$10,000 Commission check

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Frugalbear
Posts: 83
Joined: Sun Jun 02, 2019 7:35 am

$10,000 Commission check

Post by Frugalbear » Mon Jan 13, 2020 10:07 pm

Hi B-Heads,

Got a $10,000 commission (gross)check coming this month and next month I should have another $10k commission check(gross).... I have some 2020 financial goals, how would you allocate the commission checks first?

1. $3500 left to max out Roth IRA
2. $8000 car note at 3.99%
3. $8200 left on wives student loan at 6.55%
4. Add to Emergency fund ... Currently have 3months of expenses saved.

Just looking to get people's perspective on how they would tackle this if they were me

anonsdca
Posts: 298
Joined: Mon Jun 01, 2015 11:47 pm

Re: $10,000 Commission check

Post by anonsdca » Mon Jan 13, 2020 10:12 pm

With the first - I'd max the IRA, the rest on the student loan. With the second, I blow out the rest of the student loan and the entire car loan. Good spot to be in.

basspond
Posts: 1266
Joined: Wed Nov 27, 2013 4:01 am

Re: $10,000 Commission check

Post by basspond » Mon Jan 13, 2020 10:17 pm

I would pay off all non-mortgage debts first. Then save the payments (and plus) to max out IRA and keep on saving the rest.

mortfree
Posts: 1960
Joined: Mon Sep 12, 2016 7:06 pm

Re: $10,000 Commission check

Post by mortfree » Mon Jan 13, 2020 10:18 pm

If you mean the 2019 IRA then do that first.

Whatever is left goes to student loan from the first check and the second check.

Cross those off your list.

Anything else left goes to EF.

I’m guessing you will see at most 7k per check and you have almost 20k in debt.
Last edited by mortfree on Mon Jan 13, 2020 10:26 pm, edited 1 time in total.

Grt2bOutdoors
Posts: 21725
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: $10,000 Commission check

Post by Grt2bOutdoors » Mon Jan 13, 2020 10:19 pm

Fund the Roth IRA.
Pay off the student loans. ~ Redirect the old monthly payments to your emergency fund.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Katietsu
Posts: 2700
Joined: Sun Sep 22, 2013 1:48 am

Re: $10,000 Commission check

Post by Katietsu » Mon Jan 13, 2020 10:19 pm

I do not think it matters a whole lot. But if it were me:
1. Get rid of the student loans. At almost 7% interest, I would want that cleared. After it is gone, you also reduce your cash flow demands.
2. Finish off Roth. Can be used as an emergency fund if needed.
3. Pay off car payment.
4. Increase emergency fund. I might switch 3 and 4 if you have a strong concern that you may need the emergency fund in the near future or were expecting a significant life event (child, move, job change, health issue) .

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whodidntante
Posts: 7081
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: $10,000 Commission check

Post by whodidntante » Mon Jan 13, 2020 10:28 pm

1, 3, 2 assuming it's going to last. :twisted:

Balance
Posts: 267
Joined: Thu Jun 17, 2010 1:27 am
Location: San Francisco, CA

Re: $10,000 Commission check

Post by Balance » Mon Jan 13, 2020 10:40 pm

I get commission checks quite frequently over the last decade. At first, I didn't have the best plan on what to do with them. I always put away 30% of my check for tax purposes, I also conservatively add money every check to my solo 401k, then I save another 25% (Always save a good chunk for the times when commissions may be infrequent). Whatever is left off I spend for myself and the family.

vipertom1970
Posts: 145
Joined: Fri Jun 21, 2019 7:06 pm

Re: $10,000 Commission check

Post by vipertom1970 » Mon Jan 13, 2020 10:41 pm

3,1,2,4

paying off student is a guarantee 6.55% gain.

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