Anonymous wrote:

Anonymous wrote:If a porch will greatly enhance your daily quality of life, do it!

We just bought a car with cash (instead of taking a loan) so we have less savings to list on college financial aid forms.

Don't listen to this troll.

I feel like I have given up hope on qualifying for financial aid...

Anonymous wrote:If a porch will greatly enhance your daily quality of life, do it!

We just bought a car with cash (instead of taking a loan) so we have less savings to list on college financial aid forms.

Don't listen to this troll.

If a porch will greatly enhance your daily quality of life, do it!

We just bought a car with cash (instead of taking a loan) so we have less savings to list on college financial aid forms.

OK i was having some issues with caches and DCUM (and Instagram) wouldn't load on my computer for a day there. But I had some space to think about things!

I finally put the stuff in a debt payoff calculator and came up with a plan I happy with and that seems to be a win / win so there's that.

Two - interesting point here to consider the rate of returns but also factoring in taxes. I am guessing my tax rate is appx. 30%. So when thinking about my HYS, if it's 4.3%, so I really consider that it's only 70% of that - 3.01%? Is that the correct way to look at it, or no?

I still don't have a porch but I have some more of a plan. I am on a new personal finance journey.

“Start Where You Are. Use What You Have. Do What You Can.”

So over the past 6 years you've essentially invested $115,200 (12x6x$1600) into your mortgage, with a 3.6% rate of return.

You could have put some of that money toward your student loan, and gotten a 6% rate of return there.

You also could have put it into a 529, and probably got a 5-8% rate of return depending on the mix of stocks and bonds you invested in.

And recently, you could have put that money into CDs, I-bonds, or even a savings account, and gotten a 5-8% totally risk-free rate of return.

Do you see how you've lost out on a large amount of money with the decision to prioritize paying off your low-interest rate mortgage early?

Anonymous wrote:For the car loans - I could pay off right now but instead about to put the money in a CD earning 5%. I feel that is better than 2.8% interest rate but if we taxes that is not correct could easily reconsider.

You are doing these weird compartmentalizations. You are comparing the car loan against HYS rate. The thing you should do is compare the HYS rate against your highest interest rate. If your student loans are at 5% or higher, placing your money into the HYS account is losing overall money (again basic math). So pay off the student loan. Once that loan is eliminated, you can ask yourself the question of the car note (or mortgage - whichever is higher) vs the HYS account.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OK I take the point that you are all aligned on college over porch. So I will take that into extreme consideration going forward.

On the mortgage vs. student loan thing - I think my DH and DCUM are going to have to agree to disagree. I get what you are saying about 6% being higher than 3.6%. But his feeling on the loans is the total amount of interest paid on $150K at 3.6% is more actual money than what you pay on $28K at 6% and then he also feels secure in where we have to live. Without being able to do the actual math on the interest myself - I think it's a close enough call to be a wash.

HHI is $300K. I don't know the actual amounts currently in the 529s - I will find that out ASAP.

Why are you incapable of doing the math? Also your husband is a complete moron.

If I go to bankrate.com and do the loan calculator - I get $11,283 in interest on the mortgage if we pay it off in 4 years, and $3,563 in interest on the student loans if we pay it off in 4 years. That’s the math I was talking about fwiw.

The way we are currently slated to pay off both mortgage and student loans in 4 years as calculated there is $14,846 in interest. I also put in 28,000 student loans paid off in 1 yr 2 months - with the $400 / week going to that instead of the mortgage ($1,204.84 in interest) and extending the mortgage to be paid off in 5 years 2 months (accounting for the loss of $400/week during the time it went to my student loans) for $15,084 in interest and a total of $16,289 paid in interest to pay off both student loans and mortgage in that time frame.

Again I’m open to suggestions but I am not yet fully convinced that I am brain dead.

I have zero idea what you are saying here. But just understand that there is no math which tells you that paying off a lower interest loan before a higher interest loan ever makes any sense. Regardless of the principal amounts involved.

