July Mortgage Payment and what to do with ~40K, give or take

Last month (June):
Balance:$9,837.36
Years left: 0.75
P =$1,170.83, I =$43.57, Escrow =$812.79

This month (July):
Balance:$8,661.89
Years left: 0.666666666667
P =$1,175.46, I =$38.94, Escrow =$812.79

Amount saved from prepayment:  $0

Before going on leave we saved up $84K in the slush fund so that we could live in Paradise (where everything is at least 2x as expensive as where we normally live) on a lower income without worrying about money.  It looks like we will have about 40K leftover (give or take) after subtracting out our summer emergency fund and moving back expenses.

We have been doing quite nicely since DH quit academia and got an industry job.  I still can’t believe our good fortune.  (Though I am not sure how long it will last!)  Definitely a different world than the one we were inhabiting even 3 years ago.  For the first time in a long time there aren’t obvious places to stash more money.

Last time we had ~25K extra, we threw it into the mortgage.  Before that when we had large chunks of extra untargeted money, we saved them in retirement vehicles.

So, for people who aren’t long-term readers, here’s where our monthly nut after bills has been going since DH got his industry job:

  1. We max out all of my retirement options
  2. We pay up to the match with DH’s retirement (it has bad fees)
  3. We are no longer eligible for tax advantaged IRAs unless we do a backdoor conversion.  So we don’t do IRAs anymore.  If we were eligible we’d totally to this.
  4. $500/mo in each child’s 529 (This is not enough for 4 year private schools without financial aid, but DC1’s is getting too big for 4 year public or even a 4 year private should our income fall and we become eligible for financial aid.  I debate on whether or not to stop contributing, but figure we can stop DC2’s contributions later if DC1 has too much.)
  5. Previously we had been saving for a year in paradise with me at half salary, but we won’t be doing that anymore.
  6. Mortgage.  You will note that the mortgage runs out in 8 months and there’s not much point to prepaying at this juncture.

We have a LOT of money put away for retirement and for college.  Most of our money is in retirement savings, and most of that money is in the most difficult to tap form of retirement saving (the 403b).  That makes maxing out DH’s retirement account with the high fees potentially less attractive than saving the money outside of retirement accounts (in case we move to Paradise someday and want to buy a house), or you know, just spending it.

In terms of taxable stocks, we have around 125K in an account we could just tap.  We have about $300K in home equity.  Sadly, this is not enough money to buy a house in paradise with 20% down in a good school district, and it would be pretty risky to try.  We do, however, think this makes a pretty reasonable secondary emergency fund.  Combined with our primary emergency fund in savings, we figure that if DH loses his job we’ll be ok just living on my salary where we normally live until we figure what else to do.

So that leads us to this money we saved for Paradise but didn’t spend.  Here are our options (in no particular order):

  1. Start maxing out DH’s retirement even though it has crappy fees (~15K/year over what he’s already contributing).  We may do this anyway as we’ll probably be generating a surplus with both our salaries next year.  [update:  I miscalculated, it’s actually only 5K more than what he’s currently contributing– we put in the request to max out today.]
  2. Figure out how to do a backdoor IRA ~11K
  3. New car (if my 2005 Hyundai Accent that I love continues to have check engine problems once we get back) ~$30K
  4. Kitchen Renovation ~$30K.  The triangle just isn’t quite right and our countertops suck and the sink is chipped.  The problem with this is that it will take our time which will be in short supply when we get back and there’s been a small construction boom in our town meaning that construction costs are higher and take longer than usual.  We don’t know how long the boom is going to last.
  5. Bathroom renovation ~$10K.  We don’t really need this, but we’d kind of like to replace the plastic shower with a tile one and maybe get rid of the gold accents in the bathroom.  Totally cosmetic and unnecessary.  This would be unlike us since we don’t normally replace things until they need to be replaced.
  6. Xeriscape the lawn ~$?? We have no idea.  Problem:  Bermuda grass may make Xeriscaping an expensive failed dream unless we can get more trees to stay alive (an endeavor we’ve already lost quite a bit of money on).
  7. Solar panels ~$20K.  There’s basically nobody in our town with solar and we’re wondering if there’s a reason for that.  Lots of people do, however, have the black shades over the outside of their windows.
  8. Charity– I don’t think we’re going to direct this money to that.  We usually do charitable giving in December.
  9. Looking through old “things we wish we had money to do” posts, I notice that we wanted to replace carpet with hardwood in our dining room.  We probably still want to do that, though it’s not a high priority.  I think that would cost under $5K, though I’m not sure how much under.

