[USER]

What should I do with left over money from insurance claim?
Context: a few days after Christmas, my garage caught fire. Several items that were damaged in the fire, I have no intention of replacing.

I’m going to use the payout to fix the garage, replace some items, pay off my car, credit cards, and all other debt. The only exception is my mortgage and student loans.

I rent out my house. My goal is take the rent payment (covers mortgage) I get from my tenants and also contribute additional funding to my principal.

I used a calculator and found I could pay off my mortgage In less than 6 years.

I also qualify for a form of student loan forgiveness as I am a teacher who works in a title 1 school. (A title one school is a school where at least 50% of families are at or below the poverty line).

The stipulation to this student loan forgiveness is I have to pay on it for 5 years before they pay out.

My question: if I have 5,000 ish dollars left over after paying off all other debt, should I invest it? Put it in a savings account?

Throw it at my mortgage or something?

[Lauren]

The insurance company may send an adjuster out to confirm you made the structural and cosmetic repairs they allowed in the claim. So, make sure you understand that provision and act accordingly.

With the rest, I recommend paying off your credit cards and car and rest to an emergency fund in a high yield CD or savings account.

[Joanne]

Save it for your emergency fund and don’t touch it unless a true emergency

[Lisa]

First fund your emergency savings account (3-6 months of living expenses), next work on paying off debt (sounds like you’ve got a plan for student loans), next I’d make sure retirement accounts are maxed out.

Then either HYSA, CDs, or start buying REIT, VSTAX, or other investments

[Melinda]

Emergency fund and could do short term CD 4.5%
And no
Fees

[Melissa]

Was there no damage to the structure that needs to be repaired?
I agree with the others build up your emergency fund.

It should be a minimum of 3 months expenses and goal of 6 months.

[Dorie]

Is that all you have? then emergency. If it is a windfall, mortgage, but don’t make double payments.

Put it on the principle and make sure they apply it to the principle. Good luck.

Sounds like you’re using the old thinking cap.

[Nikki]

The more you pay down your principal on your mortgage, the less you will pay in interest.

I would use a lump sum to pay towards that and then take half of what you were going to apply to monthly mortgage payment and put that into a savings account that pays interest.

When you have that where you want it, pay more towards the mortgage.

[Walter]

As a retired financial planner, I recommend you establish and emergency saving fund of 3 to 6 months of your living expenses.

This should be in a bank account which will be safe and accessible should you need it. After that pay off your debt.

You want to get to retirement with no debt. With no debt life gets much easier.

[Mindy]

Do you have an emergency fund? If not, I’d definitely put any remaining money in a HYSA for emergencies.

[Francess]

savings account. this is not enough to be making a real difference by investing it. investing is a form of gambling.

would you be happy if you lost the 5K?

stock markets go up; stock markets go down… conservative investing in your future is just that. keep the money safe.

[Author]

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