anyway, as james and i were reviewing our taxes this year, we started talking about our financial plan for 2011. as our income went up x in 2010, our taxes literally went up 4x, and i told james my #1 financial goal for the year was to reduce our taxable income for the coming year, mainly through increased IRA contributions. james argued that he really wanted to use any kind of extra income to pay off our house faster and not worry about a little extra tax, and so began the debate...
i googled, "prepaying a mortgage vs. investing" and came across many interesting articles. a majority of the financial experts agree that mathematically investing = higher returns (according to historical market stats). some of the articles were almost humorous in their basic advice, i.e. it is wiser to pay off a high interest credit card debt vs. prepaying a mortgage (you think?), and then i found this article, which i thought was a refreshing view on the subject (ignore the website url, haha).
1. If you're asking yourself whether to prepay or invest, you're probably in pretty good shape.
2. Put away all pens and calculators and go for a walk with your spouse (this is not solely a math decision).
3. Do what you think is the best choice for your family and your life goals.
life goals, hm...my biggest life goal is to spend time with my family. i've often felt trapped that as long as james continues firefighting, i will never be able to stay at home (which btw, i completely support him in this and am glad he loves his job and schedule). however, after reviewing our finances more, we've created a plan to have our all of our debt paid off in 7 years. with no house payment, car payment, or any other kind of debt, it doesn't really matter how much firefighters make because i know we can live on the wages (plus the amount of money we would save on taxes would almost be a 2nd income [not that we make a lot of money, but going from two incomes to one greatly reduces anyone's taxes]). it is encouraging to know that if we continue on our current route, i can retire in 7 years! there is light at the end of the tunnel.
how awesome would it be to have james work 24 hours shifts, and then come home to the kids and me for 48 hours (i'd be home all the time!). we could get a family golf membership and play several days a week, go to the pool, volunteer more, have tons of time for family vacations, etc. i could go to the gym while the kids are at school and actually have time to plan meals at night (which will be so necessary when i have a house full of hungry boys!). oh the possibilities are endless. so i think i've been swayed...for us the emotional rewards and freedom not having a house payment provides far outweigh a little extra money in retirement. plus if our house is paid off and our kids' colleges are already saved for, the amount of money required for retirement should be much lower.
will all of this change? probably. who knows what life will throw at us, but having a plan for right now feels good and gives me hope. on the days when i am jealous of other mom's staying at home, i know that my time will come.
i am now 24 weeks along and have not done a single pregnancy post, ha. baby kehrli #2, i love you!! parker i love you, too. thanks for being my fun-loving crazy man.
until next time...go packers!!