Have you been in a situation where you earned extra income and needed to decide what to do with it? This isn’t a regular occurrence, but given our recent move to Calgary for my husband’s work, we’ve found ourselves in this unique and fortunate spot. Even though I quit one of my three jobs for this 7-month field assignment, the benefits still outweigh losing my income.
My husband got a pay increase for this assignment and is being compensated for a 50-hour work week compared to his usual 40-hour week back home. In addition, the company leased us a car, takes care of our housing, and we receive a daily per diem to accommodate the higher cost of living. We were especially grateful to find friends who wanted to rent out our condo while we are gone. Our monthly expenses are simply groceries, entertainment, gas, and our phone bill (slightly higher with an international plan). Even though I’m not making much from working at Starbucks, we are still in a position where our income is greater than our expenses. So what will we do with the extra?
Double mortgage payments
I’ve seen many arguments regarding the decision to pay off a mortgage ASAP or not. In our situation, we had planned to have a 20% down payment for our home but due to various reasons, we ended up closing before we reached the full 20%. I hate throwing away money to interest; that’s why we worked hard to pay off $30,000 from student loans in 9 months. Our plan is to make our usual mortgage payment and add to that our renters’ monthly payment. Any extra income from my job and additional savings will likely go toward the premium as well. It should take about 7-8 months to reach the 20% mark and drop the PMI… just in time for us to come back home!
If the extra income continued, we would consider additional investing after we dropped our PMI. We don’t sound like an exciting couple by putting all our extra money toward a mortgage and not a sweet vacation. However, we are intentional to plan for fun! My husband and I are both savers, not spenders, so ever since we got married 3 years ago we’ve made sure to devote a monthly chunk of income into entertainment and vacation savings. Life wouldn’t be too exciting if we were debt free and bored! I can’t complain that we won’t have extra money to continue putting toward the mortgage or investing; these extra 7 months will save us a lot of interest in the long run.
What would you do if you had extra monthly income?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.