Just posted this to /r/personalfinance, but this looks like a great sub too.
I'm trying to get on top of budgeting and finances, but while things are improving, myself and the fiance are still terrible impulse buyers. I have a great job on good money so we can pay all our bills and enjoy life, but we can't save money if a life depended on it.
I had a pretty serious accident 2 months ago, and in 1-3 years will be receiving 1 or 2 large payouts. I'm keen to be smart with it and return to work. Here's the important info.
- Australian- compensation, house prices based on this.
- Currently on "compensation", getting 85% of my wage for another 4 months then 75% of my wage until fit to return to work.
- All medical expenses being paid for by compensation.
- Normal wage of $114,000 before tax. This is extremely good money despite being Australia, and relates to (for lack of better phrasing) having a good brain, good reputation, good experience and a chunk of luck. This part is important later.
- 32, retirement age of 65 or 70 in Australia so still 30+ years of work to go.
- Stay at home fiancee, 3 kids- 5 years, 3 years, 4 months.
- $40,000 of unsecured debt
- $30,000 of secured debt (car)
- Potential first payout of $70,000-$200,000 (compensation once doctors give up trying to fix me and produce a report)
- Potential second payout of $100,000-$900,000 after legal fees/repaying compensation. Most likely to be $300,000-$500,000
- Payouts cover pain and suffering, economic loss (short and long term)
- Brain no longer functioning like it used to since the accident, so I fear that I won't be able to maintain the current wage/reputation. I'm worried that with the worst case scenario, long term employment issues without appropriate compensation or planning. Brain function is being reviewed by specialists and factors into the payout figure. Lots more $$ if they decide that it isn't, but of course I'd prefer a full recovery.
- Long term pain expected.
Here's what I currently think would be best use of the payout for continued income and to plan for my kids future.
- All debts paid off
- $350,000 house in the suburbs (fair for Australia). Ideally completely paid out, if not - bank loan for whatever remains, paid off as quickly as possible.
- $5,000-$15,000 wedding
- Powerful solar panel system, to be researched closer to needing it.
- Heated swimming pool or spa bath for pain management. I know it seems like a luxury item, but long term joint pain and arthritis is basicly guaranteed, and hydrotherapy/hot baths are the only time the pain goes away without strong medication.
- Optional - if the above is all paid off, $200,000 2 bedroom apartment in wife's name earning $10,000 - $20,000 rental income to use the $18,200 tax free threshold. Either from remaining payout or bank loan.
- Income from rental to go into emergency fund in kids name to avoid tax. Emergency fund to cover unplanned appliance replacement, property repairs, medical and dental for family members, but other than that, untouched and left for the kids.
- Return to work with no debt other than what's left on mortgage repayments, continue to try and learn to save for retirement/kids future/other investments/unplanned early exit from work/fun stuff.
It might sound like I have my mind made up, but I'm honestly in need of some reassurance or direction. Is this the best investment for an impulse buying couple that wants to lower the risk of blowing it all?
Submitted June 20, 2017 at 02:14PM by Grungie_one http://ift.tt/2tpWRxB
