Baby Steps out of Order?

[Allsmiles]

Alright, what do you guys think about taking the baby steps out of order? We are currently on Baby Step 2, and have paid off $43,000 in 15 months. My husband is a full-time Physical Therapist and also has a part-time job as a Rehabilitation Coordinator for a Home Health Company. He loves his work, which makes the part-time job bearable. He typically does about half of the part-time work at home (what a blessing). I am a substitute teacher/stay at home mom. I work about 4-6 days a month (we shoot for 6 when we can), my parents watch my son for free! (Another blessing). I will be doing a long-term substituting position from March-May for 6-9 weeks.

When my little guy goes to school full time in August of 2009, then we will really be busting it. We hope to have our debt paid off by Christmas of 2010 (if not earlier).

My question: It would only take us another 2 years at that payment rate to get the mortgage paid off. I know that Dave wants us to go in order, but I am afraid of losing steam and not ever paying off the house. And, once we pay off the house, we have NO payments! Then, we can really go nuts on retirement and on the kids' college funds. By this time, the kiddos will be 10 and 8. SO, we would still have 8 and 10 years (respectively) to save for college. There would be no problem saving for college for them in that amount of time, especially with no payments.

We are sort of cheating, in that we are still investing in my husband's 401K too... If we put in 3%, they match with a 5.5%! SO, that's 8.5% in all. Not only would that be hard to give up, but we couldn't see stopping our investing when it will take us this long to get out of Baby Step 2.

Thoughts? Suggestions? I know I may be overthinking this while we are still in Baby Step 2, but I would love to mentally prepare myself as we go if I can!

Allsmiles

[Amy Bass]

Allsmiles,
If it were ME... i would pay off the debt in baby step 2. Throw my emergency fund together and then attack the mortgage. In my opinion, I would rather have a paid off house than get a head start on retirement and kid's college. I am not doing baby step 5 anyway, but that is just me. ;)

[Frugal Dad]

I would be tempted to continue that match, too, particularly if it was going to take another 4 years from today to pay off your mortgage. There are a lot of retirees with paid for houses and no money in retirement. I think you would do better to continue saving for retirement, put a little extra on the mortgage and still plan to pay it off early, but not at the expense of your retirement funds.

[sunshine]

I would continue with the retirement savings also. We have always contributed to our retirement accounts...no matter what. This money adds up over time with compounding interest plus you're getting a match which should be taken advantage of!

[KillerKelle]

I cannot find a 'good' list of the steps. Where are they? With a little expanation would be good. This site is a great idea, but is faltering for some reason.