Sudden Windfalls

My in-laws called us around 6pm Sunday evening and asked if they could stop by. This was a surprise in and of itself, as they hardly ever call and ask to come over and certainly not on the spur of the moment- they’re just not those sort of people. The biggest surprise by far was when they arrived- they gave us two checks. One was from my husband’s godmother, his aunt, for €1000. The other was from his parents for €2600; his share of his father’s inheritance from his grandfather.

This money was totally unexpected; we had no idea they were planning this. It really was a sudden windfall.

My first thought was ‘I am not going to want a new couch’. I hate my couch- it’s a crappy clic-clac, the French version of a cheap futon. It constantly looks messy and student-y, and I’ve been lusting after a new one (from Ikea, natch) for a long time. I know I’ve changed over the past 18 months; before starting to get my budget under control I would have been at Ikea first thing Monday morning.

My second thought was ‘Thank goodness we’re not negative!’. There have been many times that we’ve received a large-ish sum of money, but it’s only served to fill back up the bottomless negative hole of our overdrawn bank account. This is only the second time that we’ve been able to actually use a windfall for something other than paying back the bank.*

My third thought was ‘What can I pay off?’. At first I thought I would be able to pay off our smaller car loan as well as our consumer credit line. Then I took a look at my loan payoffs spreadsheet and saw that we owe €2289.36 on our consumer credit line and €1572.48 on our car. That’s a total of €3861.84, so not enough to pay off both loans.

So what did we do? Well, we paid off the line of credit. €2289.36 gone- KABOOM! And at 20.32% interest, it feels really, really good. That’s our last open ended loan. All the rest, for two cars, multiple student loans and to pay off my American credit card, have fixed terms.

Then, with the remaining €1310.64 we divided it three ways: €1000 into an emergency fund, €100 to our vacation fund to give us a round €1000, and the remaining €210.64 goes to my husband. Over the past few years, he has consistently had to give up his birthday money to help us make ends meet, so I feel like he deserves this. Not to mention that his grandfather died, so he should get something!

I’m going to do two things with the extra €133.97 that we used to pay towards the line of credit. I’ll put half of it into the emergency fund, because I’d like to have more than €1000 in it. The other half I’ll put into a ‘paying off the car’ fund. As our payments are automatically deducted I can’t pay more than the amount due, nor am I able to send in extra payments. What I can do is pay off the remaining amount in one lump sum, so all extra income is now going towards this 12.8% goal!

*The first was last August, when we used our tax return to buy our plane tickets to the US and set aside €500 for our vacation.