Year in review and replacements

I just wanted to take a moment to reflect on the last 12 months. I was about a year ago when I started this blog. When looking at my first post that I made on December 7, 2010, I see I've improved my financial life quite a bit. A year ago we owed $210,000 on our house, we now owe around $183,000. I fully funded my Roth IRA for 2011. And I still managed to do make these improvements despite having some of the worst luck this year.

I would love to pay down our house even more this year and fully fund my Roth IRA again. However, I'm on the fence about doing so. Don't get me wrong, I'd love to those things, however our stuff is getting old. By "stuff" I mean both of our vehicles have over 100,000 miles on them, we need to replace most of the carpet in our house and my husband would really like to replace our siding and windows on the house soon. So since I can see that these things will need replacing in the next 3 years or so, I will need to keep a lot of cash on hand in order to not go into debt. It just wouldn't make sense to pay down our mortgage which has a tax-deductable interest rate of 5.75% and have little savings and then one of the cars dies and we have to take out a car loan. I also have a feeling I'm going to get pressured to get the windows and siding done next summer, and since I don't want to take out a loan to do so, I better start saving now. It's driving me crazy that a new year is beginning and I'm not rushing to get money in my Roth IRA. But since I have all year, I feel the best financial decision is to wait and save up as much money as we can and maybe next fall re-evaluate if I still can put money into the IRA or pay down the mortgage.

When I think about how much money we will need just to replace what we already have, it's depressing. Here are some rough numbers.

Amount needed to replace 2 vehicles: $30,000 to $35,000
(We'll get reliable cars that are a couple years old around for around $15K to $17K each)
Amount needed to replace siding and windows on our house: $15,000 to $25,000
(This is just a guess since we have not got an estimate yet)
Amount needed to replace carpet: $2,000 to $5,000
(Depending on how many rooms we replace)

Cash needed in the next few years: $47,000 - $65,000

Ignoring my emergency fund, I have about $4,500 saved up, so even if we spend closer to the low end of the estimates, I still have less than 10% saved. The sad thing is my income is so low, and after taxes, I probably only take home $20,000 a year if I don't work any overtime. So it'll take another two years to raise the money to replace this stuff and that's if we're lucky and can find deals.