Hey folks, thought I'd toss this out here to get some ideas from the sharp cookies floating around this site.
Brief info: My wife and I have no debt except for our mortgage. No car notes, credit cards, etc. Nothing but the mortgage. I'm maxed out on my company 401k to the matching limit and we now have about $22k cash in an MMA savings account which is roughly 6 months of living expenses for us. We recently had our first child and now we need to start putting money aside for college. In addition, we're going to start saving money for a car so that when one of ours finally dies (probably within 2 or 3 years) we'll be able to pay cash for a replacement. And then of course we want to start saving some dough for a future house purchase as we'll probably outgrow (depending on future kids!) our current house in roughly 5 years. So yeah, lots of things to save for but that's ok!
In trying to think of what to tackle first, for some reason I thought about taking a good chunk of our savings and using it to knock down our mortgage to the point where we stop paying PMI. I'm not sure of the exact amount yet, but I believe it will take about $12k to do this. We would then fund back up our savings account to $20k.
So does anyone have any thoughts about this? Is it worth using about half our savings to get rid of the PMI or should I just "ignore" it and focus on my other savings and investment goals? If it makes a difference our MMA is getting about 5%, our mortgage is about 6.5%, and I believe our PMI is about $45 per month.
Thanks for your help guys!