Im essentially at #3. The problem is ive been stuck here since February when i paid off the last $3k of my car. Im finding it hard to get that 3-6mo saved up.
Maybe i need more discipline (im sure a lot of us do)…but does it make sense to put off accelerated mortgage payments for a year* while i save up my 3-6mo of wages?
The first thing to do, right now, is create a budget and stick to it. Eliminate absolutely every single unnecessary expense. Stop eating out, or limit it to a few times/month. There’s no need to go out drinking, or spend money on unnecessary travel. If you really want to get there, you may need to tighten the reins even further, which means “living like no one else now so you can live like no one else later.” When I did this, it was like having no life and being a homebody more than I was used to, but it paid off. I even got rid of the extended cable package and disconnected the home phone line. I wasn’t up to my eyeballs in debt, I simply wanted to discipline myself to save more, so I did budget money for one meal/week (dining out) and up to $15/week on a bar tab as recreation expenses, but that was all. I was no longer dropping $50+ on a night at the bar, or spending $150/week eating out. I reduced my cell phone plan to a simple “pay as you go” network, etc.
It’s your call on the emergency fund debacle. As someone else posted, it’s a trade off between paying down the mortgage, or taking a risk, as a homeowner, by having too small of an emergency fund. If the furnace goes out or some other $2,000+ emergency comes up, you’ll be stuck having to borrow money again to cover it. There’s certainly nothing wrong with adding a few thousand to the emergency fund, then hammering away at the mortgage thereafter if you want to be safe, but I’d make sure every bit of financial fat is trimmed from my monthly financial expenditures first.
I tend to live fairly frugally, I believe. Everyday I bring a lunch to work, My GF cooks our lunches and I pay for 2/3 of the cost. It’s a wiin-win, she eats $2 lunches, and I eat $4 lunches with plenty of protein in them. I don’t go out to drink, I spend maybe $30/mo on booze at home, and we only eat out once or twice a mo.
Where I fall off is buying tools and materials so that I can do jobs/repairs/stuff at home, that and I am slowly working on adding a bathroom. I always justify these costs. I recently spent about $800 on my cars body, which I also justify as needed. If I need to fix it, I should buy it right? Maybe I just need to deduct those costs from the amount I spend on frivolous shit, instead of throwing it on top.
I figure, most months I can save about $500-$1000.
I think I may throw $1300 at the house before the end of the year, that will take it down 1%, and I will still have money for a good furnace/installation, plus a small left-over cushion.