Choosing Where Your Money Goes?

[TheRootedNomad]

In our quests to become mortgage free, fix the house, take our EF to the next level, and save for retirement I find myself frequently rethinking where "extra" monies should be allocated.

This is summer season here and the time of the year where DH makes more money. It is amazing how many people will NOT go without AC but will go without heat.

For the most part we're ahead of the game with the mortgage but still in a position where paying say $1000 extra saves us an additional $750ish in intrest.

The EF is at a VERY comfortable 4 months if we BOTH lost our jobs and 8 months if one of us does. We are very thankful that there are not any storm clouds on the horizon for either of us. That said we are still trying to build to a comfortable 8 months.

Our house is around 60 years old. It was built some time in the late 40s/early 50s. We have been slowly doing things ourselves for a few years, including adding a 400+ sq. ft. addition. There are things we have been putting off specifically because it makes sense to do the repairs/upgrades/renovations in a certain order. After several years of this though I get VERY FRUSTRATED looking at some of the things that aren't "next" on the list. To be fair it isn't all about money in this catergory. Some of it is about time.

All of that said we are now VERY close to our big inside money eater project....the kitchen . We will have the hallway and living room, along with the newly moved wall and various smaller projects finished off before the holidays, when we'll take a break from home projects. The kitchen wall will be moved out, some cabinets taken down, the ceiling fixed from the wall being moved, ect. also before our holiday break. Starting the beginning of next year the money eating part will start right when our income is at its lowest for a few months (but when we have the most time). If you've followed me this far you can see that that means that to SAVE the money to do this we need to be allocating money for it now. (And for those of you that will say ..."you knew this was coming" I answer "yes, and we do have a fund but it is not where it should be as we have been taking care of LOTS of things with the house") A kitchen is not easily done in bits and pieces.

With all these "things" in the works DH and I sit down frequently and decide where to "put" the extra. Generally what happens with it is that it goes in a growing EF or set aside for home stuff. Every time I look at those numbers though my brain starts doing the calculations of "if we took $4000 of that and put it on the mortgage we would save an additional $3000 in intrest the percentage rate on that.....and so on". When we send a chunk more than our current snowballed mortgage payment to the mortgage I think " we're already paying extra on the mortgage maybe we should have chunked that into the kitchen fund or the EF since......and so on." Most of the time the decision doesn't get changed but that doesn't mean the ideas don't keep circling in my head.

This was kind of long winded but I was feeling wordy this morning and have been wanting to post this for awhile. Does anyone else find themselves rethinking money allocations on a frequent basis? even when your pretty positive you've made the right choice?
Where do you allocate your extra/found money too? Is it the same place each time or do you have multiple places you choose from each time? I'm hoping this spurrs some discussion on how individuals deal with their money allocation and choices.


----THIS IS NOT A WHAT SHOULD I DO POST. I would love to know how others handle their own choices. What those choices are. Even, if you so choose, how you would handle my situation. I just want to be clear though I am not asking for advice I am just posting a topic of conversation.

[itlw8]

welcome to my life LOL

We started our kitchen last summer and yes started is the key word to get what we wanted we had to learn to build the cabinets ourselves. we have done all the work except the electrical and plumbing

We still need to learn how to make the doors or save the money to have them made.... We have already spent $5000 with the appliences and cabinets but far less than if we bought them.



Several weeks ago we started on our sons kitchen the wall has now been moved 4 feet and a new floor has been put down as we left dil was grouting the floor she was very happy..... She will have to wait for her cabinets.... either save the money or wait til we have time to make theirs.... she wants to see the finished doors first. LOL

but still she went from a tiny 8x13 kitchen with a nasty floor to a 12 x 13 kitchen with a lovely tile floor for under $800 not bad.


it is a constant juggle the time and money when you own a house.

[suki]

We are constantly adjusting our money allocations due to changing priorities. Right now, priorities are hubby's medical visits and getting the daughters' moved up to college and set for the school year. After that, we'll re-evaluate. I had money set aside for hubby to get topsoil for his garden. We may need that to pay for these costs... so, we'll see.