Also… since we’re not saving for Paradise and we’re not putting extra to the mortgage and DC1 is trying out public school… we’re probably going to have extra untargeted money once school starts and I start getting paid again.  I don’t yet know how much that is going to be.  Or what to do with it.  I’m thinking DH’s retirement (even though it has ridiculous fees) or backdoor IRA Roths (the lower fees may make the hassle factor worthwhile) and then more taxable stocks. But I dunno.  It’s like, we would need so much more saved to be able to buy a house in Paradise, but we don’t need that much to live in our small town.  But might as well save until there’s a good reason to spend, you know?

What would you do with a 40K windfall (of money you’d saved but didn’t need in the end)?  If you’d save it, how would you save it?  If you’d spend it, what would you spend it on?

72 Responses to “July Mortgage Payment and what to do with ~40K, give or take”

  1. moom Says:

    At the moment it would go in our mortgage offset account – our regular bank account where every dollar is a dollar less of our mortgage that we pay interest on.

  2. Miser Mom Says:

    Do you have the option of a Health Retirement Account? I’ve been eyeing that for us. I have one through my employer, that they put money into, and that I’m allowed to contribute to in a tax-advantaged way (but haven’t yet).

    • nicoleandmaggie Says:

      Nope! Those are a really good investment because they’re twice tax advantaged. Even better than IRAs given you’re extremely likely to have health care costs in retirement.

    • Leah Says:

      I love my HSA! Definitely do that if you have the option. It’s cheaper for us and has been better in the long run than paying premiums for health insurance. Obviously, run the math on your plan. Our employer adds in some money to sweeten the pot. You can use the money you save for health expenses in any year. You can even go back and get out health expenses from a few years ago as long as you have receipts in case of an audit.

      • Ana Says:

        Is the health retirement account different from an HSA? I’m not too familiar with either, though my employer does offer an HSA (I haven’t done my research, maybe it would be better for us than the insurance premiums…will need to figure this out before next April)

      • nicoleandmaggie Says:

        If it is a Health Savings Account, they’re the same. If it’s a Health Spending Account, then they’re different.

      • Leah Says:

        We have a high deductible plan we call the HSA plan — $6k individual deductible and $12k family. At our work, we pay a premium each month unless we pick the HSA plan. Next year, everyone has to go to HSA. Instead of paying a premium, I put that amount (plus more) into an account.

        Preventative care is completely covered, but anything diagnostic isn’t until we meet the deductible. So, I do pay $180 to go to the doctor if I have an illness/issue. It does make me think twice about going to the doctor unless I’m really not feeling well (tho I’ve always been reticent to go easily anyway). I do go for big things. I do pay for bloodwork other than a small slate that is considered “preventative” (tho once you have an issue with one of the #s, subsequent testing is not preventative, ugh).

        Mostly, what I like is that I save up money in an account that builds up over time. My employer puts in $2k for me each year (since we’re on the family plan), and I add another $4,650 each year to hit the limit. Thus far, the only year in which we’ve hit our deductible was the one in which I had my child.

        In the long run, we have saved money over having a premium. The main thing is to be okay with having some big bills come in. You have to be able to save. Some of my coworkers live paycheck to paycheck, and this will be stressful for them.

      • Linda Says:

        If you have no health issues, an HSA is great. I’m glad I’m not forced into one, though. I blow through at least $7K a year on my own for insurance premiums, co-pays, maintenance meds, and labwork. The HSA limit for an individual is only $3,350 in 2016. Based on my income, I wouldn’t be able to deduct the remaining medical expenses on my taxes, so my only way to get a tax advantage on medical stuff is to have it withheld pre-tax through my employer for insurance premiums and medical flexible spending.

      • Leah Says:

        Linda, the HSA would be cheaper for you if you are spending $7k a year. We have zero premiums and a cap of $6k each a year, and our employer actually throws in $3k if you end up hitting the $6k (staggered at various amounts and triggered by using up more of the deductible).

