Okay, we've received our tax refund. It's a nice chunk of money, but we need it for our move this summer. (Dh is leaving the Army and we are moving home, where we will spend several months and then he's joining the Coast Guard instead and we'll move where they send us...we need money for living expenses between Army and Coast Guard paychecks.) We also need to do some vehicle repairs. Not much of this refund is available for just random spending. Maybe several hundred dollars. The rest of it absolutely has to be in our bank account in July for our move.

But I have some things I'd really like to pay off. Namely my old car, which I owe about $700-800 on still, and my Sears Card, which has a balance of about $400. I'm paying $40/month on it right now but I would like it all paid off by July so that we don't have that monthly expense when we move...so it's tempting to think of paying it all off right now. But I wouldn't be able to put all the money back if I put the $40/mo I currently pay into savings instead--that wouldn't get me the full $400 back in the account.

About the car...we are planning on selling it to CarMax as we have not been able to find a buyer for it here. They'll pay us Blue Book value, which is about $800, about the same amount of money as I currently owe on the car. I have two choices--either just take the car down there and let them buy it outright straight from Ford Credit--they will do the payoff. Or, I can pay it off myself, get the title, and then go sell it, and put the money back into the bank account. It will be a month or two before I can take it to CarMax because I have to renew the registration; it's expired and overdue, and I have to mail everything off to CA as it's still registered there, then wait for the registration to arrive. I can't drive it down to CarMax till it's registered. So that would be another car payment or two that I'd be making in the meantime. Interest rate is about 13%. Not as bad as the Sears card (22% or so) but I'm not sure if it'd really be smart to pay the car off first, then sell it, or if I just want to do that for the satisfaction of holding the title in my hand--as briefly as that will be.

Getting these things paid off would free up money in our budget, which I like the idea of, but we'd just be sticking it into savings to pay ourselves back the money we had to take out to pay them off in the first place.

Suggestions? I hope I've been coherent!

Being a military family member myself, I completely understand your dilema.

First off, you mentioned that you are waiting a couple of months to sell the car. I would pay that off, skipping the payments and interest for the next couple of months since you will get that back at CarMax.

If you can do it, pay off the Credit Card as well. I know that is tough, but when you add up that $40 per month plus interest, it really hurts.

As for the move. Make sure that you keep track of every dime that you spend that is directly related to the move. The military won't cover everything, but the rest is completely tax deductable.

Consider doing a "DitY" or "Partial DitY" move. When my wife and I have done this, we have managed to make a few bucks along the way. Just make sure that you plan it well.

Military Money (http://www.militarymoney.com/homefront/1076692283) has a nice article about moving time in the military. Lots of other good military financial stuff there too.

I agree with sdible - pay the car off first. Then see what you have left and what you can do with the Sears card.

Being a military family member myself, I completely understand your dilema.

First off, you mentioned that you are waiting a couple of months to sell the car. I would pay that off, skipping the payments and interest for the next couple of months since you will get that back at CarMax.

If you can do it, pay off the Credit Card as well. I know that is tough, but when you add up that $40 per month plus interest, it really hurts.

As for the move. Make sure that you keep track of every dime that you spend that is directly related to the move. The military won't cover everything, but the rest is completely tax deductable.

Consider doing a "DitY" or "Partial DitY" move. When my wife and I have done this, we have managed to make a few bucks along the way. Just make sure that you plan it well.

Military Money (http://www.militarymoney.com/homefront/1076692283) has a nice article about moving time in the military. Lots of other good military financial stuff there too.


Thanks for the advice and link. This is an ETS move so it's not in our best interest to do a DITY this time--we need the free storage that we get when we use the movers. We won't know a permanent address to have our HHGs shipped to for several months--we're just staying with family and then probably renting a tiny apartment while we are transitioning, before we get stationed somewhere with the Coast Guard. We will need most of our things to be in storage for awhile and the 90 days free storage (plus 90 days extension) will be the best thing for us.

If we use the movers, and it's an ETS move, can we still get reimbursed for at least our own transportation out to CA? I know they won't pay for both our vehicles but will we at least get mileage for one? We got screwed out of our money when we moved out here but that was partly dh's fault for not resubmitting things that were lost.

I'll go check out the link now. Maybe it'll answer that question and you won't have to. :)

I agree with sdible - pay the car off first. Then see what you have left and what you can do with the Sears card.

Just out of curiosity--why? The interest rate on the Sears card is higher so I was thinking that should get paid off first.

I trust your advice LOL, so I'll get the car taken care of, but I'd like to know the reasoning so I can make these decisions better in the future.

Just out of curiosity--why? The interest rate on the Sears card is higher so I was thinking that should get paid off first.

I trust your advice LOL, so I'll get the car taken care of, but I'd like to know the reasoning so I can make these decisions better in the future.

The reason was that you know for sure that money will be replaced by CarMax, so in essence, you can only gain. You will miss out on two months of payments and interest.

With the Card, although you get rid of that payment/interest, you also loose the $400 up front which you stated that you need to live off.

As for your question about reimbursing travel expense, I think that a portion or all of that is reimbursed, but check with officials at your current duty station.

I'd pay off the Sears card first since the interest is higher, then put another $400 toward paying off the car (assuming you have $800 to work with). Then try to pay off the car in the next two months (the extra $40 a month from the Sears card will help with that). How much is the monthly payment on the car?

How much is the monthly payment on the car?

