I bought this condo 6 yrs ago when I was a single mom. I took out a loan from my 401k to put down as a down payment and after a year, met and married my husband. Since then, we had 2 kids, I quit my job, and the 401k loan was taken care of through taxes. My husband is in the military and we get a housing allowance that pays our mortgage, our utilities and groceries. He gives me an 'allowance' when he gets paid. Although I could spend it any way I can, I usually end up spending it on household stuff. Not having my "own" money bothers me--especially because I used to be so independent.
Now my question--we're selling this condo and will be walking away with about $224,000.
Should I put some money away for me and my oldest daughter? She will be starting college in 2 yrs. My husband wants to use the whole $200,000 on a brand new home and the $20,000 on a car. I agree with the car--we need a minivan (he wants the '08 Tahoe).
I say just put $150,000 on a house and squirrel away the rest.
The condo is in my name only and I think that this is the only time I will have any cash like this. What do you ladies think?

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I would do the paid for house and buy a used car and save the rest. But I am debt free and would never finance anything!!! Never buy new vehicles since they are depriciating assets, if you can even consider them assets.

Well, since you asked.

If the military is going to give you an allowance, I would just put down a down payment on a house, buy another vehicle and stash the rest in the bank, in your name since it was yours to begin with.

Do you or your dh know how to fix cars? You could get an older minivan. I say for sure put something away for your daughter. I say for you, too. As for the house, I guess it's up to you? But, yes, put something away for yourself and your daughter.

I wouldn't spend the entire $200K on the house, and I also wouldn't buy '08 Tahoe.
I would invst it for now and consider various options. But I wouldn't hurry up to make it "joint" property.
You can create a trust for your child(ren) and may be put some of it in Roth IRA for yourself (actually, I can't remember if you can open Roth IRA with monies that haven't been "earned").
Anyway, my point is, the fact that your husband wants to "spend" the entire amount immediatly would not give me warm and fuzzy feeling at all. That's sounds kind of irresponsible and kind of controlling.
If I am being too judgemental, I am sorry, since of course, I don't know the whole story.

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Lena

First, about the car. My husband and I buy 1 - 2 year-old vehicles that have been rental cars either from the rental car sales lot or a reputable car dealer. They are still under warranty (most cars are 3 years.) If you buy a 1-year-old ex-rental car, they can have up to 20,000 miles on them, but you will save approximately 35% off the new price. It has worked out well for us. We get an almost new car that has rarely been sat in other than the driver's seat and the rental company has kept up the maintenance. It is a worry-free purchase that offers good value for money.

Next, you do not say whether you had changed the ownership of the condo to add on your husband's name. If it is still in your name only, you must decide if you want to keep your original down payment for yourself and any principal you paid down before you married him. And how you want to structure what you do with the (your) money from the sale of the house.

Then you must decide if you want your personal investment in the house (jointly owned) or to keep it invested separately. If you put the whole enchilada into joint ownership in a house, you will (in most states) only get half in case of a divorce and the property is sold.

You can also consider have your husband sign a legal agreement that the original investment amount is yours and any additional equity above (your original investment in the condo) is to be split two ways in case of a divorce.

My husband and I married young and there was and is no fear on either of our parts because we have been together since we were little more than kids. I can't tell you what to do, you must decide what your level of fear, risk, and trust is in your marriage. I had nothing before I married, everything we have, we have together. However, if you feel certain about your marriage, and it is just being dependent upon your husband that has you worried, you can consider putting all the money into joint ownership whether in the house, car, or other investments.

I also think you might want to meet with a financial planner to see if everything should go into the house or if investing part of it (jointly or in your own name) would be best for your long-term financial future (retirement.) Professional advice might be best.

One word of warning. I am going to make a guess that less than $50,000 is involved in your original investment. Keep in mind how your husband will feel if you want to keep it separate. How will this effect your marriage... Trust is a precious thing. People are ultimately more important than property. You must weigh all the options and the costs of each option (whether relational/emotional or purely financial).

Only you can decide what is best in your situation. However, my advice to see a reputable financial planner (one that doesn't benefit from selling you products, just one that charges a flat fee per hour would be more likely to be honest with you.) Good luck, you have a difficult decision to make.