        We sat down and ran through a variety of scenarios, cost-wise. There’s a donut hole of perhaps $500 where the HSA was more expensive than the other plans we have available (if you include copays, premiums, etc etc).

        All depends on how much your deductible would be, what your employer provides, etc. I can’t speak for all plans. But I know our workplace really is the best with the HSA. So many of my coworkers are balking, but the biggest issue is needing to be okay with getting a huge bill and realizing you’ve either already saved or will make incremental payments on it as you save into your HSA. It is helpful if you have a few years of lower spending so you can save up more in the HSA account as a buffer.

      • Linda Says:

        I’m glad the HSA your employer offers works so well for you. I, too, ran the numbers on the plan I’m offered and it really doesn’t work for my situation.

  3. Solitary Diner Says:

    What a great dilemma to have! I’d probably stick some of it away in a secure account in case of emergency and apply some of it towards renovations or something else I want/need. But I’m not entirely sure, as for the last two years all of my money has gone towards debt repayment!

  4. Susan Says:

    Can DH do an in-service rollover from his sucky 401k? That might make it worthwhile to put up with the fees for a bit. However, rolling it over to a tIRA would prevent him from doing a backdoor Roth.

    • nicoleandmaggie Says:

      I have no idea. It sounds like we should explore the backdoor Roth option before that. I’m not convinced at this point that we should be diverting more towards retirement at this point. In lieu of contributing more than the match to DH’s account, I max out my 457 on top of the voluntary 403b and the required 12% of my salary. (DH and I have almost identical salaries.)

  5. Leah Says:

    I’d do the bathroom first, honestly. Less money, and you can try out a contractor. Plus, having nice bathrooms is so luxurious in an every day way. I’d also do the flooring you want to replace — think of not getting food junk or spills in a carpet anymore.

    For the kitchen, ask when the slack season is for the contractors and go with that. Kitchens can be this odd pain because of construction delays.

    Other places to stick money: in a travel fund for when you do want to travel with your kids or DH. Oh, or handing out money in the street in small amounts of weird bills, like $2 bills. Someone did that in our town one Christmas — handed out $500 of $2 bills to people — and told them to spend in the community and see the influence. Or maybe just keep shoveling into an investment account and strive toward becoming part of the two comma club.

    • nicoleandmaggie Says:

      We already did that bathroom! This is the already luxurious master bath. It just has a plastic shower instead of fancy tile and gold fixtures instead of brushed nickel or whatever is in. (Pictures of the master bath are here– I’d forgotten we repaired kitten damage before leaving https://nicoleandmaggie.wordpress.com/2015/12/07/november-mortgage-update-kitten-destroyed-bathroom-during-and-after/ ).

      The kids bathroom was the one with carpet and we tore that out before we left. Somewhere I have before and after pictures. (Here: https://nicoleandmaggie.wordpress.com/2014/09/22/the-new-flooring-and-bonus-toilet/ )

      We have a rug on the dining room carpet so spills aren’t a big deal. It’s more of a cosmetic thing there too.

      • Leah Says:

        Upgrade the shower! So much easier to clean tile than a plastic insert. Re: fixtures, don’t worry about what is in, since that changes — keep if you like them and they work, or upgrade to something you do like.

      • nicoleandmaggie Says:

        I’m not actually convinced that tile is easier to clean. It’s just harder to see. (Based on our experience renting a place with tile and owning a place with plastic.) It’s purely cosmetic.

      • gasstationwithoutpumps Says:

        Tile is easy to clean, but the grout between the tiles is really hard to clean—our all-tile bathroom is difficult to maintain, particularly in the shower stall.

      • chacha1 Says:

        If tile grout is properly sealed, it stays remarkably easy to clean for a really long time. We’ve been in our apartment for 13 years, the shower was re-done before us, and the sealed grout is just spiffy. A later tile job on the shower ceiling (after fixing a leak from upstairs apartment’s shower) was not properly sealed and already looks like crap.

      • Leah Says:

        I think nice tile with well-sealed grout is easier to clean. Once the finish has worn off tile, then there’s more challenge. But the same may be true of plastic — I’ve always had plastic tubs and such in rentals where I’m sure they’re ancient and just don’t get clean.

