The Budget Couple

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Episode 48: 2019 Quarter 1 Budget Update

Nate goes solo and gives an update on the first three months of 2019. The couples’ current finances are discussed along with exciting news and long-term goals.

Show Notes

We are through the first quarter of 2019 already and we thought that we would bring you an update from our budget and how it’s going.

Our budget nor income has changed but I am happy to report that we have stuck largely to our budget over the past three months. We went over slightly last month on our extra expenses because we purchased a pair of concert tickets, but we will make that up this month.

We have made some movement on other parts of our finances and we wanted to tell you about it.

  1. We planned for the worst with taxes and luckily they were not as bad as we were expecting. We still had to pay, but we put aside more than enough money to cover that.
  2. All of the extra money that we had we put into our second mortgage. In July of last year, we took out a $30 loan to redo our kitchen and bathroom. As of today, we have a $6,110,98 left to pay off that debt. Our goal is to have it paid off fully before the end of June. I am a teacher and only get paid for 10 months, so not having an extra $600 monthly payment is helpful.
  3. Our house is down to $270K. Progress on it has basically stopped since we got the second mortgage. Roughly $500 of our $1700 payment goes towards principle. Once we have the second mortgage gone we will put all extra money on the house.
  4. Our car has about $12K left on it. It’s on a 0% interest loan so we pay what we owe each month and not a dollar more
  5. We have a Best Buy credit card that I usually use to buy gadgets through. I paid it off fully last month thanks to a big month in my online course sales
  6. Our ROTH contributions have finished up for 2018, and we are increasing our payments for 2019 up to the $6000 a year that is now allowed. That means that I am going to put $600 a month into mine since I’m a 10-month employee and Danielle is going to put $500 a month because she is a 12-month employee.
  7. We are discussing raising Danielle’s 401K contribution, but right now our goal is to pay off our second mortgage

What we have found is that when you see movement being made on paying down debt, it really focuses you on wanting to get rid of it. We have made massive movement on our second mortgage. Our original goal was to get rid of it by December 2019, but we should be done with it by June, a full 6 months sooner.

If we took our minimum monthly payment for the loan of $600 and put that down on our house each month and added it to our current principle payment that means we would putting ~$13000 down on the house each year. With $270K left we would have the house paid off in 20 years. That’s not counting any increases in income or extra that we would be able to put down like we do already. Our current sights are set on paying off the house in the next 10-12 years. 

As we said before, our goal is to enjoy the freedom that not having a house payment gives you. We are already putting about 15% of our income into retirement, and while we could increase it drastically instead of paying the house off, we like the freedom that we have by not have a significant monthly payment.

So to recap, our monthly budget has been working for us (short term goal)

We have a plan to pay off our second mortgage (mid-term goal)

We have a plan to pay off our house (long term goal)

Having goals that require different lengths of time and ability levels is important and has really helped us focus and put our money where our goals are.

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