Wants <==> Needs

Jenn are going through a season where we are SICK of paying mortgage payments.  We have been debt-free except for the house for nearly four years, but this stupid house mortgage makes us angry!

If we paid the regular monthly payment for a thirty year mortgage at a fixed rate of 6% interest, only 17% of the principal & interest payments made in the first year go to principal!  Where does the other 83% go?  To the mortgage lender!!!

No wonder people aren't winning financially!

So, Jenn and I are attacking the mortgage.  This translates to the fact that we are boosting income and cutting spending.

As part of the "cutting spending', Jenn and I are having to have the Wants vs. Needs discussion.

I have got to tell you, it is BRUTAL!

Here is what is up for cutting or eliminating in our budget:

  • Cable TV
  • Spending Money
  • Babysitting Money
  • Internet
  • Entertainment Money
  • Gasoline Money
  • Christmas Money

Here is NOT what is up for cutting or eliminating in our budget:

  • Vacation Money (we save for it monthly)
  • Retirement Savings
  • College Savings

I need some great ideas for saving a boatload of cash.  Anyone have any great ideas?

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11 Responses to “Wants <==> Needs”

  1. paul peterson November 16, 2007 at 4:27 am #

    http://www.thegrocerygame.com

    We’ve cut our grocery budget in half by “playing” this “game.”

    This is an incredible resource!

    Paul

  2. Saving Freak November 16, 2007 at 6:20 am #

    Regular baby sitting money should be cast aside for a baby sitting emergency fund. Instead work out some baby sitting agreements with other couples who have kids. One week they take all the kids, the next you take them all. The baby sitting money would only be used when no one could help you out for free.

  3. Moneymonk November 16, 2007 at 10:04 am #

    no not the Cable TV!!! LOL

    Joe you are taking drastic measures. What about the happiness factor? no fun in the buget at all

    As bonuses or pay raises increase, throw at the mortgage!

  4. pfodyssey November 16, 2007 at 9:17 pm #

    Unless you are maxed out on all your savings, I can’t imagine how it makes much sense to be aggressively paying off your mortgage…the cheapest money around.

    Perhaps you’ve already considered it all…otherwise, I might suggest a rethink.

  5. Clint Johnson November 21, 2007 at 2:52 pm #

    I recently posted a short list of money saving ideas on my blog. Check it out if you are interested. It has served me well.

  6. Mikey November 24, 2007 at 9:55 am #

    Not having the information about the rest of your budget and income I would seriously reconsider getting rid of a 6% fixed mortgage. Doing simple math I would compare using extra money to save 6% verse earning 8-15% (realistic)in a tax deferred investment. The mortage is also a tax write-off. Look at ALL of your interest rates both what you pay and what you earn. Put your money into the highest rates.

  7. Livingalmostlarge December 4, 2007 at 2:19 pm #

    I would never pay off the mortgage before maxing out 39K/year to retirement accounts (2 401k, 2 IRAs). Then maybe. Hope you’re doing it. If not then you aren’t saving enough.

    The tax break on the 401k alone 15% probably is way more than a 6% mortgage that is tax deductible. Gotta get all the money you can. And to do so maximize your 401k contributions. Lowering your taxable income, paying less income tax, but not lowering your standard of living.

  8. Tim March 30, 2011 at 7:20 am #

    All of theses comments about putting your max towards your savings accounts I can agree with. But when you take a 23-27 year old person that has just got into the house market, there is nothing wrong with paying more towards your mortgage so that it is paid off earlier in life. And just think if the house was paid off early then this person can be putting this same amount of money towards savings rather then a mortgage and make even more interest on there accounts sooner rather than later.

  9. Tom and Sandy Tursich February 23, 2013 at 8:42 pm #

    There is a tremendous feeling of accomplishment when you pay off a home mortgage. It is a feeling of freedom that you cannot get anywhere else. Therefore, I would recommend paying the house mortgage down as well as building your savings account and your 401K or pension plan. The IRS deduction you get from the mortgage payment does not compare to the interest you are paying on your mortgage both monthly and yearly. Living with no mortgage or debt, as we have for a number of years, is very freeing. Experience it.

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