  6. Leigh Says:

    Right now, I would probably leave a 40k windfall in savings, probably for the next year. We’ve been debating moving and I’d like to have a tiny bit more liquidity than what I do have if we were to do that. If we don’t move, then I’d probably throw it at the mortgage. We’ve been making some other changes that might help us not move (re-decorating), so I’m not sure how that will go. It would be nice to have my half of the down payment outside of condo equity and retirement accounts. That’s the hard part about paying down the mortgage – losing the liquidity in the meantime if I need it.

    Do you think you guys have too much saved in retirement accounts? If you forecast the amounts to age 60, what does that look like compared to your current spending?

    I would say to not rule out maxing out your DH’s 401(k) even with the high fees if you don’t think he’ll be there for ever: https://www.bogleheads.org/wiki/401(k)#Expensive_or_mediocre_choices Absolutely prioritize your reasonable fee ones, but if you also want to use his, I wouldn’t rule it out just because of the fees. I would just transfer it to a Rollover IRA at Vanguard as soon as you can get the money out!

    • nicoleandmaggie Says:

      Liquidity is good!

      Right now we could completely retire to DH’s home town like tomorrow (pop 3000, closest “city” 3 hrs drive). However we can’t even move to paradise on one salary. Since we don’t plan on retiring where we normally live, our current spending isn’t really relevant.

      Yeah, we should probably start on his account. Or else spending :).

  7. gasstationwithoutpumps Says:

    The solar panels are probably a good idea, if there is a good contractor in town to install them. If electricity is cheap where you live and construction expensive, then they may not be a good financial investment, but they are a good environmental investment right now.

    $500/month in a 529 plan doesn’t sound like enough, unless you’ve been doing it since they were born and are aiming only for public universities.

    • nicoleandmaggie Says:

      We have been contributing since birth and our 9 year old already has too much for a state school in state. We should easily be able to make any shortfall from income if we’re not eligible for financial aid. (Like it says in the post.)

    • Rosa Says:

      we have a new “solar garden share” option in my state, where you buy a share of a solar installation somewhere (churches have been doing them in my city – parking lots and big roofs are great sites) and it provides your electricity, with funding over time built in. But the options are so varied and tricky – in some, you keep paying even if you move away! – we haven’t done it.

    • Contingent Cassandra Says:

      Another possible eco-friendly option (also depends on local geography): geothermal heating. Makes the most sense if you need to replace heating/cooling anyway, but might still make sense as an upgrade. I know a couple of people with such systems, and they’re happy, both with the function and the energy/cost savings.

      I’d put 40K in a downpayment fund, but I’m somewhat in the same boat you are: I already own what I can easily afford (a studio apartment), and it would take a *lot* more to afford what I’d like (a house with a yard in the same area in which I already live, which is, if not my idea of Paradise, then close enough to it. And the larger the yard, the closer to paradise.)

  8. crazy grad mama Says:

    We still have debts to pay off—my husband’s student loans and our car loan—so we don’t quite have this dilemma yet. $40K would be enough to give us extra for the house down payment fund, which is sitting in an Ally savings account. (Thanks to the commenter here who suggested Ally. It’s nice to be making actual quantifiable interest on our savings!)

    • nicoleandmaggie Says:

      Man, we should have listened to that suggestion. (I’m SO LAZY.)

      Good luck with the debts and the downpayment!

      • Leigh Says:

        BF tends to keep lumps of cash around until he decides what to do with it and he’s been really happy with Ally since his lumps often end up being several tens of thousands of dollars. His paycheck deposits $X to checking (previous year’s annual spending divided by 12), $Y to Vanguard auto invested to stock index funds, and then the remainder to an Ally savings account, which is also where his taxable stock dividends go. He then collects the money every once in a while and invests it back in Vanguard usually.

      • nicoleandmaggie Says:

        I used to do that with online savings accounts back when there were more places with high interest rates. But then places would have great teaser rates and then would drop, so I got tired of chasing rates and moved the bulk of our money to the local credit union. Ally has had higher than average rates for long enough that I should probably take a chance on them, but I probably won’t get around to it. :/

        I guess it depends on what we decide to do with excess money– if we do decide to go back to what we were doing in grad school (albiet with far less money), then it would make sense to transfer to an online savings account monthly before adding lumps of money to a taxable Vanguard fund.

      • Leigh Says:

        What were you doing in grad school?

