For three months after the payoff, $893 just sat in checking every month like a houseguest nobody had shown to a room. April, May, June. I'd open the banking app and see the balance a little higher than it should be and feel vaguely uneasy, the way you do when you find a twenty in a coat pocket and know you'll spend it on nothing.
We made our last mortgage payment in March. This month Greg and I finally gave that money a job.
What happened to the first three months
Let me account for April through June first, since some of it got spent before we had a plan. Three months of $893 is $2,679.
Josh graduated from UC in late April, and we took both kids, Nate and my mother out to dinner in Cincinnati afterward. That was $286 and worth every cent. Josh started his new job in Indianapolis this month, and we covered his first month of renter's insurance and a mattress, another $410.
Then the hail. A storm came through in early June and dented the gutters and knocked granules off the shingles on the west side. The insurance adjuster found minor damage and the claim paid for partial repairs minus our $1,000 deductible. That deductible came out of the pile.
That left about $983 still in checking, which we moved to savings this week to start clean.
How we're splitting it
Starting with the June payday, the $893 leaves checking automatically the day after Greg's first paycheck each month, the same day the mortgage used to go. Here's the split:
- $500 to our savings account. Of that, $300 is labeled "roof" and $200 is general savings.
- $393 to Greg's Roth IRA, the one he opened in 2019 and barely added to since.
The separate $395 a month that used to be escrow is still going to our "house bills" account for property taxes and insurance. I explained that in my payoff post. That account is doing exactly what it should; the summer property tax half will come out of it next month.
Why the roof gets its own line
Our roof went on in 2004. In April we had it inspected and got three quotes for a full replacement, from $11,800 to $14,500. The inspector said it had one to two years left, maybe a little more with luck. The hail claim fixed the worst spots on the west side but did not cover a new roof, which I understand. The roof is old. That's not the insurer's problem.
So the roof is coming, and we'd rather pay cash than finance it. We already had about $5,000 in savings set aside in our heads for it. With $300 a month added, by mid-2028 we'll have a little over $12,000, which covers the low end of the quotes. If the roof needs to happen sooner, we'll dip into general savings to cover the rest. If it holds longer, the fund keeps growing.
Why Greg's IRA and not his 401(k)
We raised Greg's 401(k) contribution in December, from 8% to 16% of his pay. We talked about pushing it higher, but nearly everything we have for retirement is pre-tax. Greg's 401(k) and my 457 will both be taxed when they come out. The pension will be taxed too.
A Roth IRA works the other way. The money goes in after tax, and if you follow the rules, it comes out tax-free later. Having one bucket like that gives us some choice down the road about which account to pull from in a given year. Greg is 58, so he's allowed a little extra in an IRA each year because he's over 50, and $393 a month, about $4,700 a year, is under the limit.
Patti Henderson next door, who's retired and has done all this already, said she wished they'd had more in a Roth when they started drawing down. That's one person's experience, not a rule. I'm not a financial planner, and whether a Roth or traditional account makes sense depends on your taxes now and later. We asked the retirement counselor through Greg's work before we set it up, and I'd suggest anyone weighing this do the same.
What we didn't do
We didn't spend it. That sounds obvious, but it was close. In May there was a weekend when a new grill seemed very reasonable. Our old grill still works, and it's still on the patio.
We also didn't send all $893 to one place. A year ago I would have put every dollar into the roof fund and called it a day. Splitting it means the roof grows a little slower, but Greg's retirement doesn't wait on the roof, and our general savings slowly refills after the water heater, the hail and Josh's graduation.
Biscuit had no comment. He was asleep on the warm laptop, which is his position on most financial decisions.
