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Goals Review – April

April 30th, 2009 at 07:20 am

It has been a busy first third of the year.

So, basically, I have completed my emergency fund for the moment. It is currently 4-5 months in size. My wife had competing goals furniture and an emergency fund of eight months. The compromise was that we would bring it up to 4-5 months and if I were to lose my job, she could work full time and we would be able to stretch the EF to probably at least a year.

My retirement savings is just chugging along. I am at 50% of my 401(k) being funded. I'll probably have this finished at end of September. After this and the furniture, we will probably start move to college savings and reevaluating if we want more money in the EF.

Next week, I will close on my refinance for my mortgage - 4.5% for 15 years. I know there is disagreement on the best type. Maybe I should have gotten a 30 year and paid it off like a 15 year. This would have given me more flexibility and I could have bought points to have the same interest rate as my 15 year.

I think the real reason is that I got a taste of being out of debt and I like it. I dream of my life without a house payment and think of all the things I could do with that extra money. I also think of how much freedom I can have. I would no longer need a job to pay the mortgage. I could pursue my interests and be less worried about compensation.

Also, I really do want to get into real estate and charity without a risk to my family. And I really believe that pursuing some of these endeavors really means having no house payments.

Just the risk to family of having a house payment plus some mortgage payments on investments properties seems more of a risk them I am willing to take. I do fully understand leverage and good versus bad debt. I also believe you don't get involved with something unless you're in for the long haul

If you didn't have any debt or a house payment, how would that change your life? Your family's?

It's just become a very powerful idea from me.

5 Responses to “Goals Review – April”

  1. Broken Arrow Says:

    Nice to see ya again Merch. It's like you said, being debt-free means freedom from stress and freedom to pursuing things that I enjoy more of. I too would like to get to that point some day.

  2. creditcardfree Says:

    My sister just did a 15 year and she's excited about it for similar reasons...it will be paid off before she's 50. The freedom...can't put a price on that!

  3. monkeymama Says:

    I think that's the thing about the 30 year mortgage - it doesn't really make much difference in the long run - it won't be our biggest expense when it is paid off. Our life will not be much different when it is paid. That being said we have no other debts and prefer a mortgage that isn't "large"! Which is precisely why we feel this way.

    I am just glad you thought it through. The *right* answer is different for everyone. I think some people are so gung ho on paying the house off they usually don't think of the risks of taking on a long-term higher payment, is all. We've done both and the kicker is with time we have decided against the *risk* of higher payments. BUT the decision is yours!

    Congrats on the great interest rate, and all that progress!

  4. scfr Says:

    If we were not mortgage-free, I would not have started my old business (one self-employed person in the family would have been enough risk, thank you very much), and the notion of my husband trying out for the senior golf tour at age 50 would be insane. It's all about the freedom to pursue your dreams. Sounds like you get that.

  5. Petunia Says:

    Good to see you again, and glad to hear that things are going well. We have no debt and a very low house payment. Being free of a house payment wouldn't change our lives much right now. But being debt free, having a low house payment, and having an EF does bring some peace of mind, and it's allowed me to stay home with my daughter.

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