      • nicoleandmaggie Says:

        Saving excess in online savings and then sending it to etrade when enough had collected. (Much smaller sums of money back then.)

      • Debbie M Says:

        Ha, I also got sick of rate chasing. But you just inpsired me to look up Ally’s savings rate (1%). My Alliant Credit Union account is almost that high (0.96% I think), so I’m going to stick with that. I joined Alliant for their high-paying non-investment HSA, but sadly the HSA interest hasn’t kept up (0.65% I think). Finally I decided to start making all my deposits to Alliant and my withdrawals from CapitolOne360 (aka ING Direct).

  9. Nanani Says:

    If it was me I’d help my sister pay off some major purchases early. I don’t know if “charitable giving” here includes large gifts to family or if there are Reasons not to do so, but I don’t see it listed so there’s my suggestion :)

    • nicoleandmaggie Says:

      Well, my sister makes the same amount that I do and we both started working at the same time (since she didn’t go to graduate school), so she really doesn’t need my help. My parents don’t know how to spend money. DH’s parents basically buy all the clothing and toys for all 6 of their grandkids. DH’s siblings seem to think that they have to spend on us whatever we spend on them, but they can’t afford to do that. We were going to pay for college for one of DH’s relative’s kids, but the two oldest had teen pregnancies and dropped out after a year of community college so the relative has kind of given up on his remaining 4 kids so there’s no 529 there to send money to (the second kid still has 1K in hers, but with two toddlers isn’t likely to use it any time soon). And, of course, that family is really bad with money so if we do send money (for example, because they’ve had an emergency), instead of doing debt repayment with it, they tend to buy luxuries that we don’t feel we can afford for ourselves.

      So no, no large gifts to family.

      That’s nice of you to help your sister!

  10. Linda Says:

    I considered a backdoor Roth, but I was too lazy to figure it out. Now I’m using the money I would have put in it for a house down payment, so I’m glad I didn’t do it after all. If I had an extra $40k right now, I’d use it for house stuff. I’d probably split it between a heftier down payment and improvements such as drought tolerant landscaping or a small addition.

    If I had a true windfall of that amount then I may also be tempted to spend it on a big travel splurge. In the past I’ve been tempted by intimate cruises that travel down the west African coast. Or perhaps exploring the Indian Ocean, Malaysia, and Indonesia on a small ship may be nice, too. I’ve had a desire to visit Sri Lanka for several years now.

    • nicoleandmaggie Says:

      That’s the thing, if we ever do move to Paradise, we’d need more than the proceeds from the sale of our house to put 20% down on anything in a decent school district.

      Do you think it matters if the money is a true windfall vs. money you saved for a purpose but ended up not spending?

      • chacha1 Says:

        I think it does. Having a big chunk of money “left over” that you saved up in advance for an important personal goal is like paying yourself back for planning ahead and for being thrifty while you did the important personal goal. A windfall, aka money falling from the sky, is something you have no frame of reference for. I would be much more likely to spend the money “left over” and save the windfall.

        So in this case, I would take that $40K and put it in a New Car Fund, because no car lasts forever and it sure would be nice to be able to pay cash for a replacement.

      • nicoleandmaggie Says:

        The most expensive car we’ve ever bought (Honda Civic Hybrid) retails (for new models) in the 25K range, so hopefully all 40K wouldn’t go for that! We’ll see how my car is doing after a year in storage, given it was cranky before going into storage. (MSRP ~$2K if I hadn’t banged it into the garage on my way out…) That money may have to go for a car sooner rather than later, but we’ll see. I so do not want to go car shopping.

      • Linda Says:

        I guess I’m taking the idea of a windfall of money you don’t “need” too literally, perhaps. If there is no “need” for the money, I would have some fun with it. I’d do that even if it was money saved instead of money that fell into my lap for whatever reason. In fact, I actually did do that once many years ago. Now you’ve given me an idea for a blog post.

      • nicoleandmaggie Says:

        Yay windy city gal blog posts!

  11. Sarabeth Says:

    If you don’t have other (deductible) t-IRAs, then a backdoor Roth is actually not complicated at all. Just stick money in a non-deductible t-IRA, wait an appropriate amount of time (we are waiting a year, which is super-conservative), then, roll the t-IRA over to a Roth.

