We had a pretty serious money talk last night.
As mentioned on a previous post, D and I came together each with separate assets and finance structures. He sold his home, moved into what was my home and 1 1/2 yrs later, we bought what is currently our home.
From the sale of my home, I paid for half of our house right away. D has been paying off the remainder of the mortgage since then. Similar idea for the ski condo. Current amortization: 9 yrs 4 months.
Inspired by other bloggers like Death to the Mortgage, I drew up a new payment plan which involves me paying a good chunk of the yearly allowable prepayment to the mortgages so that we will be able to clear both in 5 years time.
The fly in the ointment...
D wants me to back off and respect the original agreement. If I do that, I will have a lot of money left over each month to put into savings, be able to cut out my Fridays sooner and retire sooner.
Because I am in the "common pot" frame of mine, I don't feel it is right but he feels I'm being pushy about it and that I've done my part, now let him do his. He has no grand plans for early retirement like I do and would like to retire by 55 but is OK with working til he is 60.
What would you do? I would like to see us mortgage free in 5 years, even if it may mean sacrificing 5 years of big savings.
It sounds like this is an issue of pride for him. I respect that he wants to pay "his half",but, like you, I am of the "common pot frame of mind" as well.
ReplyDeleteIf it were me, I would be respectful of the original agreement (though I know how painful it is to incur interest when you know you have a plan that could avoid it).
Save up as much as you can and focus on your goals. Perhaps in a couple of years he will change his mind and re-evaluate his goals, at which point he may be more open to re-jigging the plan.
Since the two of you are in this together, in the long run it would be beneficial to pay off the mortgage ASAP and bank (or mattress) the savings on interest.
ReplyDeleteOnce the place is paid off you will need to maintain the discipline to pay, into your savings, the amount that you have been paying to the mortgage holder every month.
Early retirement is a wonderful goal! Any idea how to cover health insurance/costs when there are two plus a toddler?
That is our conundrum since we live in the US.
Cheers!
-Mammoth
I say respect his feelings, like MM said it may be a pride issue for him. Then faithfully save and invest that money you were planning to use towards the mortgage, you'll both enjoy that money later.
ReplyDeleteDifficult one. We both came in with nothing (so that was easy) but now i earn a lot more. If everything had to be costed 50/50 then we wouldn't get very far but on the other I would be loaded!Common pot gets my vote for efficient use of household income. I dont like the idea of paying interest that I dont need to be paying.Hope you find a middle way!
ReplyDeleteHi Middle Way,
ReplyDeleteMoney issues are always tough in a marriage, and I'm glad I don't have to deal with these as a single.
My take is to keep to the original agreement unless both agree to amend it. He wants to do his part? Great! Much better than a man who doesn't pull his weight in the relationship. Just sit back and be thankful that you have a partner who is truly an equal not just emotionally but financially.
You can save faster, and get your freedom sooner. Then once your own dreams are achieved and you have no more use for more money, maybe he will let you help with his side of the deal. All in good time.
Hope you resolve this with yourself soon!
Thank you all for your comments!
ReplyDeleteI will post an update next week. Negotiations are almost complete, I'm happy to say. I was worried this would lead to arbitration... :)
@ Mammoth: The health care system in Canada is very different from the US. We are under a "universal" system so there isn't the fee per item out of pocket charges. It makes a huge difference for budget planning. Once D retires, we may need to look for a private health care plan which aren't cheap. Good luck with it!
How about a compromise.
ReplyDeleteYou keep saving money. Once you have enough to pay off the remaining mortgage, suggest that he let you pay for it, but that he puts that same payment away into savings instead of to the mortgage company.
That way, he'll still be paying the mortgage for the remaining 4-5 years, and you'll both save on interest.
I do agree that it is most likely a pride issue, although my wife and I agree on the principle that it is a "common pot".
Chris-- that's an awesome idea! I am going to take a look at my spreadsheet (now that I've changed it all around...some of the money is put away in places I cannot access) to see how to incorporate your idea. Thank you so much!!!
ReplyDelete