What do we save for first?

**terry1156** · 01-06-2005, 10:07 PM

Re: What do we save for first?

I would suggest that you make a choice between which business your husband wants. If he wants the state business, then there is no need for a new house since he won't be doing the taxidermy. If he wants to do the taxidermy, he doesn't need to do the state job.

If I were you, I would save every penny I had for a down payment on the new house. Once you had the 20% in cash, I would buy it and expand your husbands taxidermy business. I would rent out the other house if you really can get $800 a month in rent for it. Then you take $700 of the rent to pay off that loan and $100 toward your retirement savings. This gives you $100 for retirement plus all the equity you earn in the house.

**PrincessPerky** · 01-07-2005, 08:20 AM

Re: What do we save for first?

Congrats on the pay off.

**akaivyleaf** · 01-07-2005, 01:15 PM

Re: What do we save for first?

You didn't mention children? I'll assume you don't have any and you just want to expand for the two of you. Therefore I would keep the house that you presently have and rent it out...you still have eqiuity from that property, are realizing a tax benefit by mortgage interest. The equity can be a form of retirement savings. While its just the two of you, consider a ROTH IRA to further save towards retirement. This money is aftertax since I'm not sure if either of your employeers offer 401K plans. In other words I would work on starting, getting in the habit of savings for retirement and other expenses getting older affords. Plan for that eventual future now, while you can.

As far as getting a contractual job with a state entity. .. Thoroughly research this. Most states are having serious budget crisis and their independent contractors are among the first to go, no matter what that contractor is doing. Sure they are saving on not having to pay insurance and other employement benefits but the base amount is just as costly and frankly it looks bad to the citizens of the state to pay these outside intities for things they can just tighten up on and bring in house. If he's getting a true state job, where the check is payable from the "Great state of ____________" Thats different.

Finally I would question why you "need" a bigger house. If you want to do taxidermy, can you not build a structure or buy one of those untility sheds and expand on it in your back yard. Cement isn't that expensive and you can lay it down yourself with the help of friends one Saturday afternoon. You might have a barbeque, invite the friends out and erect a taxidermy shop, which is cheaper than buying a new house.

Again, congrats on the payoff. What a wonderful feeling.

**Stacyjh** · 01-07-2005, 06:11 PM

Re: What do we save for first?

Thank you for your input. That is a good idea about renting the house. I never thought of automatically having $100 extra from this for our retirement. That would be like killing two birds with one stone. I didn't give enough info on the rest though. We do have one baby with plans of having more children so we will eventually need a bigger house but right now the house is big enough, but I'm thinking five years down the line we will need a bigger one and it would take that long for us to save for a down payment(if we didn't save as much to open the business or for retirement.) We already have a "taxidermy shop" in the back yard. It is actually a mother-in-law house that he works out of. However, we have since found out that this is illegal in the town we live in to run a business out of a house. You can run one out of a detached "building", however, we don't have the required space on our lot to build one. So, we are not able to put up a sign and are always worried we will get in trouble. His taxidermy business is getting much bigger and he is out of room for deep freezes, show room mounts, ect, but mainly the legal thing has us worried. He has researched the state business enough to know about 90% he could make a go at it, but if he opens it he would still keep his taxidermy shop open(He does taxidermy in the winter and state work in the summer), but would quit his other job, which is the kind of business he plans to open, so we would be short of that income for a year until the state checks came in. So, if we buy the house first, we have to wait several more years to open the other business (not saving as much for retirement). But if we open the business first it will take longer to be able to afford the house and we may be in trouble with running a taxidermy business out of the small house. And at the same time, I am thinking we have got to start saving for retirement. You're probably throughly confused, but if not, any more suggestions?

**amomof4** · 01-08-2005, 02:48 AM

Re: What do we save for first?

If real estate has a tendency to go up in your area, I would keep the house as a rental. My husband owns a few houses that he wants to pay off to use as income at retirement.

Keep in mind that managing property can be a big pain. $100/month will probably all go towards expenses such as repairs, advertising, etc. Also, you would need to keep it for the times when the property is vacant so you can still make your mortgage payment. There is also a good tax deduction with depreciation. Did I mention it was a pain to manage property?

**akaivyleaf** · 01-08-2005, 05:28 AM

Re: What do we save for first?

I can agree that its a pain to manage property, you still have the maintenance bills too. But I think you should concentrate on saving for the children prior to retirement savings so think of what you had thought for retirement in terms of some long term savings for the children. Even if you're not inclined to pay for college, senior year in highschool is about the most expensive year EVER, including college. Of course you can homeschool....

You didn't mention anything about health benefits, and if you're going to be self-employed this is a very real and necessary expense to factor in too.

Bottom line, I would hold off on buying another house (and I hear you about running an illegal business) untill you get other financial things in place, such as insurance, savings for child(ren), if you're total convinced to go with the state job, start getting some of those benefits such as inquiring about a special use permit? Most states issue them- which supercede city/county ordinances and would quite possibly legalize your taxidermy business. You gotta know someone in state government.

**PrincessPerky** · 01-08-2005, 07:30 AM

Re: What do we save for first?

Oh homeschool, cheaper and better!

**Stacyjh** · 01-08-2005, 12:11 PM

Re: What do we save for first?

Thank you everyone for your input. You have given me some great ideas. I will definately check into getting a special use permit for the taxidermy business. If that was legal, I would not be nearly as worried about moving as soon. We do have health insurance through my job, which I do not plan to quit even if my husband opens a new business that takes off. I work at home (except for about two hours a day)(I'm a real estate appraiser), and love my job, so I don't plan to quit. You have good suggestions about saving for the children's education. College seems along way off now, but I'm sure it will be here before I know it and I would feel terrible if they were not able to go since I was not smart enough to start saving for them. I just feel like I can never get ahead with so many things to save for. Your suggestions have really helped. Thank you all very much.

**amomof4** · 01-08-2005, 12:13 PM

Re: What do we save for first?

Saving money for the children is an interesting thought. I heard of a family who paid for their children's college, and as a result had no money for retirement. Not one of the children helped the parents, and they thereafter lived in poverty. Just interesting.

With regards to senior expenses, I am a firm believer that children should pay their own way, at least part of it. The should have a job to pay for their wants, and the parents can pay for their needs. I think it helps the children to realize the value of money. My girls have jobs (they raise dogs), and they are only 13 and 14. They get so much money for their wants and needs, and should they spend all their money, they don't get anything until they earn money again. In the beginning, they would spend all their money, and sometimes not get any more for 3 months, less they babysat. Now they are starting to learn not to waste it so much.

I had one daughter who needed new shoes every month. Either the white ones would get too dirty too fast or she would buy a pair that didn't fit because she liked them. Now that she buys her own shoes, she doesn't buy them every month. My other daughter got smart very quickly. She decided to just get her sister's hand me downs and not buy shoes at all.

If they want to buy school lunches, they pay for it. If they want to take their lunch, I pay for it. They are really learning to budget.

What do we save for first?