Car payment is $110/mo, which is why I still owe on the stupid thing. It's a POS car, a 95 Ford Aspire that I bought in 99 and had to have a rebuilt tranny put in only a year later. Bought it for around $6K but had a 5-year loan and also got a few extensions along the way. The low payment was GREAT when I was in college and couldn't afford any more than that...but now, man, it sure is kicking me in the butt. We're making a $250/mo van payment for the minivan we had to buy when I got pg unexpectedly with Kid #3 and it would have been far nicer to only be paying for the minivan, not the old car too--but I used up our money on the down payment, owed more than the old car was worth, and couldn't afford to pay off the old car when I bought the minivan. Got a loan through the credit union, so there was no way to tack on the cost of the old car onto the loan for the new car. So I was basically stuck.

It's going to feel REALLY good to get rid of this thing.

I disagree about paying off the car first. You should pay off the highest interest rate item first. Pay off the Sears card ($400), pay $400 towards the car, then make your normal $110 a month payment, plus the $40 that you would have used on the Sears card. In 2 months, your car loan should be down around $250-$350. Take it to CarMax, get the $7-800 from them (which you'd net $350-550 from). You'll be rid of the Sears card, and the car debt, plus you'll have nearly half of the amount you started with back in your hands to work with.

You lose the "psychological benefit" of having the title in your hands, but you'll be in a better financial situation.

Also, it shouldn't need to be pointed out, but I will anyway. **Don't use the Sears card again!!**

JMNSHO. YMMV.

Also, it shouldn't need to be pointed out, but I will anyway. **Don't use the Sears card again!!**

Heh. No plans on using the Sears card. What is on it is a fridge that I bought years ago...the reason it's still on it is because for several years I made only the minimum payments. HA HA HA...I was an IDIOT back then. I made my payments, but the amount on the card went up...and I couldn't figure it out. Yeah, when the minimum is $15/mo and your interest is $20/mo...LOL. Stupid, stupid me. I have paid the entire cost of the fridge in interest alone, maybe even twice. So I finally bumped the payments up and have seen a nice decrease in the card's balance--but gosh, I've paid enough on the darn thing! I want to be done with it--I just don't want to leave us without enough money when it comes time to move. But I guess several hundred dollars won't really be a life or death matter.

I did put a little on the card at Christmastime but I have already paid that off and then some. So it's just still the stupid fridge on the card...I don't shop at Sears, or anywhere, very often anyway--so there will be no temptation to use the card. I only want that darn fridge done with since I've paid so much interest already. It's the most expensive $546 fridge in existance!

Okay, new question: what if I just pay both? It looks like both the car and the Sears card are important things to take care of. I have the money to do so. I am just concerned that if I spend $1200 right now, will I wind up having that $1200 back in the bank by July? Would it be better to pay both things off at once, and put all the extra money each month back into savings, or would it be better to do the $400 Sears/$400 car plan?

Also, it shouldn't need to be pointed out, but I will anyway. **Don't use the Sears card again!!**
Excellent advice. It defeats the purpose if you payoff the Sears card then use it again.

Okay, new question: what if I just pay both? It looks like both the car and the Sears card are important things to take care of. I have the money to do so. I am just concerned that if I spend $1200 right now, will I wind up having that $1200 back in the bank by July? Would it be better to pay both things off at once, and put all the extra money each month back into savings, or would it be better to do the $400 Sears/$400 car plan?

If it is vitally important to have the money back in your bank account by July, I wouldn't pay them both off. Unless you feel that you'd be able to pay both off by then, in that case pay them both off immediately and then pay yourself back the money.

Also, is it possible for you to register the car in the state you currently live in? That may be cheaper than registering it in CA.

It's possible, but would be way more expensive. That's why it's still registered in CA. There is a wheel tax for bringing cars into KY. Since we are military, we can keep our CA registration if we want to and avoid the wheel tax by doing so. When I bought the minivan, I bought it in Nashville and it has Tennessee registration--we can do that and again, we're avoiding that wheel tax. The CA registration is around $30; it would be over $100 to change it to KY. The TN registration is only $24 and I avoid the county fees too.

Here's a thought. If you pay off the car (~$800) and pay off the Sears card (~$400), then save the $150 a month that you were paying on these two until July ($150 x 6 months = $900), then sell the car to CarMax (whenever you get around to doing it) for ~$750, minus your registration costs, etc (net ~$700), and put the "profit" from the car into the savings account -- you'll find that in July you've got ~$1600 in the savings account... You might want to check my numbers, but based on what you've told us so far, I think they're approximately correct...

It's possible, but would be way more expensive. That's why it's still registered in CA. There is a wheel tax for bringing cars into KY. Since we are military, we can keep our CA registration if we want to and avoid the wheel tax by doing so. When I bought the minivan, I bought it in Nashville and it has Tennessee registration--we can do that and again, we're avoiding that wheel tax. The CA registration is around $30; it would be over $100 to change it to KY. The TN registration is only $24 and I avoid the county fees too.

Claim you are in TN then and register the car in TN :-) Would it cost more to tow it to carmax or pay the registration??

If I had an extra $800 right now I'd buy the car from you for my 15 yo, but I just spent all of my extra cash on my deductible and 34 days of a rental car.

I would pay off both the Sears card and the car--the $110 a month for the next 5 months, plus the $40 a month, plus the $800 would more than make up for the $1200 that you lay out right now (roughly estimated, it's $1550) --plus you wouldn't have any more interest going out.