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Goals Review - June

July 1st, 2009 at 02:51 pm

So I made my first payment on my new mortgage. I was used to putting $480 to principle a month. This month I put $1,376 towards principle. It was actually $50 more then the interest payment. Just think that I am now paying more principle then interest. What a great feeling.

I estimate that 9/2010 I will have caught up with my old amortization schedule, where the principal on the mortgage would be about $330k. So under the old 30 year, I would pay about $9k off the mortgage over 14 months. In the new mortgage, I will be paying off over $21k.

It just nice to see this pay down accelerating, feeling that I am making progress.

As for my other goals. I plan on completing my 401(k) contributions in August. I have about $4,000 in contributions left.

I am getting a little anxious to finally start contributing and setting up 529 plans for my sons. Granted, they are young (4 and 1), but these really need to get started. $18k may be a little too much to bite off this year. But, it's good to have goals that you need to stretch for.

So, if you are following the Dave Ramsey plan, I would be on step 4 planning on attacking step 5.

As for step 6, paying off the mortgage, I keep going back and forth. If I had a 6% 30 year mortgage, I would probably try paying that off quicker. But a 15 year at 4.5%.... I'll have the house paid off by the time the kids hit college, and 4.5% is really more like a 3% loan because the tax write off with the interest. It is getting to the point where you could argue that you could outperform the mortgage for very little risk.

On the other hand, getting rid of that monthly nut does reduce a lot of stress (not that I have a lot of financial stress) and frees up a lot of cash flow. It would allow me to start looking into opportunities that really interest me without regard to income.

Right now, I am kind of stuck where I may not be in my dream job but it does pay some hefty bills. So, when I look for jobs, income is first enjoyment is second.

But for that reason, I am leaning towards paying off the house early. Of course, I still have time. I don't plan on coming to a decision until the 529s are fully funded. Just mulling it over in the old mind.

Don't forget, we are half way through the year. Are you still on top of your goals for 2009? What are you planning to accomplish in the next 6 months?

2 Responses to “Goals Review - June”

  1. milehighgal Says:

    I think you've hit on something important: the freedom, both mental and financial, you will feel when the mortgage is no longer there. Even at an extremely low rate, it tends to hang over your head a bit.

  2. ceejay74 Says:

    Great job this month! As for your dilemma, I mean, they're both GOOD choices, so in the end it doesn't matter a ton which you choose. Just go for whatever moves you! If you're like me sometimes you'll want to pay the minimum and sock away money, while other times you'll want to throw everything you've got at that debt. It's OK to shift gears to make yourself happy, because neither is an unhealthy financial behavior.

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