Critique my budget (very long, sorry!)

[critiquemybudget]

Poof

[ijack]

I would pay off the 5% SL before you pay more on the mortgage. Also, I might just contribute the extra $300/month to a savings account instead of adding it to the mortgage, but I'd need someone to do the calcs first.

[Deleted]

Do you have life insurance other than whole? I would definitely get term for both you and DH with some of your left over.

[Deleted]

Sept 27, 2012 12:18:53 GMT -5 ijack said:

I would pay off the 5% SL before you pay more on the mortgage. Also, I might just contribute the extra $300/month to a savings account instead of adding it to the mortgage, but I'd need someone to do the calcs first.

I also agree with this.

[Deleted]

I would pay off the SL at 5% before the car also. I wouldn't bother paying more towards the mortgage since you expect to move and already have a 20 year loan.

[Deleted]

$50 for BJ's Holla!!!

[critiquemybudget]

Sept 27, 2012 12:21:32 GMT -5 dbsk8dance said:

Do you have life insurance other than whole? I would definitely get term for both you and DH with some of your left over.

Yes - although it is through our employers. We are currently looking into private term policies, but that would be paid for with the money we'd save from paying into the employer plans. It wouldn't have to come out of the left over (or at least not much of it).

[critiquemybudget]

Sept 27, 2012 12:23:08 GMT -5 @missy1 said:

I would pay off the SL at 5% before the car also. I wouldn't bother paying more towards the mortgage since you expect to move and already have a 20 year loan.

The reason we're paying more to the mortgage is to build equity, since we have very little now. The 20 year loan helps with this, but we would likely be upgrading to a larger/more expensive house and will need a significant downpayment to do so. Instead of saving in cash for another DP, we would put it into our current mortgage so we pay less interest in addition to saving the money.

Thanks all, we'll focus on the SL next, then the car.

[Deleted]

Sept 27, 2012 12:54:29 GMT -5 critiquemybudget said:

Sept 27, 2012 12:23:08 GMT -5 @missy1 said:

I would pay off the SL at 5% before the car also. I wouldn't bother paying more towards the mortgage since you expect to move and already have a 20 year loan.

The reason we're paying more to the mortgage is to build equity, since we have very little now. The 20 year loan helps with this, but we would likely be upgrading to a larger/more expensive house and will need a significant downpayment to do so. Instead of saving in cash for another DP, we would put it into our current mortgage so we pay less interest in addition to saving the money.

Thanks all, we'll focus on the SL next, then the car.

The only problem with this plan is that you aren't guaranteed that your house will be worth the amount that you are paying into it. You are banking on the asset staying static or increasing in value, but we've all seen that real estate is not necessarily the safest asset to put faith in.

That is why I seconded ijack's statement of simply putting that extra money into a savings account where you are SURE that the money will be there for a down payment in the future.

[Deleted]

Paying down the mortgage does help with equity when it is time to sell. We used to do that too when we had a 30 year mortgage but with a 15-20 year mortgage, you are already paying extra so it doesn't really make sense. Also, that interest is deductible while paying interest on SLs or a car isn't. Investing your money in the market would have a better return than paying your house down.

[h]

I think the travel and home decor line items seem high, especially in relation to e-fund and college savings. It doesn't make sense to me to spend $800 a month on travel and home decor when you don't have a fully-funded e-fund or other savings and are wanting to pay down debt.

I also agree that you need term life insurance if you don't already have it. And I would drop the whole life if you can do so without losing money.

[Deleted]

Sept 27, 2012 12:54:29 GMT -5 critiquemybudget said:

Sept 27, 2012 12:23:08 GMT -5 @missy1 said:

I would pay off the SL at 5% before the car also. I wouldn't bother paying more towards the mortgage since you expect to move and already have a 20 year loan.

The reason we're paying more to the mortgage is to build equity, since we have very little now. The 20 year loan helps with this, but we would likely be upgrading to a larger/more expensive house and will need a significant downpayment to do so. Instead of saving in cash for another DP, we would put it into our current mortgage so we pay less interest in addition to saving the money.

Thanks all, we'll focus on the SL next, then the car.

How old is DS? If he's not starting middle school for another 8-9 years I would stop the extra mortgage payment until your kids are out of daycare. I'd double the college savings when #2 gets here (or now if you choose) and pay extra on the 5% loan, then build a larger e-fund, then attack the car loan.