Silly Canadian wrote:
Just wanted to congratulate you on being on your way. I am so envious of your emergency fund. I can't wait to have that kind of security. I hope to be there this time next year, along with no credit card debts and only one car loan (my DH does not follow my line of thinking with buying a car for cash). Enjoy starting to live like no one else! Are you putting extra on your mortgage to get rid of it?
We were able to fund the e-fund through a couple of lump-sum payments. Having to accrue it on a monthly basis would be do-able, just more painful. We did set aside $10K on a monthly basis, but our latest lump sum has put us over the top for 6 months of expenses, which makes me happy.
I am ambivalent about the car loan issue; I've had used cars (paid cash), I've had new cars, and I usually put at least 30% down on a car if I am taking out a loan. My last three cars have been new, and kept for years, as it seems a reasonable compromise between reliability (critical in my urban area!) and ownership cost. I've never been upside down on a car loan, I take care of my car(s), and can usually sell them and recoup my downpayment. For example, I bought a new Toyota FJ Cruiser 3 years ago, and put down $7K on a $28K car. Blue Book on it now is $20K, and I owe under $12K. Since I have paid a small amount of interest, I've essentially broken even if I choose to sell the car now. I also make sure that a car loan payment isn't crazy-burdensome. For me, that usually means under $400 per month.
I am NOT pre-paying on the mortgage just yet. It seems to me that a 15 year fixed at 4.25% is just like pre-paying on it, without the cash flow compromises.
I'm much more likely to start putting away more $$ for DH's retirement. With the CCd paid off, and the house re-fi'd, it makes more sense to save more for retirement right now. Effective March 1, I will be maxxing out my 403(b) for the year. However, DH saves about half that for his retirement investing, and I want to bump it up.
If we have extra funds available after that, we're putting them away to build up a fund to buy a lakeview property.