After all that, I was surprised last month with a mid-year raise. It’s really an adventure when you are saving money. Now we only have two debts; the mortgage and my student loan (luckily my wife got one of those “free rides” everyone talks about) We pay cash for her grad school tuition.

I consider myself lucky that we are not wealthy and we are able to live comfortably. The trick is if you marry someone who is ultra-budget-conscious, do whatever she says! It will pay off in two or three years…

The house is only 798 sq ft, which is pretty small for our family of five. we manage though and when our term is up in four years, we will be able to use the equity to not only pay off our mortgage, but have enough to pay a very substantial down payment on a much bigger house.

Not only does this condition make saving for a downpayment difficult, but even with a healthy downpayment, at many banks I can’t qualify for a mortgage that would result in monthly payments hundreds of dollars lower than my rent has been every month for the last decade.

The best I can do is use my modest apartment as a work space and claim a portion of the rent for a tax benefit, concentrate on retirement savings, and prepare to skip town for a more affordable metropolis so I can actually have some breathing room someday.

As for your family-owned company’s profit-sharing plan, that’s really odd. I don’t know of anyone that’s ever cashed out their 401k plan when they moved their job. It makes me wonder if there’s a difference between your profit-sharing and a 401k. Perhaps people are not educated in the consequences. Or perhaps people fear that if they don’t pull the money out of the plan now, it could disappear if the company goes out of business. Or perhaps people are worried that it could disappear like many companies’ pension plans.

That’s pretty alarming.

Along similar lines: I find it boggling that people treat tax refunds as “free money” to blow on a car, a holiday, or whatever.

A big refund may be a nice surprise, but what it really means is that you’ve been managing your money badly: you’ve been overpaying the IRS, and now they’re giving it back with no interest paid. Better to adjust your withholdings and save the surplus into something that’ll actually give you a return on your investment, no?

And as for “refund anticipation loans”: *boggle*. Now you’re paying interest on money which was yours to begin with!

The one that scares me the most is the home equity line. The thought of losing my house just to buy a new sink or pay off credit card debt makes me break into cold sweats.

(Thanks to Get Rich Slowly for keeping me on the straight and narrow!)

Now my wife and I are trying to pay off our current house or move to something a little nicer. I’m torn, but I’ll enjoy my low mortgage in the meantime!