Sunday, September 6, 2015

What can paying an extra $2,000 a month towards your mortgage do?

I had been saving for a new-to-us truck for about 2 years now. We finally saved up enough money and bought the truck in July. Now that this financial goal has been completed, I wasn't really sure what to do next. Of course saving for our next big purchases came to mind. We would like to go on a nice vacation next year and get a few things around the house updated. I increased my 401(k) contribution from 10% to  20% (the max the company will allow). I thought about maybe putting some money into my Roth IRA, but  I had been getting a little frustrated seeing that huge mortgage balance on our mortgage statement. It had been getting smaller each month, but very, very slowly.  I just didn't seem to be going fast enough for me. So I figured I'd give it a little boost and put an extra $2,000 towards it this month. Just doing so knocked off 5 payments. Our regular payment is $1,017, so paying $2,000 now will mean we'll be paying $5,085 less later. I was going to change it back to $300 extra (which is what I had been doing the past couple months), when I opened my account I saw a link that showed me how view how extra payments could help pay off the mortgage faster. If I was to continue paying an extra $2,000 a month, this is what our mortgage (with a current balance of $158,813) would look like: 

(Click image for larger version)


Wow - we could be mortgage free by 2020 and knock off 177 payments (177 x $1017 = $180,009)!! I probably won't be able to continue to pay $2,000 a month (that's about what I take home after taxes), but after seeing this, I think I'll be paying an additional $2,000 for at least one more month. 

Wednesday, July 15, 2015

Net worth update - beginning of 3rd quarter 2015

Assets:
Approximate value of our house: $227,949 (+$7,250 since last quarter) (Estimation from Zillow)
Roth IRA: $43,511 (-$20 since last quarter)
Simple IRA: $7,978 (+$64 since last quarter)
Regular IRA: $6,645 (-$184 since last quarter)
401(k): $3,950 (+$2,505 since last quarter)
Lending Club: $221 (same as last quarter)
Savings (including emergency fund): $45,288 (+$9,871 since last quarter)

Total assets: $335,542 (+$19,486 since last quarter)

Liabilities:
Mortgage: $161,936 (-$1,816 since last quarter)

Total net worth including our house: $173,606 
Difference since last quarter: +$21,302

Calculation of my net worth not including the house:

Assets:
Roth IRA: $43,511
Simple IRA: $7,978
Regular IRA: $6,645
401(k): $3,950
Lending Club: $221
Savings (including emergency fund): $45,288

Total assets: $107,593

Liabilities:
Mortgage: $161,936

Total net worth not including the house: - $54,343
Difference of +$14,052 since last quarter

I'm pretty happy to see my net worth is still going in the right direction! Wow, that little 401(k) balance is raising rapidly. I've been working lots of overtime lately, so not only have my paychecks been bigger, but my 401(k) contributions (and therefore the company match) have been larger. I don't even think about the 401(k) much because it's an automatic deduction, so it's a good way to easily save money for retirement. Ever since I left the job with the Simple IRA over 10 years ago, I've always had to make a decision that I have going to invest in my IRAs, so I've always kind of mentally wrestled with whether or not I really wanted to put that money and not see it again until retirement. Now I don't have to decide (although I am kind of debating about putting some in my Roth IRA this year as well). If you have the option to invest in a 401(k) or something similar (403(b) etc.), I would highly recommend you do so!

Friday, April 24, 2015

Net worth update - Beginning of 2nd quarter 2015

Sorry this is so late... Where does the time go?

Assets:
Approximate value of our house: $220,699 (-$2,276 since last quarter) (Estimation from Zillow)
Roth IRA: $43,531 (+$1,845 since last quarter)
Simple IRA: 7,914 (+$388 since last quarter)
Regular IRA: 6,829 ($256 since last quarter)
401(k): $1,445 (new this quarter)
Lending Club: $221 (same as last quarter)
Savings (including emergency fund): $35,417 (+$7,076 since last quarter)

Total assets: $316,056 (+$8,734 since last quarter)

Liabilities:
Mortgage: $163,752 (-$1,648 since last quarter)

Total net worth including our house: $152,304
Difference since last quarter: +$10,382

Calculation of my net worth not including the house:

Assets:
Roth IRA: $43,531
Simple IRA: 7,914
Regular IRA: 6,829
401(k): $1,445
Lending Club: $221
Savings (including emergency fund): $35,417

Total assets: $95,357

Liabilities:
Mortgage: $163,752

Total net worth not including the house: -$68,395
Difference of +$12,658 since last quarter

It's nice to see my net worth is heading in the right direction. As you can see I have a new entry this quarter: a 401(k)! I recently got a new job with not only an increase in my hourly wage, but it also has benefits including health insurance, paid vacations and a 401(k)! I am currently contributing 10% of my income into the 401(k) and I was pleasantly surprised to see it is well over $1,000 already. Some of that is not fully vested yet. I believe I have to be with the company 5 years before their matching contributions are 100% vested.

Friday, January 2, 2015

Net worth update - beginning of 2015

It's time for a check in on my net worth... here are the current numbers:

Assets:
Approximate value of our house: $222,975 (+$21,319 since last quarter) (Estimation from Zillow)
Roth IRA: $41,686 (+$1,976 since last quarter)
Simple IRA: $7,526 (+438 since last quarter)
Regular IRA: $6,573 ($2,260 since last quarter)
Lending Club: $221 (same as last quarter)
Savings (including emergency fund): $28,341 (-$14,024 since last quarter)

Total assets: $307,322 (+$11,969 since last quarter)

Liabilities:
Mortgage: $165,400 (-$1,630 since last quarter)

Total net worth including our house: $141,922
Difference since last quarter: +$13,599

Calculation of my net worth not including the house:

Assets:
Roth IRA: $41,686
Simple IRA: $7,526
Regular IRA: $6,573
Lending Club: $221
Savings (including emergency fund): $28,341

Total assets: $84,347

Liabilities:
Mortgage: $165,400

Total net worth not including the house: -$81,053
Difference of -$7,720 since last quarter

Our savings have dropped a bit due to getting our house re-sided. I thought we overpaid:( It's disappointing to work and save for so long and then spend it so easily. Sadly my husband want to buy a brand new truck. He bought a brand new Ford Ranger in 2001 and I think he said he paid $14,000. To buy a comparable brand new 4 wheel drive truck now (they no longer make the Ranger), it would cost about $40,000 after tax and fees. Wow!  Has inflation really been that bad?