When we remodeled our house, we seriously bargained shopped for the kitchen and saved over half of our original estimated costs by going with unfinished cabinetry that we finished ourselves, making our own countertops, doing the trim work ourselves, etc. Because we re-prioritized our kitchen wants and needs, looked for deals, etc... we were able to well afford it with what we had.

In a general sense we are always taking another look at where our money needs to be spent. But, after the joint decision is made, I don't keep thinking about it. I let it go unless it's a really urgent matter to be re-evaluated.

[The Muse]

Our finances are pretty simple so there's not a lot of choices or adjustments to be made. It's just DH and me, no plans for kids and no debt except for the mortgage.

We contribute the max pre-tax dollars to our retirement plans. After that, we throw between $5K & $10K extra at mortgage principal every month, pay the utilities and whatever else is due, and put the rest in investment or savings accounts depending on what the market is doing. Right now, it's going into savings. I'm trying to adopt the "stocks are on sale" mindset, but I've been watching our assets shrink over the past couple of months and it's disheartening. Bonuses go toward mortgage principal.

When we feel like upgrading something in the house (did the kitchen 2 years ago) we either pay for it out of the cash flow coming in, or take it from savings. Savings is different from our EF, which has a year+ living expenses. I see savings as a holding tank vs. security net, though I do like to see it grow.

My top priorities are to pay off the mortgage and build net worth through savings and investments. Once this house is paid off we'll look into getting a second home; either a country house on acerage, or a lake house. That's where we hope to retire in our early 50's.

[Jenna]

Where do you allocate your extra/found money too? Is it the same place each time or do you have multiple places you choose from each time?

to my goal of the moment --> currently it is "funding my ROTH."

earlier this year --> it was paying for "The Big Move"

next up --> "saving for the house down payment" while "funding my ROTH" & "saving to buy a newer car"



ugh

it's depressing to think of all the upcoming expenses.

that's not even taking into consideration that I may want to start a family in the next couple years.

[Jenna]

We contribute the max pre-tax dollars to our retirement plans. After that, we throw between $5K & $10K extra at mortgage principal every month, pay the utilities and whatever else is due, and put the rest in investment or savings accounts depending on what the market is doing.

WoW.

nice

*Jenna ponders what she would do with $5k... let alone $10k
hmmmmm

[missmanny]

I constrantly rethink ahat I am doing, mostly I make my decision about where the money should go and I do it straight away before I change my mind, once I've done it I am usually at peace with my decision - It is just when I agonise over it that I find myself re thinking and re doing calculations.

[Greebo]

Since we started working on a joint budget instead of a mix of joint and individual, we've re-assessed our priorities about three hundred and ninety two times in one month, it feels like.

I think we'll always be discussing, "do we want to increase this?" and "do we want to lower the goal on that?" - though I suspect the discussions will be less frequent as we settle into our new plan.

[dwallyfam]

Right now with the economy the way it is we are just sticking everything in the savings and we talked that we will decide at the end of the year what to do with it.

[knitnmom]

Yep, we do this all the time. I have things set up now to pay extra towards stuff, but I also have other stuff coming up that needs to be funded. (hubby's party, niece's wedding, etc) Hubby and I are very committed to getting out of debt, but we also have to be vigilant in making sure we don't incur any new debt!

[Telephus44]

Honestly, we used to hardly ever talk about it, because any extra money went into the "downpayment for a house" fund. Of course, we just accepted an offer to buy a house, so now we're having extensive discussions of what resources exactly we want to tap, and how much, etc. And then in what priority we want to bring them back up.

[Wendy99]

I change it ALL the time!!!! ... Even just the sinking fund money & savings in my budget all the time .. should I take the sinking fund money use it towards the EF, then close to when the SF things are due save there etc etc, when do I save for a car, it's a circle lol changes all the time .. but once we do committ to something we do it . ie. saving for the roof and patio door .. we committed that we were not going into debt for that and focused all we had on that .. it's hard and exciting at the same time lol