jbraly[at]gmail.com wrote:
- quote -

Heck don't feel foolish about that, it's a hobby, nothing wrong with
that. At least you have an excuse, some people are paycheck to paycheck
because of their cars and it's just from not thinking it through.

One thing is that you're talking about you transportation car not you
weekend project car, and the more you put into the minivan the less
likely it is you can get the, well, anti-minivan.

But I'm a closet car-guy too so I hear you on this. I definitely won't
buy the cheapest way to get from point A to B but the way I look at it
is getting the cheapest enjoyable car possible. Think of cents per mile
and the differences are huge, comparing say the buy-new-3-yrs cycle to
buying a three-year-old car coming off lease and keeping it till the
wheels fall off. Over say ten years you'd easily spit off enough cash to
buy a truly fun project car (which I'll take ANY day over being in a new
family car every three years). So that's the way I see it, I'll take an
overpowered VW or Subu plus a LOT of stuff & vacations & extra cash for
who knows what, instead of an M5. At least for now...

- quote -

You could split the baby, and do both, and see how it goes - add some to
your house payment while adding some to savings? People are different,
some people like looking at a fat savings/investment account, some
people like looking at a small or gone mortgage.

-Tad

noreplysoccer[at]hotmail.com wrote:
- quote -

I said in the intro to the list that it was for surplus income *after*
basic retirement savings. The list is for what to do with money after
you contribute 10-20% of your income to a 401/IRA etc.

And anyways, paying off the mortgage is retirement savings, since you
will need somewhere to live when you retire, and reducing your interest
expense frees up more money for retirement savings.

Andy

jbraly[at]gmail.com wrote:
- quote -

Like SD said, its 6 months expenses, not income. The idea is that if
your family falls on very hard times you won't be subject to gouging by
lenders who charge high rates for people in financial distress. Its
also good for true emergency expenditures (and I don't mean remodeling
the kitchen!).

Andy

"Here is my personal priority list for how to use "surplus" income
after
basic retirement savings:


1. Pay off high interest debt (not a problem for you);
2. Pay off non-mortgage debt like car loans;
3. Save up a 6 month emergency fund which is kept in a risk free
investment, like CDs.
4. Pay off the home mortgage.
5. Save up for kids education.
6. Save up for early retirement, or nice cars, exotic vacations, or
whatever seems like fun."

I would comment that saving for retirement should be done before kids
education ot paying off a mortgage. You have saving for early
retirement #6, but not savin for regular retirement anywhere...

Kids can finance their own education, my theory on this is I will pay
for a portion of my kids education AFTER they finish/ complete the
education. Retirement is a larger priority, IMO.

jbraly[at]gmail.com wrote:

- quote -

You need to save 6 months worth of expenses, not income. So 3 months of
income might do it.

One quick question...

My idea of an emergency fund was either a couple of thousand in a
savings account (which we have) or 3 months income.

when you guys say a 6 month emergency fund, is it assuming both husband
and wife lose their job? Or just one spouse?

thanks
Jazz Mann

wow, more thanks guys...

I feel kind of foolish now when I see it written out, but yeah, I guess
I was putting too much worth in cars, and to be honest, Ive only talked
about this with my wife, so talking about it with other folks helps out
and lets me see it all in writting.

But what can I say, my dad and I take his 1957 chevy belaire to car
shows, I used to owen a corvette, dad used to race a corvair... we are
a 'car' family. Guess ill haffta break that mold (till I am older).

We are young, but we are already working on returment, I have a little
over 10 grand in a roth IRA, and am investing moderately. Wife has a
401k at her work. So for that I am thankful. I cant wait to retire!

Due to all of yalls advice, I have narrowed my plan to the following:

1) continue to pay the $1,000 a month house payment, while still
putting another $1,000 to the "imaginary car" or rather the "imaginary
baby" fund... So when/if baby comes, we have 1/2 of my wifes annual
income (TAX FREE INCOME... kind of) sitting right there in front of us
at our disposal!

or

2) double my house payment ... pay $2,000 towards the home each month
(or maybe 1500 to the home, 500 to future baby/car repairs-replacement
fund) until baby comes! Then after baby gets here, knock it all back
down to its normal payment.

Lcukily, my thinking is all worse case... my wife no doubt will work
after the first year or sell some of the clothes she makes, so a little
more income will come in besides mine.

Thanks again fellows!
Jazz Mann

- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding.

jbraly[at]gmail.com wrote:
- quote -

Other posters made some good points on your question. Here are my 2
cents:

Its costs a lot more to keep yourself in fairly new cars all your life,
as compared to keeping yourself in fairly old cars. As Tad pointed
out, you can apply the savings to all kinds of other worthwhile things,
like saving for college etc.

Here is my personal priority list for how to use "surplus" income after
basic retirement savings:

1. Pay off high interest debt (not a problem for you);
2. Pay off non-mortgage debt like car loans;
3. Save up a 6 month emergency fund which is kept in a risk free
investment, like CDs.
4. Pay off the home mortgage.
5. Save up for kids education.
6. Save up for early retirement, or nice cars, exotic vacations, or
whatever seems like fun.

One theory behind this list is to minimize your total lifetime spending
on interest, which, in the long run, frees up more money to spend on
other things. The other theory behind this is to make your family
increasingly financially robust so that it becomes harder and harder
for a setback like unemployment or disability to send you into
bankruptcy/foreclosure.

My wife and I are 43 and 38, and we are now working on items 5 and 6,
having finished off items 1-4. I personally really like having the
mortgage paid off: We put lots of money in savings every month because
we don't have a mortgage payment; our bottom-line living expenses are
very low in the event our income drops; and our retirement savings
don't have to cover housing expenses.

