We are planning to purchase a home next year (probably toward the end, since our lease is at the end of the year) and want to pay off the mortgage under 10 years, ideally 7-8 years.
We are a two income family with a 4 year old and another baby coming next February. Here's how we distribute our income now:
wife (35 yrs old): 20% to 401k and all take home pay goes to savings
husband (38 yrs old): 10% to 401k and all take home pay to cover all expenses, we don't have any debts.
plan to pay of mortgage early:
wife: 10% to 401k, 3k/year to college fund, then all take home pay to go toward mortgage principle
husband: 10% to 40k and all paychecks to cover all expenses and monthly mortgage payment
after down payment, we'll have an emergency fund that'll cover 1 year of expenses. Is 1 year enough? Most suggest 3-6 months, but nowadays, it seems to take a long time to find a job.
we are also planning to replace two cars (one has 150k miles and the other has 110k miles) in the next few years, that's the reason for going from 7-8 years to 10 years.
Is this too aggressive? I feel like I might be missing something or maybe it's because I am used to save one of our incomes and feeling a little unease for spending all money.
Read more: Is this a good plan to pay off mortgage early?
