conversation: User (catnipdealer16): "Monthly Income is about $7,000\nBills are about $2,500/mo\n\nOf that $2,500 is a $1,100 mortgage and $675 in student loans. I just finished my MBA, so another $400/mo in student loans are coming in January. Student loan interest ranges from 5%-8.5%. Mortgage interest is 3.25%.\n\nHouse is worth around $215k with about $70k in equity.\n\nNo car loans, no credit card debt.\n\nRoth 401k and 401k to equate to about 15% of one salary ( salary is around $95k/yr) contributed yearly. At about $60k in retirement accounts. We're almost 29. I do not have any retirement accounts (for various reasons, mainly, I just finished school so no opportunity for one).\n\nWe have a baby on the way, our first. We "need" an SUV/Crossover. My current car is from undergrad in 2006 and is a tiny little car. We have luggage, dogs, baby and all their stuff so... a bigger car is in our sights. We're thinking about a $15k older SUV to keep payments low until we're 100% debt free (Excluding house). With an 800 credit score, our APR on a car loan is 1.88%,\n\nAside from the $40k we just received, we have $10,000 saved as an emergency fund. We have it in a money market fund currently.\n\nMy thought is to pay off around $33k in student loans, saving us about $650/mo. Using the rest to buy things for the baby, finally replace our old hand me down furniture, and husband is obsessed with getting a new tv. \n\nCan I have your thoughts and opinions on what is best?\n\nI'd really like to get rid of the student loans, not only to eliminate debt, but also so we can lower our monthly payments in case Baby comes and I decide not to work. Without my monthly income, our lifestyle would change and it would become tighter (at the financial point we are at curently). I am planning to work after Baby, but you never know...\n\nThank you!!!!!!!!\n\nEdit: I forgot to mention that Baby will be in daycare, if I do continue to work. Daycare is $1,000/mo. Apparently, we can use FSA for it? Pre taxed dollars... Regardless, that will be an added expense come spring."
  Self: "Use $33k to pay off the loans, save $5,000 for a car, $1,000 on baby necessities, and $1,000 on some furniture.\n\nWith a $5,000 car down payment on a $15,000 car, your payment will be about $170-200/month, leaving behind an additional $450/month that you can save and slowly replace furniture. You do not need to replace all your furniture all at once.\n\nIf you plan on being a stay at home mother, then you should hold out on a new car and new furniture. A small car does not mean you cannot have a baby seat in the back. Plus the longer you want to buy the car, the larger down payment you will have for the car, as long as you don't think "larger down payment? let's buy a more expensive car now.""
  User (catnipdealer16): "Thanks! You're right about putting cash down on the car. It makes the most sense and it is probably the most responsible. As I replied to another redditor, it does suck that in all of this, I'm not "investing" the money anywhere. It is all going to debt, which is fantastic but still kind of sucks!\n\nTalking husband into putting cash down on a car and not on his new favorite TV will be quite the conversation. Hehe"
  