Okay guys; Been doing this for a while now, time to toss everything back out into the ether web for advice: Here is our current financial status...

Technically, we are Debt free! (we still have monthly payments, just... technically out of debt on the balance sheet)

Debts:

Mortgage: $89,000 @ 3.25%
Car Balance: $8,000 @ 0%

Assets:
Retirement Account: $90,500
EM Fund: $10,500 (3 Months)

Here is our monthly budget:

Core Costs:

Medical $150.00
Gas: $300.00
Property Taxes: $300.00
Kids Allowance: $22.00
Ford: $366.00
Association: $328.00
Comed $150.00
Netflix $8.00
LA Fitness $40.00
American Family $114.00
Trader Joes $530.00
Gymnastics $42.00
Wifes Phone $84.00
My Phone $10.00
Comcast $75.00
Mortgage $670.00
Union Dues $100.00
Misc Target & Clothes $150.00
$3,439.00

Here is my Misc:

Entertainment $650.00 (going out to eat, drinks, etc)
Gencon $112.50
Birthdays $100.00
Christmas $83.33
Anivs & Holidays $70.83
Total $1,016.67

Our Take home Income is: $5,434.00
This leaves us with $978.33 for savings.

Currently, we are building up a "1 year ahead" property tax saving account of $228.67 per month, and we are prepaying our mortgage by $582.00. Somewhere, we eat or lose, or random stuff happens that wash away the remaining $167.66


We, at the moment, don't have any Roth IRA's, relying on an Annuity which I pay into, and a Pension Plan. My wife just went back to work in starting up her own business, which means she makes $0 for a while. We own 1 car which is 13 years old, that for the past 2 years I've dumped another $700 into repairs for.

Is there anything that sends up red flags and alarms that I should reverse course on now, or cut out entirely. (Gym membership, btw, we all use for that amount and lift weights and go 3 times a week.... so... please don't suggest that).

There is a calculated scenario where I could pay off my condo by 2018 which would allow us to rent it out and earn something off it. ::shrug:: At this point, I'm kinda picking and looking down a few different paths... Do I shore up EM fund? Do I keep prepaying? I hate having more than 3 months in a 0% savings account.... Do I start saving for a new used car? Should I start looking at investing? Should I just tackle the current car payment even though it's 0% to free up monthly budget? Should I try and squeeze a few of my bills down?

What suggestions does everyone here suggest?

Record scratch....you owe $8k on a 1999 Ford? How did that happen?

What is American Family?

Seems to me that you could sell your Ford, buy a newer car to you, and cut back that 360 dollar payment if you're looking for a way to save money.
Your emergency fund is not supposed to be a moneymaker. It's supposed to sit and be handy when and if you need it. I would leave it where it is, and not think about it. We're all in the same boat, but when those interest rates rise, what a happy day it will be for us all!

There are a lot of things you could do with your extra money, but you just have to decide for yourself. Is prepaying your mortgage/property tax bonus making you happier than having more in your retirement? That is only for you to decide.

No. Technically, you have a positive net worth. You are not debt free.


This baffles me. How did you end up still owing $8,000 on a car that old.

Not necessarily, because interest rates usually rise in response to inflation, so rising interest rates will probably be accompanied by increases in the prices of most things you buy (food, clothing, gasoline, etc.). Back when banks were paying 5% for a regular savings account and 10% for a five-year CD, inflation was running in the double digits. We're actually a little better off at today's low interest rates.

As for areas to target for budget-cutting, you might look at the $650 entertainment budget to see if that could be trimmed even by $100 or so. Our take-home income is close to twice yours but our entertainment budget is only $200/month and we usually don't spend that much. That doesn't mean we never go out or have fun, but most of our entertainment doesn't require spending money. Cooking good meals at home is entertaining for me, playing music with friends, taking a walk outside to look at the stars at night, reading a book from the library, etc. ... I count all that stuff as entertainment.

I disagree that interest rates are a major indication of inflation. Interest rates are a mechanism in which the Government can manipulate the economy. So, you can have high interest rates and low inflation, or the opposite - low interest rates and high inflation. Or, as Brad suggests, low interest rates and low inflation (also high interest/high inflation). The % change in CPI-U in 2006 was 1.66%, compared to 2012 being 1.29%. And the interest rate at my bank was much higher in 2006. Another one...2005 2.41%, 2011 2.14%. I'm not asserting this is the correlation, just that there are weakly connected, despite the fed's hope to control anything and everything monetary.

Sorry guys!

The Car we own is a 1999 car... the car with the payment is a 2009 car.

Kinda off by a decade there

Clearly it's not a tight or perfect relationship, but I think the general principle holds that the Fed increases interest rates when it wants to try to control inflation, and reduces them to try to encourage more spending/borrowing. See http://www.investopedia.com/ask/answers ... z2NAt1luef

I think it's unlikely we'd see regular savings account giving 5% interest again without a pretty significant increase in inflation.