Great comments and thoughts! I replied to Crystal’s, but you and I think alike:).

No worries on double posting–it’s true, I think there are two different crowds that read my blogs, so that is great you will get different perspectives. I think Aurora has a great comment in that you should think about the things that you want in order to prioritize your money. Paul and I also are big into being debt-free (besides the mortgage, which we will be working on after the last of our car loan and the last our student loan!). To me, it just will feel freeing to be debt-free. Also, if something should happen to one of us, or if we have kids, then we would be able to go down to a one paycheck household without much hurt. If you want to take mini-retirements, which are talked about in the book on my right hand side bar the 4-Hour Workweek, I think that is another way I would use extra cash flow. For example, work for a few years, then take off a year to do anything you’d like, then work for a few years, and take off for six months, etc. That way, you can enjoy free time while still young. Ofcourse, you need to have a job that will allow sabbaticals (which a teacher’s position may, and I know at our office we can take a six month leave of absence without pay). In order to do this, you would need to save up extra money for your living expenses and loss of paycheck for the months/year that you will be taking off.

Also, I read a great blog called Get Rich Slowly, and he has an article called What Next? (http://www.getrichslowly.org/blog/2009/02/06/what-next-the-third-stage-of-personal-finance/) , which discusses what to do after you are out of debt, maxing out your retirement, etc.

I hope these thoughts get you started thinking, and also that more readers give you their thoughts!

No matter what, we will be completely debt free in 8 years or less…maybe we will use half for paying down debt and half for retirement. Thanks again for your suggestions!

Here’s my question now. What if you do/have all the above and still have surplus? For example…

My husband and I are 26 and live in Houston, TX. He is a middle school teacher ($43000) and I am an office worker ($35000), so we do make about $78,000 a year combined before taxes. As of now, we do not have any plans to have kids…being a middle school teacher or a wife of one makes you a true believer of birth control.

We bought our home as a foreclosure 2 1/2 years ago and put 20% down on a 15 year loan at 5.375%. Since I overpay the mortgage, we have about $76,000 and 6-7 years left.

We have one car loan at 4.1% and have about $12000 and 3 years left. My car is paid off and is only 4 years old with 37,000 miles. I will drive it until it won’t drive anymore.

We have no other debt. We do use credit cards for almost everything (I love my Discover), but we use them for the rewards and to budget. They get paid off every month.

We have an emergency fund that should be able to supplement us for a full year if only one of us was unemployed or 4-6 months if we both lose our jobs at the same time.

For retirement, we put 6% to my 401k which is matched at 6% (12% total to a Vanguard Target Fund). We also contribute to my husband’s state pension, I’ve been contributing the maximum $5000 to my Roth IRA for the last two years (Fidelity Target Fund), and my husband invests about $2500 a year in the stock market.

And my husband is currently getting a masters, which we have been paying for 100%…but he is set to graduate next year.

So, when we have some extra money starting when my husband graduates (about $1000 a month), what should we do to maximize its effectiveness? Do we get another Roth IRA, increase my 401k, put more in stocks, pay off the car, or put it towards the house? Or do that in some combination? What is your suggestion? Other readers, what would you do?

We are a little stumped ourselves simply because we will have options…which hasn’t happened before since we had this sort of financial checklist that doesn’t leave anything at the end of the month.

And before anybody berrates me for not having any fun, we do have a vacation/fun money account that funds our annual big trip, little weekend outings, and any large “fun” expenses as well. We also have a small “allowance” each month for whatever we want, so we aren’t just wasting the next 25 years of our life waiting for retirement…we just have alot of cheap fun (board gaming with friends, potluck parties, etc).

I also posted this on Amanda’s Houston Chronicle page since it seems different people read at different sites. I apologize in advance if this seems repetitive. Amanda, please feel free to remove this if you rather not have it on both pages. Thanks!