Monday, May 30, 2011

Tomorrow is the day!

I plan on making the phone call for the final payoff balance of the second mortgage tomorrow! We have approximately $500 left to pay on it. If I include this week's paycheck I will have saved up enough for the gutters, so that is really close to being paid off as well.

Once this is paid off, my next goal is to contribute $5,000 to my Roth IRA. So far I've put in $800, so I need to put in another $4,200. I want to contribute at least $1,000 a month. I don't plan on adding to it until the beginning of July. We received a few more medial bills in the mail in the last couple weeks, but I'm going to try to get those on next month's credit card cycle. So those will be hanging over our head for the month of June, and I want to get rid of those ASAP. I'd love to just pay those medical bills today, but we don't have the money yet. I'm sick of having to try to keep delaying charges that go on our credit card every month. I'd actually like to be a month ahead so we already have the money in the bank to pay any charges we put on the credit card. I am making a new rule for myself: Nothing is charged on the credit card unless we have the money in the bank to pay it off NOW. And the money in the emergency fund does not count. Our monthly bill without any major expenses is usually around $2,000, so I'd like to set aside at least $2,000 to be a month ahead.

I would also like to set up a small emergency fund that's not really for an emergency, but just those extra expenses that sometimes pop up. I'm thinking for things such as car repairs or minor home improvements like carpet cleaning. I'm thinking about $1,000 for that fund, and I'll call that the rainy day fund. Whenever that fund gets tapped into, I'll replenish it as soon as possible.

So here are some of my next financial goals:
  • Balance of the second mortgage: $500 (hopefully paid off tomorrow)
  • 2011 IRA Contributions: $4,200 (hopefully done October 1st)
  • Money in the bank to be a month ahead of our credit card: $2,000 (start funding ASAP, and hopefully be fully funded by August 1)
  • Rainy day fund: $1,000 (start funding ASAP, and hopefully be fully funded by September 1)
  • Anything extra: increase our current emergency fund of $3,500 up to 6 months of expenses: $21,000 (will probably take a year or so)

Saturday, May 14, 2011

Should you have a mortgage for the tax deduction?

One concern I've had now that we are paying down the mortgage is how will it affect our taxes next year. We won't be paying as much in interest this year as we did last year so it's possible we may have to even pay in next April. I found this YouTube video in which Dave Ramsey talks about a farmer buying property with over $100,000 in cash out of his bib overalls, and the farmer has some advice about whether or not it is a good idea to take out a mortgage for the tax deduction on the interest paid.

Saturday, May 7, 2011

Uncertain times

The gutter company did not charge the card right away, so it looks like I have another month to pay that bill off.  I could just pay off the second mortgage now if I really wanted to, but I'm nervous.  My job has slowed down a lot in the past few weeks and since I am temporary, I could be laid off at any time. My emergency fund is down to $3,500 (all in CDs), but I don't want to tap into that money to pay for the gutters and the balance on the second mortgage (which is at about $800).  So while I'm so close to paying off the second mortgage, I feel I should keep the emergency fund in tact and save up the money to pay for the gutters first.  Also, medical bills are starting to come in on a regular basis now for my husband's broken finger, and I don't know how much worse it's going to get.  He is still required to go to doctors checkups almost weekly and now they want to do some kind of "hand therapy" a couple times a week. I don't know how much our insurance will pay for all this. Right now we can live off what my husband makes each month, but we don't have money for extras - that's what my job pays for.  So the medical bills will probably have to be covered by my income.  I'd rather keep the emergency fund in place and know for sure that I can pay the credit card next month and the $500 (so far) in medical bills rather than have the mortgage paid off.  At least it's paid down enough that I'm only paying something like $5.75 in interest on this month's payment. It's frustrating to be so close, but even if I don't pay any extra towards the mortgage besides the regular payment, it should still be paid off in 4 months.  And that payment is in the budget using my husband's income. But, unless I'm unemployed in the next month or so, I'm guessing I'll just get it paid no later than the end of June.

Monday, May 2, 2011

The Appointment Has Been Made

Even though the calendar says May, it's been cold and rainy (and there have even been a few flurries in the mix).  Where is spring?  Anyway, all this damp weather has prompted my husband to schedule our appointment to have to gutters installed tomorrow.  Our credit card billing cycle ends on Friday.  So right now I'm just waiting to see if the charges for the gutters will be on this month's credit card or next month's.  If they get on this month's I will have to halt all payments to the second mortgage and save like crazy to get it paid by the beginning of June.  If the processing takes a few days as things often do, then I can probably still get that mortgage paid off this month.  Right now I'm a little stressed about scraping together the funds if the charges end up on this month's bill. Until then I'm trying not to spend too much, but the husband has other plans.  At least I'm in charge of most of the grocery shopping and I've been keeping that relatively low.  I might have to start looking for cheap dinner ideas because it's the only thing I can really control.