Just wanted to say I am so excited about something.
Dh and are tweaking our budget and pay (self-employed) and attacking the house payment and non-retirement investments. We already have a FFEF of about 6 months household expenses and our only debt is the house. Our business also has a reserve. All our business and personal expenses are kept totally separate.
We are already maxing out our IRAs each year so that will stay the same.
We are at a point that we can invest on a monthly basis in non-retirement mutual funds so that is starting in November. Our non-retirement investing will be about 8% of our take home pay. Our investment guy totally understands about being debt free and investing. According to him we are a little on the aggressive side for our age but not so risky he is walking away from us. We have spread the investing across 12 different mutual funds and it will come out in an automatic draft. Once we get the house paid off we will increase our investment percentage.
One thing that is a big hindrance to investing more is our health insurance premiums. Our health insurance premium is over 11.5% of our take home pay & this is with a very high premium. Since we are self-employed we must buy our own health insurance. If your employer pays even a small amount of your health insurance, thank him or her for that. It is outrageous to buy on your own. Oh, and if you want to switch places, I’ll trade for what you’re paying in a New York minute! LOL However at least we are blessed to have insurance and will not give it up! Okay, looking back over this I realize that the health insurance is not really a hindrance but really does allow us to plan. We know how much we are responsible for (deductibles & premiums) and that the insurance will pick up the rest, in general—according to the contract. Occasionally there is a minor thing it won’t cover but it is not often.
We were already paying an extra $100/month toward the mortgage principle. Now, instead, we are going to add to that and pay a total of $500/month extra. If murphy should hit we can discontinue the extra toward the mortgage without fear of getting behind. That would allow us to have an emergency fund for the emergency fund so to speak, as DR has mentioned. One thing I want to do is ask the bank how quickly we can pay off the house by paying an extra $500/month. That way we can see an end to the debt.