I figure we will be debt free (excludinng mortgae and car) by Nov 1st. Then we'll have around $10,000 a year to "invest" we desperately want to move out of the city. It's making my son and me physically ill. I realize we can't move right now, no matter the circumstances. We bought this house with no money down, and have only owned it for 5 years.
We already put 8% of our income into a 401k type of situation matched 5% by employers. DH has 2 full pensions coming, and a partial pension coming (all state or federal, not private companies) so I'm not worried about investing the $10k into our retirement.
Do we pay down the principal of the house?
Fix the house up for a better resale whent the economy turns around?
Put it into CDs to buy a house outright when we retire?
Buy land with cash in 3-5 years and use it for camping/ recreation/ start fruit trees so that they're mature when we retire then build a house on the prepared land?
Do a little of all the above?
I should also add that after utilities and gas for the car we have $600 a month left for groceries, car maintainance, clothing, that sort of thing. Once we pay off the last of the car (12 more months if we make normal payments) we will have $200 more each month to invest.
These budgets do not include tax returns or DH's annual bonus (usually about $700 net)
What I *want* to do, is to save $100 a month out of that $600 + tax returns + bonus for home improvement ($3-$5k a year). Then save the $10,000 a year and wait for inspiration, lol. I'd love to have $50,000 just waiting for the perfect lot of land that speaks to us. Or maybe we'll fall in love with an old farm house with some acreage, whatever it is, I'd like to have a large chunk of change to either pay cash for land or a huge down payment on a different house, KWIM?
Our mortgage is actually assumeable with only 5.5% interest, so we might be able to move our house easier considering that. If someone wanted to assume our mortgage, the more the principal is paid down, would mean more cash they would pay us instead of just taking over the loan. So in a small way it might make more sense to save the money instead of putting it on principal.
We only owe about $70,000 on the house, but I think I would rather have money in a more liquid asset than having a house paid off. I guess I'm rambling at this point, I just can't figure out if it makes more sense to have $25k in cash and put $25k towards principal, or to keep it all in cash (CDs / savings accounts) KWIM?
We already put 8% of our income into a 401k type of situation matched 5% by employers. DH has 2 full pensions coming, and a partial pension coming (all state or federal, not private companies) so I'm not worried about investing the $10k into our retirement.
Do we pay down the principal of the house?
Fix the house up for a better resale whent the economy turns around?
Put it into CDs to buy a house outright when we retire?
Buy land with cash in 3-5 years and use it for camping/ recreation/ start fruit trees so that they're mature when we retire then build a house on the prepared land?
Do a little of all the above?
I should also add that after utilities and gas for the car we have $600 a month left for groceries, car maintainance, clothing, that sort of thing. Once we pay off the last of the car (12 more months if we make normal payments) we will have $200 more each month to invest.
These budgets do not include tax returns or DH's annual bonus (usually about $700 net)
What I *want* to do, is to save $100 a month out of that $600 + tax returns + bonus for home improvement ($3-$5k a year). Then save the $10,000 a year and wait for inspiration, lol. I'd love to have $50,000 just waiting for the perfect lot of land that speaks to us. Or maybe we'll fall in love with an old farm house with some acreage, whatever it is, I'd like to have a large chunk of change to either pay cash for land or a huge down payment on a different house, KWIM?
Our mortgage is actually assumeable with only 5.5% interest, so we might be able to move our house easier considering that. If someone wanted to assume our mortgage, the more the principal is paid down, would mean more cash they would pay us instead of just taking over the loan. So in a small way it might make more sense to save the money instead of putting it on principal.
We only owe about $70,000 on the house, but I think I would rather have money in a more liquid asset than having a house paid off. I guess I'm rambling at this point, I just can't figure out if it makes more sense to have $25k in cash and put $25k towards principal, or to keep it all in cash (CDs / savings accounts) KWIM?
