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  1. #1
    boltfam is offline Emerald level (3000+ posts)
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    Default Mortgage almost paid off...advice

    We will be paying if our mortgage in the next year and am looking for some good resources on how to be wise with our finances in a new financial stage.

    We have five kids (surprise twins&#128521, and our house fits us all, but it's tight. We would like to move to a bigger house, but the idea of no mortgage is appealing, especially since I'm a Sahm mom, and our kids are in private school. We are very frugal now bc we have to be. While I'd like for things not to be quite so tight, I don't want to get into a habit of spending frivolously.

    We're maxing out dh's 401k and putting away money for the kids' college funds (we could increase that), but I toy with the idea of investing.

    Dh and I are not risk takers and I'm not sure if we'd want to deal with rental properties. Working with a financial advisor scares me a little bc we lost a substantial (for us) amount of money due to an unwise investment on his part, and I feel like most have their own interests at heart, kwim?

    What I think we need help with the most is deciding where we want to go financially from here since we will have more expendible income. TIA!

    ETA: our kids are 10,7,5, and 19 month old twins
    Last edited by boltfam; 04-19-2018 at 09:28 AM.

  2. #2
    KrisM is offline Clean Sweep forum moderator
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    How much more would you spend to move to a bigger house? Would the payments on that amount be less than your current mortgage payments?

    Not having a mortgage is nice. We are able to save more for retirement than before. We save a little for college as well. We plan to slow down retirement saving when we have kids in college and direct that cash flow for college costs. Being able to put more into retirement now is a big part of being able to slow it down later, I think.
    Kris

  3. #3
    hillview's Avatar
    hillview is offline Blue Diamond level (20,000+ posts)
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    check out bogleheads.org to get some financial advice and some great reading. Suggested books:
    Automatic Millionaire
    Millionaire Next
    Making the Most of Your Money NOW
    DS #1 Summer 05
    DS #2 Summer 07

  4. #4
    meggie t is offline Platinum level (1000+ posts)
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    Can’t tell you how to invest but I would definitely stay put with no mortgage. You say you fit your house (which I think means “it’s fine but we’d love more space”), so I would try and purge and organize to make it work better for you if possible. I grew up one of 7 children in a 3bd/1.5ba/1500sf house so my perspective of fitting into a house is somewhat jaded. I feel most people have way more space than they need, and much of it is wasted. Make your space work for you and I think you’ll appreciate the financial freedom!!

  5. #5
    ezcc is offline Gold level (500+ posts)
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    Moving comes with all kinds of expenses besides just the cost of the house- I would think long and hard before doing that especially if you like where you live. As kids get older they actually need less space I have found, and are home less in general. It's pretty easy and straightforward to set up an investment fund with index funds at Schwab or Fidelity or someplace like that. I would just put most of what you are paying towards your mortgage into a simple investment account and use the rest to spend on things to make your life easier/better. You could also set up a spousal ira (I think that is what it is called) basically a retirement account for non working spouses.

  6. #6
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    We have been mortgage free for right at a year. With taxes and insurance I still put away almost 25% of our previous monthly house payment each month to cover those.

    We just kept piling money in a short term savings account. If you are going to do anything in the next five or so years, it's probably best to just keep it accessible. Mentally I needed to put it in a separate account than our checking, but that was about it.

    But we also knew we would need to be updating at least one if not two vehicles in the next five years. Plus buying a teenage vehicle.

    We were on the fence about moving. I was only going to move for the perfect house in the perfect location. We just found a great bargain on a home. We are DIY and it was discounted for entirely cosmetic things. So we will be back to a mortgage starting in August. Part of moving is to have the space now, but with the deal we got and the labor we'll put into it, it will definitely appreciate in value also.

  7. #7
    boltfam is offline Emerald level (3000+ posts)
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    Quote Originally Posted by KrisM View Post
    How much more would you spend to move to a bigger house? Would the payments on that amount be less than your current mortgage payments?

    Not having a mortgage is nice. We are able to save more for retirement than before. We save a little for college as well. We plan to slow down retirement saving when we have kids in college and direct that cash flow for college costs. Being able to put more into retirement now is a big part of being able to slow it down later, I think.
    In order to get even close to what we want (and make our move worth it), our mortgage would have to be the same as it is now or even bigger.

  8. #8
    boltfam is offline Emerald level (3000+ posts)
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    Quote Originally Posted by hillview View Post
    check out bogleheads.org to get some financial advice and some great reading. Suggested books:
    Automatic Millionaire
    Millionaire Next
    Making the Most of Your Money NOW
    Thanks!

    Quote Originally Posted by meggie t View Post
    Can’t tell you how to invest but I would definitely stay put with no mortgage. You say you fit your house (which I think means “it’s fine but we’d love more space”), so I would try and purge and organize to make it work better for you if possible. I grew up one of 7 children in a 3bd/1.5ba/1500sf house so my perspective of fitting into a house is somewhat jaded. I feel most people have way more space than they need, and much of it is wasted. Make your space work for you and I think you’ll appreciate the financial freedom!!
    Yes, I agree that many people have way bigger houses than they actually need. I remind myself of that all the time that people used to raise more kids in less space than we have and when others tell me we need a bigger house.

    Quote Originally Posted by ezcc View Post
    Moving comes with all kinds of expenses besides just the cost of the house- I would think long and hard before doing that especially if you like where you live. As kids get older they actually need less space I have found, and are home less in general. It's pretty easy and straightforward to set up an investment fund with index funds at Schwab or Fidelity or someplace like that. I would just put most of what you are paying towards your mortgage into a simple investment account and use the rest to spend on things to make your life easier/better. You could also set up a spousal ira (I think that is what it is called) basically a retirement account for non working spouses.
    Thanks!

    Quote Originally Posted by belovedgandp View Post
    We have been mortgage free for right at a year. With taxes and insurance I still put away almost 25% of our previous monthly house payment each month to cover those.

    We just kept piling money in a short term savings account. If you are going to do anything in the next five or so years, it's probably best to just keep it accessible. Mentally I needed to put it in a separate account than our checking, but that was about it.

    But we also knew we would need to be updating at least one if not two vehicles in the next five years. Plus buying a teenage vehicle.

    We were on the fence about moving. I was only going to move for the perfect house in the perfect location. We just found a great bargain on a home. We are DIY and it was discounted for entirely cosmetic things. So we will be back to a mortgage starting in August. Part of moving is to have the space now, but with the deal we got and the labor we'll put into it, it will definitely appreciate in value also.
    I would have to do a separate account too to know that we’re not just blowing that extra money! yes, we’ll have to be replacing both vehicles within the next few years, too. We are in the same boat about moving as you were...we’d do it for the perfect house in the perfect location at a good price. Glad you found something! I hope your move goes well!

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