If you don't reinvest the profit, you'll have to pay Capital Gains tax. Due to tax deferments, I would put some $ away for your retirement and for dd's college.

A Tahoe....ah yes, the vehicle in which you spend a lot to get a lot and keep spending, with the price of gas these days. The tires themselves are expensive.

I would look at the tax scenario first and take it from there. It's nice for him to dream, but he's not being very practical. I don't agree with buying used cars, but why spend that kind of money if you don't need to? $200K really doesn't go that far these days.

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I really appreciate all your input. I didn't even think about my initial investment into the condo (my down payment). I will discuss this with my husband to see if I could put that amount back into some type of IRA since I did take it out of my 401k.
I don't forsee any divorce problems in the future--we're both committed to each other and our family. But I have been divorced before so it's kind of in the back of my mind because I don't want to be a broke single mother again.
I guess we're nixxing the Tahoe--although my husband was saying that the new Tahoes would be running on some kind of fuel efficient engine. We have also gone to Carmax and looked at used Honda Odysseys. They're about $21-23,000. But at least we wouldn't have a car pay't.
As for the house, we may just live on base--for a while, at least. I know about the capital gains tax and we would probably buy a house before he goes on deployment next year. The reason why we're not buying right now is because he's stationed in the San Diego area--much too expensive for us even with a housing allowance. But I think $200,000 as a down pay't is too much. Maybe after we've lived there for a while and like it, we can put more money into the home.
I'm going to set aside some money for each child in some type of education acct--that would be fair.
Thanks again ladies for all your wonderful advice!! Christine

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I would go to a financial planner and talk to them. I don't know if I would put it all in a house because you are in the military and will be, I am assuming, moving soon. That is a lot of money to have unavailable should you need it. I know you get a housing allowance, but still.

Honestly, with that much money, I would go to talk to a professional. Not that we are not brilliant, but you want to make that money grow as much as possible. I would be putting away for the kids college and work on your retirement with that, not investing in a house and DEFINITELY not a car.

If you own and live in a property for two years, you can take out up to $250,000 profit without paying capital gains tax as an individual. As a married couple, the exemption is $500,000.

In addition, if you owned a property for five years or more and have spent at least two of those five years as your primary residence, you can also take out the same capital gains profit.

From your post, you have owned and lived in the condo for six years continuously. It appears your profit will be less than the $250,000 exemption for an individual because your down payment is not considered in profit. You will not be in a position to be liable for capital gains tax according to your post.

Consult with your real estate agent and s/he will explain this to you. You still have to declare the profit on your income tax and you might want to consider having your taxes professionally done this year to make sure they are absolutely correct.

About buying the 1-2 year old ex-rental cars (as my husband and I do). The rental agency keeps a detailed maintenance record of all maintenance done on the vehicle. You can check the vehicle's maintenance record and can see if the vehicle is a "lemon" from new. (We all know someone who has bought a new car and had severe problems with it from new.) Being able to check a vehicle's record for the first 20,000 miles helps avoid buying a "lemon".

We currently have a 2003 Pontiac Grand Prix that we bought for $12,600. It sold for $21,000 new in 2003. It is stamped May 2003 in the door. We bought it in April of 2004. It had 21,000 miles on it. We checked its maintenance record before buying it. We saved almost $10,000 by buying it one year old.

My husband also has a 1997 Ford 250 truck. It has 65,000 miles on it. He bought it for $8750 from the original owner who hardly drove it (48,000 miles on it when we bought it.) It sold new for $27,500. For that size engine, it didn't matter. Yes, the truck is older, but the mileage on it is extremely low for its age. We got detailed maintenance records for it from the original owner.

We owned a 2000 Isuzu Trooper before the truck. We bought it from a dealer. Low book on the vehicle was $11,500 when we bought it. We got it for $9,000 because it sat on the lot for 4 months and no one was buying it. When it was first on the lot, the price was $13,600. It kept coming down. We wanted it, but couldn't afford to pay cash for it. We went back to the lot to look again, and it finally came down to $8995. We had no problems with it. We sold it because my husband wanted a truck.

A vehicle is a depreciating asset. We do not buy vehicles we cannot pay cash for. We are putting our money into a house that we are building to live in two years to sell (and take out our capital gains exemption.) It is how we will finance our retirement (to build and sell after two years over and over).