It may make sense to you for reasons other than the math that the rest of us don’t need to understand.

Why pay off the mortgage faster at 3.6% when you could take the $1600 and get over 5% in a 6 mos CD? Or, put the $1600 into 529 plans and let it grow tax feee? I wouldn’t do the screened porch until I was comfortable with college savings.

Hey, 16:07. The half-mil was 2 colleges and 2 weddings combined. We have hefty retirement funds, lifetime medical, and long term care policies. We’ll be fine. The porch is my favorite room of the house.

I’ve kept a budget spreadsheet since the early 1990s. YMMV.

What I was trying to point out was that living on one income (of two) for 22 years allowed us to pack away savings and investments, so that we could do more without worry in later years.

Anonymous wrote:

Anonymous wrote:Spent $50,000 on a porch in 2008. Started paying $50k/yr college tuition in 2009.

I love my porch. Two college tuitions paid. Private LACs. Two weddings paid. ($500k all in). All bills are paid. All we have is the very low mortgage on the house.

On <$250k/yr in current dollars.

Honestly this was the benefit of living on one salary for the first 22 years of our marriage.

You make less than $250K/year and chose to spend ~$250K per kid for weddings?!!?!!?!?! That is insane!!!! Glad you pay your bills, but I cannot imagine spending that much with that income.

I think PP is talking about 500k all in for 2 college tuitions + 2 weddings.

Pay off the car and the student loan. Save the car payment amount for a next car, and buy it without debt.

You have debt all over the place—you don’t spend within your means. The idea that you “don’t have debt” because you aren’t running up a credit card is delusional.

Anonymous wrote:Spent $50,000 on a porch in 2008. Started paying $50k/yr college tuition in 2009.

I love my porch. Two college tuitions paid. Private LACs. Two weddings paid. ($500k all in). All bills are paid. All we have is the very low mortgage on the house.

On <$250k/yr in current dollars.

Honestly this was the benefit of living on one salary for the first 22 years of our marriage.

You make less than $250K/year and chose to spend ~$250K per kid for weddings?!!?!!?!?! That is insane!!!! Glad you pay your bills, but I cannot imagine spending that much with that income.

Anonymous wrote:

Anonymous wrote:No way. You have a car loan and student loans.

OK but the reason I have a car loan is because I am making more money in the HYS than paying it off.

How is this helping you if $1600 is going towards the mortgage and there are many better places for the money.

Anonymous wrote:

Anonymous wrote:He did say we could stop paying the extra towards the mortgage if I really wanted to stop recently but then I said - no, it’s ok because I thought that was better than spending the money.

BUT I guess I can say actually we should first put it to my student loan and then to the kids college fund - which is not tax deductible like to mortgage and maybe that works.

Still no porch for me! Maybe some day.

Is this really the first time that you thought of the fact that the choice is not just between paying off low-interest mortgage debt vs spending the extra, but instead include "paying off higher-interest debt" and saving for college, emergencies, and (once that's covered) indulgences like screened porches?

+1 We have no debt outside the mortgage, adequate college savings, and enough cash on hand I still have wavered on getting a screened porch that I've wanted for 15 years for our house. It's just a fairly large expense that is hard to justify if you have competing priorities. It would never occur to me to spend that much on a relatively frivolous want when I still had debts outside the mortgage. Maybe you need to see what you currently spend on frivolous wants and lessen those and start a screened porch fund so you're actually saving it, not cannibalizing your other priorities/obligations.

Anonymous wrote:He did say we could stop paying the extra towards the mortgage if I really wanted to stop recently but then I said - no, it’s ok because I thought that was better than spending the money.

BUT I guess I can say actually we should first put it to my student loan and then to the kids college fund - which is not tax deductible like to mortgage and maybe that works.

Still no porch for me! Maybe some day.

Is this really the first time that you thought of the fact that the choice is not just between paying off low-interest mortgage debt vs spending the extra, but instead include "paying off higher-interest debt" and saving for college, emergencies, and (once that's covered) indulgences like screened porches?