No. of Recommendations: 0
For the last 3.5 years I have been a stay at home mom and my husband's salary has been supporting the family. On his salary alone we are able to meet all of our expenses, save a little for retirement, and put $500 away into savings/e-fund. I am not in a position of having some freelance work. It won't necessarily be consistent, and I don't know how much money I'll make. But I am able to do it at home so I will not incur any childcare expenses or other expenses to do my job. (Except maybe needing a better laptop, but that's a one time expenditure I will only make if it looks like I'll be getting a lot of work.) So I'm trying to decide what to do with the money, and I know there are some very wise people on here.

Here's our basic financial situation. We have a mortgage with a fixed rate of 5%. We have student loans. Some fixed at 2.5%, some at 3%, and some variable but right now are at about 2.5%. We have no consumer debt. We have about 2 months of living expenses readily available, and about 6 more months worth in investments. DH and I both drive reliable but aging cars, and while we plan to drive them until they die, that could be next year or ten years from now. We have not put enough away for retirement, so I know that needs to be addressed.

Here's what I'm thinking. All of our debt is at really low interest rates and most of the interest is tax deductible, so I don't think it makes sense to aggressively pay down our debt right now. I think we should put all of the money into easily accessible savings until we have enough to replace at least one of our cars. Once that is accomplished I will max out our IRA's and put anything left into easily accessible savings until we have enough to replace both cars. If, in the meantime, the variable rate student loans creep up I will reconsider diverting extra money to pay those down.

So, what do you think? Good plan? Am I missing something?


Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.