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One mortgage payment left...trying to eyeball a new budget.

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    One mortgage payment left...trying to eyeball a new budget.

    It's very strange to say that we will be paying off our home in 2 weeks. We bought it in July of 2018 for $342,000 and had a mortgage of $274,000. During that time, we also invested around $25,000 per year in our combined Roth IRAs and 403b's. I am 40 and my husband is 42. I'm now trying to eyeball what our new budget will look like and would love any input if it looks like I am missing anything. Here is what I believe our pay/deductions will look like come 1/1/2022 once we up our retirement contributions.

    We are both paid 24 times a year and this is what my breakdown looks like per pay:

    Add Fed Tax Amount: $50 (I do some online teaching as a independent contractor and this helps to offset my taxes)
    403b: $979.16 (We can pay an additional $3,000 since we have been in our school district for over 15 years and the limit for next year is $20,500)
    Township Tax: $2.17
    Medical PPO: $85.83
    Vision: $6.69
    FSA: $25
    Retirement: 7.5% (Public School Pension. I cannot adjust this amount nor do I have a say in how it is allocated).

    Net Take Home: $2,742 (every two weeks)

    I also receive a $5,000 bonus each July.
    I work as an independent contractor and make around $6,000 teaching online.


    This is my husband's breakdown:
    403b: $979.16
    Township Tax: $2.17
    FSA: $25
    Union dus: $39.92
    Retirement: 7.5% (Same pension as above)

    Husband's Net Take Home: $1,381 (every two weeks)

    There are other deductions such as social security, state taxes, etc. however they are not clearly listed on our paystubs.

    We have absolutely no debt after Oct. 15th

    We have some sinking funds and an emergency funds that are combined are valued at about $35,000.

    We are eligible for our pensions at 55 and we will receive 80% of the average of our top three years of salary.*

    Our investments look like this:
    My old 403b: $7,405 - From previous job.
    College fund for step daughter (his 10 year old kiddo): $81,571
    His Roth IRA: $13,971
    My 403b: $44,516
    My Roth IRA $70,212
    His 403b: 71,753
    * We have around $200,000 combined in our pension, however it is a defined benefit plan and we will receive the amount that I listed above.


    Our mortgage payments with the extra principal have been approximately $7,600/mo. $800 of that is taxes and insurance, so I need to ensure that we are still putting that aside. I guess it is hard for me to figure out what our budget should look like.

    Goal-wise, I think we would like to stay in education for another 8-9 years and then downshift to part time work that is much less stressful. We will need to figure out healthcare.

    Expenses look like this:
    Monthly
    Gym $65
    DISH Network $76.37
    Netflix $10
    Escrow $800 (This covers taxes and insurance)
    Cell Phones $50.00
    Sewer/Refuse: $200 (January, April, July, October)
    Water Bill $150: (November, February, May, August, November)
    UGI (Gas) $66.00
    Met Ed (Electric) $167.00
    (Total: $1,434)


    Yearly

    $1,700 – Car Insurance

    Monthly Automatic Transfers into Sinking funds:
    Car Repair Fund: $100
    Car Savings Fund: $250
    Dog Fund: $100
    Home Repair Fund: $200
    Pool Fund: $50 (Covers chemicals, repairs, etc. for our above ground pool)
    Gifts: $200
    Travel: $400
    General Savings: $350 - To make purchases like cell phones, furniture, random things.

    I did not list variable expenses like food and shopping because I am trying to figure out how much those categories should be. Before I decide on food, entertainment and shopping budgets...can you think of anything I am missing?

    I know this was long, so if you made it this far - thank you so much for reading!

    ***this budget reflects our new budget. When we were aggressively paying down our home, we were not contributing as much toward retirement, so our take home was higher.





    Last edited by SGP20162016; 10-05-2021, 02:30 AM.

    #2
    What was your required mortgage payment (minus the $800) and what are you going to do with that money?

    do you each have term life insurance?

    if you are maxing everything for retirement then it may not matter what your expenses are (within reason)

    Are you planning on investing in a taxable account?

    Berks county?

    Comment


      #3
      What was your required mortgage payment (minus the $800) and what are you going to do with that money? It is being absorbed into retirement savings. We were not maxing out our retirement before.

      do you each have term life insurance? We consider ourselves self insured.

      if you are maxing everything for retirement then it may not matter what your expenses are (within reason) We will be. I think this is really what I am trying to sort through.

      Are you planning on investing in a taxable account? I thought about it. Not convinced whether it’s necessary or not.

      Berks county? No.

      Comment


        #4
        You seem to have all the bases covered for different savings and investing buckets.

        If you want to continue investing then,
        maybe either a taxable account, start a business, some alternative investing, or real estate investing.
        Beyond that, enjoy life and the money more.

        There are only so many (responsible) places to go after you max out all of the available options
        Brian

        Comment


          #5
          I didn't see property tax or home insurance on the list. Presumably these have been included in your house payment up to this point. Going forward you'll have to pay them directly. I am assuming these are roughly 1% of your homes value, $3,400 each per year.

          When I worked my budget out, these odd ball things that I pay ever 6 months or annually, I converted to terms of $/yr, then $/month. So roughly $283 per month for insurance and the same for taxes.

          Comment


            #6
            Originally posted by SGP20162016 View Post
            Our mortgage payments with the extra principal have been approximately $7,600/mo. $800 of that is taxes and insurance, so I need to ensure that we are still putting that aside. I guess it is hard for me to figure out what our budget should look like.
            I am mistaken, I read your post too fast. I saw it as soon as I hit reply ><.

            $800 per month for the both of them seems high.

            Comment


              #7
              I've not worked through how to respond properly... In part because I'm incredibly confused about how you were making $7600/mo payments on your home, and paid off a $274k mortgage in just 3 years, on what appears to be a roughly $125k gross income as a pair of schoolteachers. While my imagination can run wild with ideas of how that's possible, most of them are neither legal nor realistic.
              "Praestantia per minutus" ... "Acta non verba"

              Comment


                #8
                Originally posted by kork13 View Post
                I've not worked through how to respond properly... In part because I'm incredibly confused about how you were making $7600/mo payments on your home, and paid off a $274k mortgage in just 3 years, on what appears to be a roughly $125k gross income as a pair of schoolteachers. While my imagination can run wild with ideas of how that's possible, most of them are neither legal nor realistic.
                same. but I bet we aren't understanding somthing.
                LivingAlmostLarge Blog

                Comment


                  #9
                  So sorry for the confusion, this will be our new budget after we pay off the house. The $7,600 will be our hew take home pay after we max out retirement accounts. We were bringing home much more per month when we were aggressively paying down the house.

                  My husband is a teacher and I am ad administrator. My base salary alone is $133,500.

                  Comment


                    #10
                    Spend as you see fit. You are debt free with a large income of like $200k I assume? So then enjoy! You have a pension so why worry? Sounds very secure. I know others won't think so but my mom retired at 55 with less than $200k saved and a large pension and free medical for life. Her bills? Nil. So while she had nothing saved she had no expenses so her monthly $5k/month pension and now pension plus SS = all spending money.
                    LivingAlmostLarge Blog

                    Comment


                      #11
                      Congratulations on the upcoming mortgage payoff!

                      You may want to look at adding umbrella insurance coverage to protect your income and growing wealth. If you get umbrella insurance, you may be required (by your insurer) to adjust your home and auto liability coverage.

                      And speaking of insurance, you might want to revisit your home insurance coverage and make sure it's what you want and not just what the mortgage holder required you to have.

                      Comment

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