The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Sareybox on October 11, 2015, 01:54:09 PM
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Hi,
I'm new to MMM and I've done a spending 180 in the last 4 months. As a household (2 adults & 2 young children) we've gone from spending ~140% of our income to ~50%.
The other 50% is currently split between a 4% savings account & credit card debt repayment.
Our credit card debt is ~£21,000 (I know, punch away) down from £26,000 in July. All of this is at 0% interest due to balance transfers. Balance transfers cost less than 2% per year (which is the reason that not all the surplus money is going towards paying these down).
Our short term goal (4 years) is to save enough to live on for a year & a 25% deposit (plus fees) for a property so we can start flipping houses for a living (a long held dream job for SO & me). I reckon this figure is around £60k.
My work pension has a 3% employer match, I'm contributing 3% currently. The maximum I can contribute is 100% of my salary, tax free.
We owe £140k on a £200k+ house. We're refinancing the mortgage next month to ~2%.
So, if you were me (bet most of you are glad you aren't) where would you direct those little money soldiers & why?
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You need to save enough to live on for a year AND pay for the building materials to flip the house. Are you not concerned that the balance transfer chain will run out at some point?
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So, if you were me (bet most of you are glad you aren't) where would you direct those little money soldiers & why?
If I were certain that the CC carrying cost would stay at 2%/yr, I would pay the minimum on that and direct all available money to my dream.
As STTGU notes, however, at some point you may find yourself stuck with ~20% CC debt. If that is reasonably likely to happen, I'd pay off the CCs first, and then chase the dream.
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100% of your salary, tax free??? Actually I do wish I were you! The US government does not allow this in retirement plans here, such as a 401k.