Andy

JM -

If your wife is only going to be out of work for a year or so, don't
get stressed too much about your house payment. Provided you guys have
planned and saved, you could live from an emergency fund (in addition
to your income) until she returns to work. I'd consider that a
scheduled emergency. My wife and I are both 30 and she has been a SAHM
since our 4 1/2 year old was born. With our last one that was born, we
saved medical expenses in advance because we knew it was coming. Makes
it a lot less stressful that way as the money is there when you need
it.

Ditto what Tad said about putting a lot of your income into cars (even
if you pay cash). I have always heard that Warren Buffet drives an
older car and look at him now! Get other things in order (retirement,
college for kids, big emergency fund, etc.) before getting those
expensive wants.

jbraly[at]gmail.com wrote:
- quote -

JM-
I don't think anyone's asked yet - why are you putting so much of your
income into cars? It sounds like you're shooting for three relatively
new cars within about 5 years. That's a lot of money - actually it
sounds like it's most of your disposable income, factoring in insurance
& all that. Is it really worth that much to you? One car translates into
a lot of other stuff, whether it's college savings, retirement savings,
vacations, or, well, other stuff.

RE: paid-off home...I guess I'd say, what then? I work with clients who
are sitting on a bunch of home equity and have trouble...well, buying a
new car, because it's just locked up in the home. Bad example. But the
point is, you might want to stretch out the payment of your home over
many years so you can divert cash along the way to other things -
whether it's saving of some kind or simply other spending. Once you own
your home outright you might end up looking for ways to borrow back the
money.

-Tad

wow, thanks for that great advice Herlihyboy.
Yes, stay at home I would love, but my wife is a woman who LOVES to
stay busy ( i guess with a child she would). I would assume she will
stay at home for AT LEAST the first year (I am not tossing an infant to
a stranger) then she will go back to work.

That comment you made about "see if my house is too much for our new
income" scared me, but you may be right.

So, you dont think it would be crazy to attack the house for 2 years,
then maybe refinance? No, that would defeat the purpose of paying the
house off sooner...

Is it crazy for me, a 28 year old, to already be thinking about paying
off the house? it is such an exciting prospect. I wish I had attacked
it sooner. If we were not going to have kids for 5 years we COULD do
it, but I gotta tell ya, I want a child, and I dont want to have to be
in a wheelchair to play catch with him! LOL

Jazz Mann

herlihyboy wrote:
- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding.

Your paid-for Accord is more than adequate for a family of three or
even four. I like your plan to have an emergency fund for another
vehicle (or for maintenance as your other two get older). However,
once I reached my desired amount, I wouldn't go buy something else
unless I really needed it.

So, if you get to your desired amount (my target would personally be
closer to 8K because I'm not too picky about makes of vehicles) and
your vehicles are still running fine, don't go buy a different vehicle.
You said your income would drop after kid #1 is born so I'm assuming
your wife will be a SAHM (my wife is same; it's awesome for us and the
kids).

Once you're debt free and have your emergency fund built up (including
the car), max out on retirement up to 15% of your gross household
income. Anything above that, throw at the house. If this isn't
doable, look at your budget and see if you have too much house for your
new 35K income. Your mortgage might be out of line given the drop from
90K to 35K.

You guys are making smart decisions. That's evident by being debt free
except your house with no friggin' credit cards or other consumer debt.
Way to go.

I would continue to pile up the savings. After the child(ren) expenses will
rapidly out grow income and getting ahead now will make your life that much
easier then.

<jbraly[at]gmail.com> wrote in message
news:1105548998.587359.148920[at]c13g2000cwb.googlegroups.com...
- quote -

jbraly[at]gmail.com <jbraly[at]gmail.com> wrote:
- quote -

Have you checked the cost of adding a DVD player to one of your current
vehicles?

Its probably worth it to know, even if you go used car shopping. You
don't want to be falling in love with a minivan sans DVD for $1400 less
than a similar minivan with a DVD player and not knowing what the cost
difference is.

--
With sufficient thrust, pigs fly just fine. However, this is
not necessarily a good idea. It is hard to be sure where they
are going to land, and it could be dangerous sitting under them
as they fly overhead. -- RFC 1925

among other reasons to have a minivan.... i would buy one just for a
dvd player...
that was tounge-in-cheek comment at the end.
serious replies welcome.
thanks.

In article <1105548998.587359.148920[at]c13g2000cwb.googlegroups.com> ,
jbraly[at]gmail.com wrote:

- quote -

You can buy portable and in-car DVD players at Wal-Mart for
$300. Don't make a $25,000 decision based on a $300 feature.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

I need advice from someone who may know...

Quick glimps into my life.

Married. I am 28, wife is 27.

Debt free except the house. (just paid off a car loan in 20 months,
pretty thrilled about that).

Have a home, owe about 116,000 (only been in it for 2 years, our first
home).

Would like to have a child in 1.5 to 2 years. Will be our first kid.

Wife makes about 55,000, I make about 35,000 (she brings home the
bacon).

We have a home budget that we have been using for 5 years and it works
very well for us.

Here is our plan now that the car is paid off:
We plan to continue to pay $1,000 a month to an imaginary car. This
money will go into our savings each month, and in 20 to 24 months we
hope to buy a slightly used van (honda preferably) in cold hard cash.
(we currently own a 2003 honda accord and a 1999 toyota tacoma).

we plan to pay $1,000 a month on the house, which is slightly over the
minimum. However, we have thought about this:

Forget the new van paid for in cash and pay $2,000 a month on the
house. It would be nice to have the house paid off in less than 10
years. However, when we have the kid, our household income goes down to
just my income, and a $2,000 house payment wont be a reality. But
thinking I could have my house paid off before I am 40 thrills me.

Any advice? I sure love mini vans with those DVD players in them, baby
or no baby.

Jazz Mann