NTR: If your only debt is a mortgage...

radiokate · November 2009

What do you do with your extra money each month? Do you use it to pay down your mortgage? Just keep it all in savings month after month? Put it in a seperate account for your LO? A money market account or CD or something? What do you think it the smartest thing to do with it?

Smashly1 · November 2009

We put it toward our retirement. Sometimes a little extra towards are mortgage.

radiokate · November 2009

Smashly1:
We put it toward our retirement. Sometimes a little extra towards are mortgage.

If we already max our 401K, should we start up another kind of IRA or something?

Carifly · November 2009

Right now we just put it all in an ING savings account. We have three- one for an emergency fund, one for fun, and one for DD. Right now we split and approx 60% goes to e-fund, 30% to fun, and 10% to DD. Once we've replenished our e-fund with 6 months expenses we'll increase the contributions to the other accounts. And we're going to open up a 529 plan for DD but haven't gotten around to that yet.

Whatever you think you might need access to in an emergency is best in a savings account I think- for long term savings CDs or investments make sense. But we get a good enough rate on the ING account that I've got around to doing a CD, and we don't have enough saved that I'm ready to think about an investment account.

ETA- we don't plan on staying in our house forever, so we're not paying extra on the mortgage. But if we did, I'd definitely be putting extra $ to the principal each month.

secuccaro · November 2009

We have 2 mortgages and DH has some student loans. We don't have a ton leftover at the end of the year, but we do this --

I keep most of my extra money is a savings account - and I draw from that for special occasions, vacations, gifts, home repair, etc. DH has extra money in savings and in an Ameritrade account and also makes large contributions to his 401K each month. We also both contribute monthly to DS's 529 account.

secuccaro · November 2009

radiokate:

Smashly1:
We put it toward our retirement. Sometimes a little extra towards are mortgage.

If we already max our 401K, should we start up another kind of IRA or something?

yes, you can open a Roth IRA.

before you do that though, do you have a good amount of savings to cover you in an emergency (lay-offs, medical expenses, car repairs)?

emas · November 2009

We max out our retirement contributions and also contribute a good deal towards our kids' 529 funds. "Extra" may go towards a large purchase, but more likely it is put into additional savings.

6fsn · November 2009

We have a bunch of different savings and investments we funnel money into.

Examples: Roth IRAs, college money, house repair/remodel money, future car purchases, college money, investments. We also have some smaller accounts for vacations and gifts.

Depending on when we'll need the money (6 months, 6 years, 30 years) deterrmines where the money is stored.

anna7602 · November 2009

Our cost of living in NY is pretty high, but we budget a pretty strict amount to go into our retirement savings every month (stocks, 401K, bonds, etc.) and into our general savings. I work freelance, so there are times when I am not getting a lot of work and basically need to live off of my savings until the next job comes along.

radiokate · November 2009

secuccaro:
radiokate:

Smashly1:
We put it toward our retirement. Sometimes a little extra towards are mortgage.

If we already max our 401K, should we start up another kind of IRA or something?

yes, you can open a Roth IRA.

before you do that though, do you have a good amount of savings to cover you in an emergency (lay-offs, medical expenses, car repairs)?

Yes, we have an emergency fund ready to go, and DD's 529 has more than enough considering she has YEARS until college (although DH is paranoid about constantly building that for some reason!) so I just don't know what to do with the rest. We don't necessarily plan on being in this house for long either, so I don't know how much of a rush we're in to pay that down. I just don't know what the smartest thing to do would be.

n&bcarlson · November 2009

We're not quite there, but hope to be next year. Unless you have a mortgage with a high interest rate, paying down your mortgage isn't really the best use of the money. You'll make more through investing than you will save on interest by paying early. Your best bet is probably going to be to try to max your 401k and/or IRA contributions, then make sure you have money going into a college fund, life insurance, mutual funds, a money market, etc. Talk to a financial planner. If you have "extra" money, a good financial planner will be happy to tell you what to do with it so it is working for you and your goals.

anna7602 · November 2009

Also, our mortgage rate is so low (well below 5%) that it would never make sense to pay our mortgage off earlier. We get a higher return than that from some of our investments, even in today's economy.

radiokate · November 2009

BTW, disclaimer: I don't mean to say that we have tons of money, that's not what I'm getting at, we just budget really well and live tight so that we can save and be smart with our money and hopefully have a lot LATER, when we might actually do something with it.