    If you already have a deductible t-IRA, you might be able to roll it over to your 403(b) or 401(k) first. I just did this, so that we can do the backdoor Roth for this year. Obviously, rolling it into your husband’s 401(k) has the same set of problems that directly investing money in it would, and even the 403(b) might give you pause if one of your goals is to keep your money more accessible.

    • nicoleandmaggie Says:

      Interesting!

      I did roll over all of our traditional roths to an IRA back ~6 years ago when the rollovers were first allowed. But we were also lucky then because the stock market had tanked and we actually got a tax benefit with the rollover rather than having to pay taxes. Dealing with taxes is so unpleasant. (It is also why we have one share of various stocks that used to be AOL. Can’t deal with the complication of selling. Though I guess nowadays companies are required to keep initial cost-basis information.)

      I am thinking that we should probably keep more money accessible. Not entirely sure, but we’re totally on track for a lovely retirement. Not so much on track for moving to paradise permanently without a job for me lined up. More than on track for living a hedonist lifestyle in the small town we’re currently living.

      So… I dunno.

      • Leigh Says:

        Also: if one of you has Traditional IRAs, but the other doesn’t, you can do Backdoor Roth IRA just for the one who doesn’t.

  12. nicoleandmaggie Says:

    I would spend on remodeling the house inside first (carpet ->hardwood; kitchen redo) then check on solar panels. Will the company let you sell back into the grid? What will it do to your equity? Can you take advantage of gov’t incentives? It seems like a waste to not use solar panels when it’s hot & sunny and you have to spend $$ on a/c.

    But of course, I like staying inside my house, so that’s top priority for me. With that much money I might also travel. Maybe help my mom with some expenses. I dunno.

  13. Rosa Says:

    Have you ever been to a financial planner? We keep saying we are going to (mostly when we’ve hit an impasse about what to do with a chunk of savings) but we never have.

    • nicoleandmaggie Says:

      Nope. I’m not sure that a financial planner could give us any better advice than what I can do myself. We’re not at the point where a tax accountant would be worth a lot either. And, tbh, I don’t mind overpaying taxes rather than seeking sketchy tax loopholes (at the moment anyway).

      In this case it is more of a preference thing, and a financial planner can’t help with that, or with laziness. A good planner would say we’re on track and give us permission to spend it, but would also suggest the retirement savings options above. A bad planner would try to sell us whole life insurance.

      • Rosa Says:

        haha. The tax accountants at my volunteer gig are so appalled to learn we do all our taxes ourselves. BY HAND even (well, by translating the 1040 & other forms into Excel. Not actually by hand. Any more.) But yeah, I’m interested in not breaking tax rules but not super interested in minimizing our taxes. We get enough tax breaks just by being who we are (married, homeowners, high income, highish state and local taxes).

        It seems like a really good planner would have some ideas the rest of us don’t think of. But there’s also nothing wrong with stuffing all the extra cash in a non-tax-advantaged investment account, on the assumption that if you don’t have a plan for it this minute you probably won’t need it in the next year or two.

        I didn’t think I had any suggestions but I guess that is my suggestion, because it’s what I do: any not-otherwise-allocated money goes into the Vanguard non-retirement account. To sit there making money until we do have a plan.

      • nicoleandmaggie Says:

        That’s what I’m leaning towards depending on how my car behaves when we get back.

      • Rosa Says:

        in my imagination, the financial planner agrees that there are solid rational reasons behind all my preferences and solves all these pesky marital disagreements.

        But, oh yes, the car. Cars are really good at taking up any slack in your budget.

  14. First Gen American Says:

    Some should definitely go to house maintenance/repairs.

    Now that you are in this financial situation (and I was there for a few years a while ago), you can really start dreaming and planning big….Like what it would take to move to paradise full time? $100,000K more, etc. Also, that might affect the kinds of changes you to do your house. A budget kitchen remodel might be better if you’re going to fly the coop in a year or two.

    • nicoleandmaggie Says:

      Yeah, I have been thinking those thoughts. But I really would need some kind of compelling job, and I’m just not sure that is in the cards.

      Based on glassdoor estimates, it looks like DH is worth about 140K right now in Paradise, which isn’t really enough to live where and how we’d want to live and pay taxes etc. I wouldn’t need to make that much to make up the deficit, but I still have the problem that I really do like my regular job. There really just aren’t careers for me in Paradise. And right now my professional life is more important to me than other things. That may change if this job becomes less compelling.

