Profits from Selling Property?

Dave helps Lauren know what she and her husband should do with the money they get from selling some property.

QUESTION: Lauren and her husband have $9,000 left on their debt snowball and they have their emergency fund in place.  Lauren’s husband is retired military, so he has a good retirement plan.  They’re selling some property and want to know what they should do with the money they make on that sale.

ANSWER: First, pay off the $9,000 in debt.  Then make sure you have 3-6 months income in an emergency fund.  If your children’s college education is paid for, you should fund a couple Roth IRAs in good growth stock mutual funds.  In 2005, you can each put $4,000 into your Roth IRA – even if your husband doesn’t have an earned income as a retiree. 

You also need to give some of it and have some fun with it. 

Finally, put whatever is left on the house. 

You’re basically just going to work your way through the baby steps with the money you’ll get for the sale of your property.