C.squared · November 2009

We max out our 401(k)'s and split the rest between a few different accounts: a 529 for DD, another investment account for retirement, regular savings account (used for an emergency fund), a vacation/fun savings account, and a "gift" savings account. We take a certain percentage of each of our checks and put it towards each of these accounts. Perhaps not the best way to handle things, but it works really well for us and ensures that the money goes to savings and doesn't get spent outright. I only pay enough extra on the mortgage to get the payment to a round number.

Kilts_Kimonos · November 2009

Emergency fund

Retirement

If you need to have access to the cash do a Money market fund. If you forsee a stretch of time that you will NOT need to touch that cash get a CD, they pay better.

I don't believe in accounts for LO in their name because it can negatively affect their chance of getting financial aid for schooling.

katydid2007 · November 2009

We invest aggressively in stocks and mutual funds. Yields on money markets are garbage right now so I would not recommend them.

secuccaro · November 2009

Sounds like you guys are doing really well!

A lot of this depends on your personality and how you like to keep your money. I am personally anti-stocks and I like to have more money in savings, CDs. DH likes having his Ameritrade account and watching his stocks go up and down.

megs042107 · November 2009

DH has money automatically withdrawn from his paycheck to go towards his 401k, employee stock purchase program, etc. Over the past several years, we've put anything extra into an ING account so that we would be able to buy a bigger house... which we're closing on at the end of the month.

Once we move in, we'll put extra money into the same ING account since it's smart to always have an emergency cash fund. We'll put some into savings accounts for our children and a bit into investments that we already have going.

megs042107 · November 2009

radiokate:
secuccaro:
radiokate:

Smashly1:
We put it toward our retirement. Sometimes a little extra towards are mortgage.
If we already max our 401K, should we start up another kind of IRA or something?
yes, you can open a Roth IRA.
before you do that though, do you have a good amount of savings to cover you in an emergency (lay-offs, medical expenses, car repairs)?
Yes, we have an emergency fund ready to go, and DD's 529 has more than enough considering she has YEARS until college (although DH is paranoid about constantly building that for some reason!) so I just don't know what to do with the rest. We don't necessarily plan on being in this house for long either, so I don't know how much of a rush we're in to pay that down. I just don't know what the smartest thing to do would be.

Have you thought about investing in a few money markets? It might be good to build a fairly diversified portfolio with extra money... especially if you don't foresee using any of it in the near future and wish to use it for retirement.

I would advise speaking with a financial planner to fully understand all of the tax implications between Roth IRAs, money markets, etc.

Seems like you guys are doing really well though!

DG1 · November 2009

retirement, some extra toward the mortgage, some toward savings for larger home improvement projects (e.g., the deck we put on this year), we pre-save for cars so we can pay cash for them instead of getting a loan, stuff like that.

If I had more reliable income, I'd put some aside in the college funds every month, but as it is, we are just making contributions for birthdays and Xmas at the moment.

jerseygirl81 · November 2009

We put extra on our mortgage and max out my 401(k). The rest goes into stock accounts and savings.

Erin&Ryan · November 2009

We have a Roth IRA that we dump money in to at the end of the year once we figure out how much extra we have.

Shell24 · November 2009

We have many different accouts. We each have a Roth IRA and an additional investment account. On top of that we have a money market account (our savings for a new down payment) and our DD's 529.

We keep very little in our checking/savings...normally about $2500 in checking and a bit less than 5k in savings. We know we can access the money market (and honestly, the additional investment accounts too) quickly if we needed to, so we consider them our "emergency fund" as well as retirement savings.

My DH and I don't operate on a budget like some of the ladies I've seen here and on MM. We don't need to budget every dollar and that works for us. Our savings are automatically withdrawn every month so that goes first. We then know on what date they're withdrawn and how much all our other bills are (mortgage, electric, gas, credit card). We definitely eat out, buy clothes and toys, groceries, and household items, and consistently transfer money from checking to savings at the end of the month.

We opted not to go with a CD, because we didn't want to have to wait for the renewal and possibly face a penalty for withdrawal if we sold our condo and needed the money for the downpayment...which is why we went with a money market, but in your case, just compare the returns and rates.

exhausted_bride · November 2009

We probably spend more than we should but we are concentrating building up our savings account. I guess the very responsible thing to do would be to put more towards the principal on the house, but I feel better having a larger savings than anything else.

fIowerchild · November 2009

Extra goes into a money market account, employee stock purchase plan, my son's 529 and a regular old savings account.

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