Told DH the news

March 2nd, 2007 at 11:04 am

This morning I told my husband that both CC's were paid off, and all we have left is the truck and mortgage. (He makes the majority of the money, and I manage it. It's been like this for over 14 years, and works for us) Big Grin
He got excited, saying he wanted to pay the truck off asap so we can increase the mortgage principle payment.
My question is....once the truck is paid off, shouldn't we have a 2 to 3 month EF before working on the mortgage?
What does everyone think?

Posted in Uncategorized | 15 Comments »

15 Responses to “Told DH the news”

JanH Says:
March 2nd, 2007 at 11:08 am

I think you are right. I would think a small emergency fund would be a good thing to have. You could breathe easier and then those extra mortgage payments would be even more fun to make!
honeichild Says:
March 2nd, 2007 at 11:21 am

Congrats on the payoffs!
fairy74 Says:
March 2nd, 2007 at 11:28 am

kudos, you're doing great! I agree with Jan H ge the EF pumped up a little, you need some liquid funds in case anything unforseen happens (which of course it will)....keep up with the good focus on getting things paid off!
rduell Says:
March 2nd, 2007 at 11:55 am

I agree. I'd do an EF first and then focus on the mortgage.

Congratulations!!!
princessperky Says:
March 2nd, 2007 at 12:20 pm

congrats on the payoff, and I would split the difference. some to house, or truck, some to EF...
carol Says:
March 2nd, 2007 at 01:02 pm

I vote with the others. EF first then mortgage.
Ima saver Says:
March 2nd, 2007 at 01:32 pm

Emergency fund always comes first!!
creditcardfree Says:
March 2nd, 2007 at 01:34 pm

I agree with you and eveyone else that has posted. I think maybe you start with at least three months of expenses. Once that is done, reevaluate and decide whether to pursue a larger EF or start prepaying the mortgage.
Aleta Says:
March 2nd, 2007 at 03:49 pm

They say debt is number 1 to get rid of. I agree with the Emergency Fund. Are you contributing to a retirement fund? Oh, by the way, a big big congratulations.
jIM_Ohio Says:
March 2nd, 2007 at 04:41 pm

I would fund EF and retirement before paying down mortgage. Several reasons...

if the mortgage is around 5-15 years old, the pay down does not work nearly as well as if it was in first 10 years.

For example, paying down my mortgage at 210 th month (17th year) will shorten from 360 months to 311 months (that's only knocking 4 years off). Same money would do better in EF or retirement fund.
littlemama Says:
March 2nd, 2007 at 05:50 pm

Thanks for all the advice and encouragement.
We do have retirement, but DH's employer does not match.
Refinanced mortgage almost 4 yrs. ago/ 30 yrs. (hope to shorten it).
jIM_Ohio Says:
March 2nd, 2007 at 06:25 pm

if mortgage is 4yo, pay it down. the sooner the better... compounding works in reverse, so early extra payments (within first 10 years) are worth much more than later extra payments.

small EF, then accelerate mortgage.
YOUCANDOIT Says:
March 2nd, 2007 at 06:45 pm

Wouldn't it depend on what the interest rate is on the mortgage. I think I would fund retirement before prepaying the mortgage. But, it also depends on the interest rate.
Great job on getting rid of the bad debt!!!!
YOUCANDOIT
littlemama Says:
March 2nd, 2007 at 06:56 pm

Mortgage intrest is 5.85%. Thanks everyone.
Aleta Says:
March 3rd, 2007 at 07:44 am

I would definitely try to max out the retirement plan even if the employer doesn't match. The younger you are the better the compounding works. You can always use your bonuses, or any extra money to pay on your mortgage. Something that my husband did when we were paying off our mortgage is that we paid a couple of payments ahead. This can work out like an emergency fund as well as you'll never be late and if some unexpected thing happens - you're paid up for a couple of months. We also paid extra on our mortgage. My husband has irregular income so this worked out for us.

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Told DH the news

15 Responses to “Told DH the news”

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