Author Topic: Where I do put this extra money?  (Read 2059 times)

aarivers

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  • Age: 37
  • Location: Alva FL
Where I do put this extra money?
« on: April 15, 2014, 12:17:34 PM »
Need some advise from my fellow mustacians on where I should be putting my wife's salary for short term savings and then long term down the road. Here's some details of our situation.

Salaries: I make $50k and she makes $60K per year before taxes. We currently live off my salary with a little left over to throw into savings, I'm trying to get down to using half my income for expenses, but it's a work in progress. Her salary is pretty much free to invest now.

The Current House: 2200 sqr ft ranch with 2.5 acres about 20 miles from mine and my wife's work. Zestimate $213k but more like $250k with the renovations we have done to it. We owe $180k at 3.5%, payment is $942, but we pay $300 extra to the principle.

This is where my question lies. Our goal is to move to a smaller house next year, preferably within biking distance of both our jobs and in the $150k range at about 1200 sqr ft. So since we are planning on moving next year, to me it doesn't make sense to put that extra $300 every month into the principle, but take that and lump it into my wife's salary and invest that into a short term savings plan so we can build up our cash to buy this new house outright and get rid of this mortgage, am I right? Also is there anything out there that I can save her salary in, that will yield better than a .05% "savings" account at our bank for this short of period?

I currently have $14k in a LendingClub account (thanks to this sight) and $40k in that wimpy .05% "savings" account. So if there's a better way to make that money work for us while adding her salary to the 40k over 1 year to try and bolster our cash buying power on the next place, please show me the light!

Thanks

aarivers

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  • Posts: 4
  • Age: 37
  • Location: Alva FL
Re: Where I do put this extra money?
« Reply #1 on: April 15, 2014, 01:18:56 PM »
A question: are you investing at all in tax deferred vehicles like IRAs, 401ks, 403bs, etc? If it were my finances, I'd be maxing those before trying to pay off my mortgage early or buy a house in cash.

Currently I am not eligible for the 401k through my work and do not have anything else setup for saving before tax. My wife will be eligible for her 401k soon and we plan on deferring the max to that plan once it comes up. So why would you max those out and slow down the house payment instead of pay off the house and have that extra money to invest earlier?