We finally did something with it :) If you recall, one of the perks of refinancing our 1st mortgage was that we got to skip a month’s worth of payments (we had to pay the interest, of course, but it was all included in our closing costs). So since we didn’t have to pay June’s mortgage this month, it meant we had an additional $2,000 laying around that was previously budgeted for!
We didn’t know what we were going to do with it at the time, but after some good thinking and rationalizing, we decided to break it up in the following ways. Wanna take a guess before I tell ya?
- We finally topped off our Emergency Fund at $10,000. It had gone lower over the past few months due to wiping away our credit cards again, and now we’re back to where we like it. This covers about 2 months worth of expenses instead of the normal “3-6” experts usually recommend (or 1 year when you’re self-employed), but added to our $30k total from other funds we’ve got laying around, it works out just fine. I don’t even know what would constitute a true “emergency” these days… although I also don’t want to find out!! Haha…
- We increased our “House Savings” account to $1,000! I know that probably sounds weird because I just told you we have over $40,000 in cash right now, but it’s all divided up into different areas. And before now, our House Savings account had $0.00 in it – not ideal in case we ever go over our House Budget. Now we have a cushion! Or really, a DOUBLE cushion because this $1k will come before ever dipping into our Emergency Fund again. It may sound complicated, but it works for us :)
- Lastly, we threw the remaining $400 against our new mortgage. Yeah – applying all $2,000 to it would have been the most prudent way to go factually speaking (we’re not going to get 5.5% interest on the money we’re saving instead of paying off debt), but we’re feeling completely SAFE now. It’s quite the savings fortress we’ve built up! And I’d gladly take that any day. I’m all about going w/ the emotions in cases like these…
What would you all have done? If you had an extra $2k to play with which extended your mortgage by an extra month? I think it was pretty divided the last time I asked you in that refinancing post – half said I should save it, and the other thought I should keep plowing away at the mortgage…
The good thing about our choices is that we can always change our minds and pay it off later! So you still have time to convince me if you’d like ;) And if you’re out celebrating Memorial Day instead, even better! Come find me when you’re nice and relaxed… Today was meant for reflecting :)
(Photo by A National Acrobat – Piggies sold at Target for like $10!)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!