What I did with $4000

Dolla' dolla' billz, y'all

Dolla’ dolla’ billz, y’all

I recently came into $4000.  As someone who is relatively young (and relatively broke), I thought you might be interested to know what I did with the money.  Did I buy some new gadgets? Hit the casino? New clothes? Pay off debts?  Sock it away?  Before we get to the answer, I should probably first explain where the money came from.

A few weeks ago I was helping a friend move.  He had all his stuff in a storage unit, so several of us just met him over there to help him load the stuff into a 17 foot uhaul.  We got done loading the truck and pulled around to the entrance so he could turn in the keys to his unit.

Let me paint the scene.  There were four cars (including mine) other than the uhaul.  The other three were waiting right next to the entrance/exit of the storage place, the uhaul was parked facing down a row of units next to the office, and I was parked at the end of the same row.

My buddy comes out of the office and fires up the uhaul and instead of backing up or pulling around in front of me, he decides to wrap around behind me.  You can probably see where this is going.  Not being used to driving a huge truck, he didn’t leave enough room for the turn and crunched up the left rear quarter panel on my ’99 Camry (and trust me, I didn’t have time to get out of the way after I realized what was happening).

The crash

This pretty clearly explains what happened.

Luckily, I’m well practiced in the art of not making a big deal out of trivialities.  So I viewed the matter only as a small inconvenience, rather than something that would ruin my day.  We called our respective insurance companies, a sheriff came out, and then I finished helping him move.

Long story short, because body work is expensive and the car was old, the insurance company totaled-out my car.  I had two options: get $5300 and they keep the car, or get $4000 and I keep the car.  Decisions, decisions…

Since the car is in very good mechanical shape, has brand new tires, and the damage was all superficial, it was a pretty easy decision to keep the car and take the $4000.  Now I just needed to decide what to do with it.

First of all, let me just say that the only debt I have is $2500 in federally subsidized student loans that aren’t accruing interest.  If I had debt that was accruing interest, especially bad debt (i.e. credit cards and the like), I would have just put this money towards that debt.  Easy decision.  But I don’t so the decision was slightly more complicated.

It actually didn’t take me very long to decide.  I put $3000 in a savings account as an emergency fund, $500 in my Roth IRA, and $500 in my checking account to be used however I see fit.  Here’s the rationale:

I had been meaning to start an emergency fund for a while, but adding $50 here and there doesn’t get you into the thousands very quickly.  As a general rule of thumb, you should have at least 3 months worth of expenses saved up somewhere for emergencies (loss of job, sudden illness, etc.).  So the $3000 here was an immediate decision.

I also have a goal to max out my Roth IRA by tax day next year.  Although, I may not quite get there (the max annual contribution is $5500), the $500 chunk on top of my regular monthly contributions helps.

The $500 in checking I still haven’t decided what to do with.  It will probably just be spent going out a little more often than normal over the next month or two.

I realize that these decisions aren’t ‘sexy’ but they SHOULD be.  Financial irresponsibility is a huge problem in today’s YOLO ‘Merica.  I have a very clear idea about how I want my financial future to look (and you should too!).  I allocated the money according to my long term goals.  If you don’t have long term goals, you should really make some for yourself.  It’s a great exercise and there are lots of benefits.


YOLO ‘Merica!! (this is the world we live in)

Anyway, just thought I’d contribute my $0.02 on the subject of financial responsibility.  And being recommended by the SUPER sexy Happy Potamus himself, decisions like these should be quickly climbing the ‘sexy decisions’ chart.  ‘Cuz that’s a thing.

How do you feel about financial responsibility?  Do you know how you would spend an extra $4000?  Tell us in the comments!


1 thought on “What I did with $4000

  1. Pingback: I maxed out my Roth IRA last year! | The Happy Potamus

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