One last big money move of the year. I was going to say decade, but I decided to take a little pressure off you.
Pressure off me? It’s your money, Penny. I know that’s what you’re thinking. It is my money, and ultimately, it’s my decision.
But like most things
in life on this blog, the best ideas come in the comments.
So, what I’m going to do is run you through a few possibilities, tell you which way I’m leaning, and then I’ll ask you to go work your magic in the comments like always. Sound good? OK. Let’s go make a big money move.
How Much Money Are We Moving?
We have far too much money in an emergency fund. But now that we have a son, it never feels like enough. Still, I know that rationally we can take some of that money and use it more strategically.
RELATED POST: Why I Prefer Extra Income to Emergency Funds
That means that we’re looking to shave about $6,000 off our emergency fund and put it to work somewhere else. (Please pause your scrolling while I run around sprinkling holy water on our windows, siding, doors, major appliances, and cars.)
It’s worth noting that we are confident enough to make this money move for a few reasons. My husband and I both have contracted jobs, which means that even if our positions are dissolved for next school year, we are employed through June and paid through August. Additionally, even if we do move that $6,000, we still have enough money to live on…for 2-3 years. Assuming we don’t need new windows and siding. Because apparently one year of my life is worth the same as those projects.
So $6,000 is the number. Now where do we put it?
Yes, I Still Hate Our Mortgage
If you’ve been following my blog for a while, you know that I absolutely hate my mortgage. The only good debt is no debt. Yes, I understand how wealthy people leverage money and loans. Yes, I know that the stock market returns outperform our mortgage interest rates.
And yet, I simply don’t care.
My mortgage feels yucky. It’s a commitment that I knew I was making of course. After all, I did sign my name approximately 87,564 times. But the wild thing is that even though I had enough financial acumen (and a healthy dose of luck and privilege) to buy a house on my own at 26, I didn’t actually know a mortgage was debt.
So maybe I’m just bitter. Whatever the reason, the possibility of being able to put one more serious dent in our mortgage before the end of the decade is mighty appealing.
Set It Aside for Our 2020 Roths
We could also put the money aside for our Roths. There are a lot of reasons why we love these accounts and work so hard to max them out. Compared to our 403bs, we enjoy total control of where our money goes (Hey, Vanguard, heyyyy!). We also love that we can withdraw our contributions if there’s a serious need.
Something else that we love is the fact that due to our salary schedule as teachers, we will make considerably more closer to retirement (and in retirement, if this pension thing holds!) than we did when we started investing in our Roths. Lots of people talk about how you can’t know how much money you’ll make in retirement compared to now. Thanks to a unique aspect of our profession, we mostly can.
So I love my Roth IRA as much as I hate my mortgage. That means that it’s also probably logical to set the money aside and make two (one for me, one for Mr. P) sizable contributions once the calendar resets.
Whether we do this or not, we will prioritize maxing out our Roths before we make additional mortgage payments in our regular 2020 budget.
No, I’m not going to use this to buy more shoes. Or any sort of splurge or travel. We have sinking funds and side hustles to cover those wants.
No, we can’t put this in our 403bs. But we can increase those contributions more in 2020 so there isn’t extra money sitting in savings at the end of next year.
Yes, I could beef up our charitable contribution. But I don’t want to make a huge one-time donation and then feel bad about my giving practices when they never live up to that again. Instead, we are working to incrementally up our giving every six months. (We’ve already more than doubled our charitable giving each month since I started blogging! You are a good influence, pals!)
Maybe we could put some or all of this in our taxable account. But I would be lying if that didn’t feel a little like putting it all on red. I’m not sure why I’m so leery of our taxable account (its had a great year!). But I’m really only comfortable tossing in $50 here, $100 there.
What Should My One Last Big Money Move of the Year Be?
So you don’t fret over the state of my marriage, please know that I do talk about all of our money decisions with Mr. P.
Then, I crowd source them online.
It’s not that I don’t trust my husband. In fact, for someone who would rather put a hot poker in his eye than talk about money (That’s, uh, kind of a direct quote from when I asked him if he wanted a FinCon pass), he’s actually very money savvy. The problem is he answered this question the same way he answers me when I ask him how we should spend date night. “What would you like to do?”
Since neither of us can make a decision and the clock is ticking, the blog seemed like a great place to pose this question.
So Tell Me…Where should we put our money?