Faithful readers of Northern Cheapskate know that we recently refinanced our home.
The move will save us $200 a month and tens of thousands of dollars in interest over the course of our loan. Our mortgage is currently the only debt we have.
So what are we going to do with an extra $200 a month? So far, we haven’t done anything except save it. But here are some of the things we’re considering:
1) Just let our budget absorb the extra money. Everything has gotten more expensive. Pay raises have been eaten up increasing health care costs, and our kids are growing fast.
2) Save it. Put the money into our savings and let it sit there. This is probably the most conservative, safest option.
3) Invest in a Roth IRA. We would be able to draw the money out tax free when we retire. We already have traditional IRAs, and we think it could be a good time to put money into the markets. Of course, we could also lose our money in the market, too.
4) Use the money to pay down our mortgage. The idea of paying off our mortgage early is greatly appealing. We’d get a guaranteed return on our money, but it would be tied up in our house, and would not be available if we needed it for something.
5) Some combination of the above options.
It’s hard to decide what to do with the money, since it’s not a lot of money, but it’s not chump change either.
What are your thougts? What would you do with an extra $200 a month?