A couple of week´s ago I shared the news that my girl got accepted at the language magnet school we had our hearts set on was emotional, to say the least. Not only are we a bit relieved and even relaxed because her bilingualism is now basically guaranteed, but we can also plan for the rest of the year and the immediate future—or at least for the next six years she´ll be in this school.
I have to admit, though, that I am also almost as excited that we will no longer need to continue dishing out close to 1K every month to cover the cost of her preschool. Keep in mind that we live in Los Angeles County and that my girl has to go to school all day because mamá has to work- 1K is what that costs around here.
So now the big looming question is: What to do with that extra income?
I hate to admit it, but both my husband and I are terrible with money and with keeping a budget. Just terrible. I really want to learn from our past mistakes and have a serious plan for making wise use of this extra money about to hit our home budget. I know I will still need to allocate some for a part-time sitter to help when I´m traveling, but that still leaves me with a substantial amount of money that, if invested wisely, can grow beautifully.
We also need to come up with a plan soon before we decide we really need a new car, or a house with two bathrooms! Which we do-both, but it will have to wait.
Our options for investing that additional income are:
- Invest it on an IRA plan
- Invest it in a college fund for Camila
Can you believe she doesn´t have a college fund yet? Our excuse is that less than a year after she was born the recession hit us pretty bad. We were barely surviving and our savings were depleted. Then we had to invest in daycare so I could start working again and then preschool came along. We figured we´d get back on our feet soon enough and make her college fund a priority.
However, since we ate up our savings, we don´t have a huge retirement plan either. I´ve read financial advice that says to secure your retirement fund before you invest in a college fund. The reasoning being that there are loans for college but no loans for retirement.
I really, really want to be smart about this decision and have this be the start of a path to financial recovery in our house. My gut-feeling is to go with the college fund because this money has already been part of her education and it should continue its destiny.
What would you do?
Continue to Never Settle for Less by Filing online at http://www.hrblock.com/index.html or in an H&R Block Office.
DISCLOSURE: This post has been sponsored by H&R Block. The story and miserable money management are all my own.