most of the money at the HELOC and reevaluate my goals at the end of 2008 and see what my goals should be for 2009. I’ll definitively make maxing out those two accounts a priority.  This is a new way of looking at it that I did not consider when I originally planned my goals for 2008. 

I was really looking forward to having a nice Roth and 529 plan by the end of 2008, but again that’s putting emotion into the equation when I shouldn’t. 

 

So here is the amended financial plan for 2008

 

CC payoff	$6,000
Roth	$2,500 $300
Mortgage will decrease by	$1,200
Student Loan will decrease by	$1,500
HELOC will decrease by	$3,000 $5,200
Will increase 401 (k)	$1,021
Savings increases by 529	$1,500 $300
Total NetWorth Increase	$17,021

 

 

 

Because I’m stubborn I’m gong to contribute $25 a month to Roth and 529 and throw everything else at HELOC.  I Hope to God I pas that test then I may be able to pay that bad boy off completely!  (I feel so mature)

Here’s some back ground on the $10,000 HELOC.  I took it out to get a rental property and my mom splits the rent with two other people.  So, I used to HELOC to acquire an asset that I hope to pass on to my kids.