How much should my wife and I set aside for a second car and moving out?

[atourlimit111]

My wife, 2 kids and myself live in her grandma's basement. We plan on moving out in the spring.

We are getting back $9,000 dollars in our tax refund. That's not a typo. Problem is we only have one vehicle at the moment and it's paid off. We are looking into getting a basic car for myself for only to and from work. I am looking at Toyota Corolla's now . It's hard to balance a good quality vehicle and a price. I don't want to spend too much and I don't want a vehicle that will spend a lot of time at the car mechanic and have too many miles. I will be getting it inspected from a professional mechanic. I've learned this lesson the hard way unfortunately.

Since we will be moving out in the spring. Some of our furniture will not make it with this move. We have moved so many times that our furniture will fall apart. We need a new dresser, new night stands, coffee table and probably a bunk bed for our two kids. Not sure on the bunk bed though. Also a kitchen table and four chairs. We plan on visiting IKEA in the future.

Both my wife and I don't know how much to set aside for our tax refund. We plan on paying off $1,200 in debt and that's it.

I'm the only one working right now since she can't work because of my son's medical needs.

 I made $31,000 last year. To put things in perspective.

So not sure how to divide up the money at this point. Hopefully I can get some good insight from the Mustachians. Thanks in advance.

[testtest]

If you have debt to pay off then you might not have an emergency fund? With two kids and one job that does not provide a high income, I would keep the dollars in a high interest bearing checking account (Ally, for example).

Craigslist is a really great option for used furniture. If you can afford the time to be a little selective, you can find some really nice things for cheaper than new from Ikea, and much better quality. Something to consider.

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[Cranky]

Yeah, I’d stash that money in the bank and try hard not to spend it.

If you’re moving, you’ll need deposits. Furniture can be craigslist or thrift store - I’m looking at my very solid real wood dressers that I bough at a church rummage sale for $10 each. Coffee tables are in oversupply at Goodwill.

Why will you need another car? I understand it would be more convenient, but it costs a lot to insure and run a car, and you’re cutting it pretty close.

[MayDay]

I understand the desire to go get fresh new stuff at Ikea but if that 9k needs to cover your debt, an e fund, and new furniture, I'd keep the furniture as low as possible.

Start putting the word out to friends and family about what you need. None of it is critical to buy the very second you move. You can hit thrift stores over time.

[Villanelle]

Step away from Ikea.  You should limit yourself to freecycle or items that cost almost nothing on Craiglist, at garage sales, in thrift stores, etc.  Also, put out the word to anyone and everyone that you need furniture.  When I set up my first apartment, I was surprised how many people offered up free or nearly free things.

And glue, screws or nails, and duct tape will put back together plenty of broken stuff.  Right now, you can't afford nice furniture. You can afford a piece of plywood stacked on milk crates as a coffee table, which you can probably come by for free.   

Is there some reason you are required to move out?  Assuming you are paying no rent or less rent than you would be when you move out, it seems like it would be worth it to stay a while longer. 

[ketchup]

I'll echo the rest of the sentiments here.  I'd pay off that $1,200 debt and hold onto the cash.  If you had debt, that means your emergency fund needs to be beefed up, especially with one income and a family with two kids (and some wildcard medical issues it sounds like).

Furniture can be extremely cheap if you're patient and willing to put in a little legwork.  The computer I'm using to post this is sitting on a $20 thrift store solid wood desk that I bought six years ago.  Our couch has survived at least three moves in the last ten years ("inherited"/pushed onto my mom and then me from my grandpa).  Our fancypants glass coffee table was about $30 from a thrift store five years ago.  Our solid wood dresser was from a thrift store about five years ago and I don't remember the cost, but no more than $50.  Our nightstand is actually from IKEA, but I found it on the side of the road five years ago.  Our kitchen table was $100 new at Target 2.5 years ago and it's a fucking piece of shit. 

With furniture, you get what you pay for, unless you buy used.  We have a wonderful thrift store in the area we got all this stuff from.  They source of most of their stuff from big estate sales and the like - you're not limited to places like Goodwill/Salvation Army (but they're great too).  Craigslist is another option; my (FIREd) dad furnished his apartment 90% from Craigslist a couple years ago and he got some great stuff for almost nothing.

Why do you need a second car? Presumably you're doing fine with one right now, and it's in good shape.  GF and I are a household of two, but we only have one car (a 2001 that we put a very unmustachian ~25k miles/year on).  She works, but either from home or traveling most of the time.  Occasional rental cars in a pinch can be very economical vs buying and maintaining a second car.

And to put our things in perspective, we made about $70k last year.

[ysette9]

We just joined a Buy Nothing group in our area and scored a free kids’ swingset for the back yard. I’m not shopping for furniture, but it is available out there for free or very little. We buy some new stuff at ikea and some used ikea stuff on Craigslist and we make over ten times what you do. There really is no need for new when someone else can do that for you and you can benefit.

As for the car, if you really do need another one, buy used on Craigslist as well. Start with your library’s copy of the Consumer Reports used car guide to tell you which makes, models, and years are reliable. Then when you find something online, schedule a pre-purchase check at a local mechanic (found on Yelp) to verify the car doesn’t have any big problems. You should be able to get something decent with plenty of life left for $4-5k easily. Others have suggested searching for older cars with lower miles so it will last longer. Good luck.

[testtest]

Good call about the FB Buy Nothing group. I don't pay attention to it but DW does. We don't get stuff with the group...we give away things we don't need or want from accumulation in "past lives" mostly. Really nice stuff (baby things, furniture, DW's designer purses she doesn't want or use, etc.). DW finds it really satisfying to re-home our perfectly functional but underused things.

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[Wayward]

The first thing that stands out to me is $9,000 is a huge refund!  Have you updated your W-9 to make sure you are getting the correct deductions?

I would pay off the $1,200 debt and throw the rest in a saving account, like Ally bank, for an emergency fund.  I wouldn't even consider buying brand new furniture at this point, as others have said buy used or look for free furniture.  Mention needing furniture to friends, coworker, family, local community, etc and get only necessary pieces at first.  There is plenty of good, cheap furniture out there! In several apartments I rented the landlord had extra furniture I was able to use for free, see what your situation will be before spending money.

Is there a reason you need a second car?  I would keep costs as low as possible if you can so you can save any extra.   

[Cranky]

I'd guess that they are getting EIC and a child tax credit, and it may be hard to accurately adjust withholding because of that (especially with the new tax bill confusing the issue...)

[formerlydivorcedmom]

If you decide you really need another car (how hard is it to deal with having one right now?), also consider Honda Civics.  My husband was a mechanic for many years and swears by them.  His is a 2005 with 200k miles (he bought it in 2011 with more than 150k).  We expect to own this car another 10 years.