DH (30) and I (29) just finally sold a second home that we bought months before finding MMM. While it was a blast, once we had a kid it didn’t make sense time or money wise. We have one DD (1.5) and are expecting #2. The mortgage payment that we had on the second home will be replaced by a hefty daycare payment for #2 by the end of the year. We received approximately $70,000 from the sale (and priceless peace of mind, don’t buy a second house and leave it empty often if you usually care about things…).
I have a plan in mind for the money but wanted to see if anyone else had ideas!
1) Max both Roth IRAs for 2016 & 2017 (didn’t do it yet for 2016 because of emergencies )
Minus $22,000
2) Pay off car loan 8 months early (I like less monthly commitments, yay cash flow)
Minus $3,100
3) Re-create emergency fund (depleted last year for the first time, when things go bad its never just one thing!)
Minus $10,000
4) Save the rest for unpaid maternity leave/huge 401K contributions when I go back to work to get to the max before the end of the year (live of savings instead of take home if needed)
The rest $34,900
Anyone see any other ideas? Or see anything wrong with what I want to do? No way am I pre-paying our amazing mortgage. We auto save maxing all our retirement accounts and max out the dependent care FSA for daycare (how the hell is the max only $5,000?!!).
After maternity leave is over, I will probably try to do the mega backdoor roth through my company with whatever is left over. I don’t expect to need nearly that much for unpaid leave but that’s hoping the baby is healthy and everything goes well so I don’t mind having a big buffer for that. It will go into a savings account getting 0.95% interest until leave is over.
More details of our take home and assets/liabilities below for a bigger picture if needed. We are comfortable with our expenses right now so I didn’t post them. We track everything in mint and they are firmly in control (besides for this year’s disaster of continuous one off emergencies! Yay emergency funds!).
Me DH
Gross pay $7,483.34 $7,025
Pre-Tax
Dental $- $39
Medical $- $204
Vision $- $7
Depend FSA $- $416.67
HSA $- $462.5
401K $1,421.83 $1,405
Total Pre-Tax: $1,421.83 $2,534.17
Adjusted Gross Income: $6,061.51 $4,490.83
Taxes
Federal $622.79 $387.38
State $312.78 $213.14
SS $464.23 $365.91
Medicare $108.57 $85.58
Total taxes: $1,508.37 $1,052.01
Post-Tax
United Way $4.33 $4.33
Total Post-Tax: $4.33 $4.33
Net Pay: $4,548.81 $3,434.5
Total Household Monthly Take Home - $7,983.31
Monthly Mortgage Payment:
Principle= $1,339.24
Interest= $381.77
Escrow (Taxes) = $436.36
Total = $2,157.37
Liabilities:
Car Loan: $3,165.00 @ 3.09% ($400/month)
Mortgage: $162,862 @ 2.79% 12 year loan, 9 years left
Total = $166,027
Assets:
2 working cars in great shape (don’t count my cars value in assets)
House Value (approx) =$295,000
Checking/Savings: $5,000
My HSA: $8,042
His HSA: $9,764
My 401K: $119,425
His 401K: $85,974
My Roth IRA: $20,850
His Roth IRA: $20,900
Taxable: $9,061
Total = $574,016
Net Worth = $407,989
Auto Savings Per Year: $62,350
Max both 401Ks (get 5% match)
Max both IRAs
Max HSA
We have term life insurance, wills are done, and have disability through work.