      • Leah Says:

        Good reason to spend in your home in ways that work for resale too AND to keep saving up all that excess money. Could you conceivably get to a point of having saved up enough to make it reasonable to move to Paradise? Maybe once DC1 or DC2 go to college?

      • nicoleandmaggie Says:

        That would depend entirely on housing prices in paradise. DH also may no longer be as attractive as an employee by then so we would need even more saved.

        And we could move now. I would just have to leave my career.

      • First Gen American Says:

        I found that saving without a purpose was a lot less fun than saving for a specific goal. That car is getting old too. Replacing that and paying off the mortgage is almost like prepaying your big expenses for the next few years ahead of time. if you continue to have extra cash rolling in, then it can be used on the nice to have stuff. I was always a fan of keeping those fixed expenses as low as possible for the unexpected job losses etc.

  15. Funny about Money Says:

    When I was in that happy position, I used it to pay off the mortgage on my house. This gave my investment advisor a fit of apoplexy. However…come the Bush recession, I was mighty glad I’d done it — if I’d had to make mortgage payments after the university shut down my department and laid us all off, I would have lost the house.

    A paid-for roof over your head is worth more than meets the eye.

  16. Revanche @ A Gai Shan Life Says:

    Looks like you’d do what I did – look over all the tax advantaged investing and perhaps some for the kidlings. If everything was maxed out and paid down, I think home renovations would be the next thing and then saving for life in Paradise in case that’s what we wanted down the line. Or just the saving if I wasn’t 100% sure about the renovations yet.

    • nicoleandmaggie Says:

      I wonder if we’ll ever be sure about anything. Meanwhile money just sits making next to nothing in interest…

      • First Gen American Says:

        Don’t worry about the lack of interest. A year or two of it doing nothing isn’t going to be the end of the world. Better to make a thoughtful decision than rush to put your money to work. There will come a time when it’s obvious it’s time for that new car, but if you can get another year out of it before pulling the trigger then why not do that?

      • nicoleandmaggie Says:

        We should know about the car probably a month after we get back.

  17. undine Says:

    House upgrades since everything is wearing out: wood floors (more like 8-10K for us), bathrooms, etc.

  18. Debbie M Says:

    It sounds like you’re not super excited about any of your spending options right now. And your retirement and college savings accounts are hardly anemic. So I’d leave it accessible in taxable accounts for now. Various renovation projects may get more exciting and/or cheaper/quicker later. Or another idea might come your way.

    Other ideas that have come up for me lately:
    * various medical issues
    * study-abroad opportunity
    * travel-with-friends opportunity the very same year

    You could also be presented with travel plans because of things like weddings, births, or funerals. And who knows, maybe you will find job opportunities in a semi-paradise or non-hell-hole.

    • nicoleandmaggie Says:

      Spending takes so much tiiiiiiime (FWP!)

      I’d like all the things on the list, but I’d really have my [sadly nonexistent] personal assistant just take care of them all.

      Except for my sister, we’re hopefully done with weddings for the foreseeable future. (And she currently doesn’t have a boyfriend, so…) Births we would travel to are *hopefully* more than a decade off. And anybody we would (Heaven forbid) travel to a funeral for is in the midwest or closer, so not that expensive. We do enough travel for work that we usually have a r/t flight with miles if we need one (usually we use our miles to fly a grandma out).

      I don’t know that where I am now is a hell-hole. But it is also definitely not paradise.

      You’re definitely right that sometimes we are really happy that we didn’t spend money, so it makes sense to put money away and not look for places to spend it if we don’t need/really want to.

  19. If I had a windfall… – Windycitygal Says:

    […] The last two weeks there have been some particularly resonant posts. In one, readers were asked what they would do with a windfall, and in the other they were asked whether their parents struggled financially when they were […]

  20. September Mortgage Update: And what did we do with the leftover money? | Grumpy Rumblings (of the formerly untenured) Says:

    […] pay off the mortgage this month just so I could put off some of the decision of what to do with our unspent leftover money from paradise.  That would only save $52.43 and only account for $6,296.99 and, to be honest, I’m not yet […]


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