Author Topic: What to do once the house is paid off?  (Read 2069 times)

Annie-Blake

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What to do once the house is paid off?
« on: December 02, 2014, 11:26:45 PM »
Having taken 2 months to become very mustachian, set an efficient budget and make a plan of 6 yrs to pay off our mortgage, I am having trouble working out what to do with the extra $4,000 - $4,4000 a month we will have in our pocket once the mortgage is repaid.

So far, I have been having many non-mustachian dreams...getting hubby his private pilots licence, big expensive overseas holidays, upgrading the car to an expensive SUV...it's ridiculous. I need to get all this out of my head, but I can't.  Hopefully rational thought will come in soon. 

Any tips on what we should do when it's paid off? With our current retirement plan we will be well looked after by our respective employers so no worries there about finances at all (hubby is on track to receive $35,000 per year and I will get about $20,000 per year in retirement)  ..plus we can access this at age 55 (early access).  I will be 35 when the house is paid off, hubby 37.  We have no other debt besides our house mortgage and 2 investment property mortgages.  We are keeping our fuel efficient car with 12,000 miles on it for another 7-10 years.  We have 1 child (baby) and plan to have another soon.  We have a camper trailer and will take camping holidays throughout the years as a family.  We put about 67% of our combined income towards the mortgage and live off the rest.  We have a managed fund for our kids which is set to be about $30,000 total when they reach age 18.

Any tips greatly appreciated.

Exflyboy

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Re: What to do once the house is paid off?
« Reply #1 on: December 02, 2014, 11:45:46 PM »
Save it.. preferably in a tax advantaged account.

But who cares if you have extra money?.. You already are happy living a mustacian life.. why do you need to spend anymore?... if you can't spend it you might as well save and invest in stock market ETF's and forget about it.

Then if you need a big wad of cash for something someday.. buy your dream house outright while you sell your current house for example you got it.

Put it this way.. if you don't save it, you will spend it.. and we all know where excessive spending leads us don't we..:)

Oh BTW I paid off our house in 6 years as well.

Jut wait to till you make that final paymant.. seriously bad ass..:)

Frank

Annie-Blake

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Re: What to do once the house is paid off?
« Reply #2 on: December 03, 2014, 01:31:26 AM »
Thank you Frank.  Saving really is the way to go!

Bbqmustache

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Re: What to do once the house is paid off?
« Reply #3 on: December 03, 2014, 04:15:38 AM »
Yes!  Kill off your debt, increase your retirement savings outside of work.  Do plan an increase to your fun money too, but keep this within limited, and track it like your frugal future self is depending on it!  Also, build a huge (6 months to a year's worth) of your income in a regular savings or money market account as your emergency fund.

Consider investing in 529 plans for your children's post secondary education.  Unlike UTMA accounts, these accounts always stay owned by the custodian, so you have control over what those monies are eventually spent on.  One of your kids goes into a kick butt sales career right out of high school (or heads into the military) and never wants/needs the 529?  Simply switch the beneficiary to another child. 


kpd905

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Re: What to do once the house is paid off?
« Reply #4 on: December 03, 2014, 04:47:47 AM »
Maxing out two 401ks and two IRAs is $47,000 of income per year.  That would be a good start.  If you are already set to receive a bunch of money at age 55, then you could start loading up taxable accounts to retire before then.