My husband and I have no debt, mid 30s, and own a townhouse outright, thanks to an inheritance. We spend very little, but make very little. I would classify our lifestyle as naturally pretty modest, but not strictly budgeted either. My husband is about to graduate in a degree that should hopefully make him a minimum of 65k at entry level, but could probably make him near 100k within a few years. We have 2 small children that I stay at home with, and about 50k in leftover savings from the initial inheritance that is invested.
We've had a lot of luck in our finances and our financial dispositions matching up, and we're really grateful for that.
All that said, I'd like to take more initiative in how we plan put the next few years of our lives financially.
We want to purchase a house closer to family with room for children to play. We also have little to no experience with 401ks, Roths, or IRAs. Investing has pretty much consisted of just putting stuff into Fidelity and ignoring it. But we specifically have zero retirement funds. We're not familiar with all that comes with a fully functioning job, to be honest.
My thoughts for a long time were that we would sell the house we're in and buy something a little bit bigger using the money from the sales and our 50k savings to have the house outright, in as much as that is possible. We like the idea of having little to no debt. This would leave us to invest and save as much as we can from my husband's salary pretty much immediately. But the more I read and the longer I think about that, the more I feel I don't understand the potential long-term financial effects of all our money going straight into a house.
For reference, we're planning on a third kid, and are really trying to look at our finances as more of an extension of their future. We're also already planning on maxing our IRAs and HSAs as soon as we have a solid income.
Is there a better way to utilize the money from the house long-term? I know some people advocate for NOT paying off a mortgage outright and investing/buying another house with the rest of the money, but with interest rates what they are, and us edging towards our 40s, that doesn't seem terribly prudent.
The more I research, the less knowledgeable I feel. I think we've been relying on financial instinct/family culture, but would like to become more intentional about how we go about this, and we'd appreciate any help or insight here.
original posted by SignificantEnd3136 to r/personalfinance on Mon, 11 Mar 2024 15:44:48 GMT.