How far out do you plan?

[mrpaseo]

I understand there are different levels of financial stability; we're all at different stages in our life. Even though, most financial plans have you plan out at least a year or two.

My question goes out to all levels, for those of you in debt, how far are you currently planning out your finances? At this stage I suspect you have planned out until you are out of debt. Most people in debt do not plan beyond getting them out of debt.

The second level is those of us that are our of debt and currently trying to build our portfolio. How far ahead do you plan? I suspect most people at this level will have a plan until they meet their next goal, which to me is the amount we want to retire with.

The third level is those of us that are approaching retirement or financially stable with a net worth close to that what which we want to retire with. Meaning, if your goal is to have $800,000 before you enter retirement, and you are within 10% of that range or over your mark.

I explained the levels so each of you could relate to the question. Please feel free to input any opinions on your situation or all levels.

See my answer in the next post.
Ray

[jessstewart2008]

Ive planned through Feb. 1st 2009

That pays off 3 of 7 credit cards and puts 2500$ in our EF.

-Jess

[mrpaseo]

Though I often teach level one, I am currently in level two. When I teach level one to my Soldiers I usually set them on a plan to get them out of debt and explain what awaits them in level two and three. This gives them the motivation to get through level one…to become debt free.


In level two, I am currently managing all income out until April 2012. Previous to my currently plan, I maintained 18 months of budget to keep my wife and I on the same sheet of music when I was deployed. This plan is flexible though tight, almost in stone. Very little changes happen at this point without some heavy research. This plan is tracked closely on excel.

My second plan is a bit more loose, kind of a general outline to keep me focused on my life phase two goals of which will set me up for life phase three. This plan goes out until 2023 (Age 50). This plan is not written down anywhere. EDITED TO ADD: This plan includes paying the house in full and building our portfolios.


Life Phase three plan is very flexible in that some of the goals have not been established save some generalizations. We know we want to travel but we do not know where, we know we want our house paid in full but we do not know how much and where we will live at that time. Our plans are general but important. Our current phase one and phase two plans will set us up for phase three. As we approach phase three the plans will become more solid and we will have the assets to accomplish our goals.

Ray

[maat55]

We are at level two. I don't really have a plan other than to put as much money into investments as possible. My retirement date is dependent on many variables such as: Market performance, value of real estate holdings and financial climate at that time. My one consistant goal is 1m at 66.

[MonkeyMama]

My next goal is pretty much retirement. Well, and to pay off the mortgage. (To do, before we retire I guess - you can argue as part of the retirement plan. Or it's just one nasty debt to be paid off - however you look at it).

Though we have never taken on any consumer debt, I feel in my 20s we were just focused on a lot of other things so we were more in a kind of level 1 regardless. We really focused on putting a large down payment on a house and being financially ready to take a large pay cut when we had kids, etc.

I feel like we have been shifting more to level 2 lately. We really don't have any big intermediate goals. Hang on, hope my job hangs on, and continue to avoid further debt, etc. But the next step for us is retirement. So that is mostly what we are focusing on as far as financial goals.

Yeah, just planning up until retirement at this point - too many variables to plan much beyond that. I think I may be able to retire sometime between age 50 and 70. Ask me again in a decade.

[jIM_Ohio]

My plan extends to the day I die. Part of my plan is how to get thru new year (need to reduce AGI by 3k between now and years end) for tax reasons. I have a 2009 plan as well to get some health care savings funded more.

I have some mid term goals to get money in bank, to increase investment amounts and to manage taxes.

I have a long term goal to retire in 18 years. I have an even longer goal to grow my money once retired.

Much of advice I give is to allocated 20% of gross pay to financial indepenance- meaning debt repayment, retirement investment and short term savings all included within the one save 20% statement.

[pearlieq]

Originally Posted by jIM_Ohio

My plan extends to the day I die.

Me too. I have intermediate goals, of course, but I've planned through our entire lives. There are variables, of course, but the general framework of the plan is set and just needs to be adapted to whatever life throws at us.

[gekkoplus]

I took a debt to build my portfolio. So essentially when I will be out of debt, I will also have a nice portfolio. That puts me somewhere in the middle of stage one and two.

[LivingAlmostLarge]

Short and long term. Right now without children it's too hard to plan midterm. I find it hard to determine what we might need soon.

I can save for this year, next year, and 30 years. But 5 - 10 years? Ugh. It's hard.

[rooskers]

My wife and I are currently debt free except for the house. My planning consists I would guess a little of everything.

0-5 years: We try to be pretty exact when I plan things for this close in the future. Whether that be to reach our goal in my EF (we have met it) or if it is saving for a car, TV, vacation. We discuss things we want and then set aside the amount it will take.

10-20 years: We have set definite midterm goals such as putting aside for our daughters college education. We also try to invest money in some non-retirement accounts for future things we have not even thought of yet. This is not exact but is fairly consistent like knowing we will put $2000 every year into the college fund and saving at least $100 each paycheck for investing.

20+ years: These are just goals we set for ourselves and will likely be adjusted as we learn more about what we want in our lives. It is not exact because we aren't even sure what we will need and want. That being said we max out our 403B's and contribute to roth IRA's. We also monitor wifes cash balance plan and anything else the company contibutes. We have very rough estimates but this could all change depending on how much we earn and other factors. We set goals and try to adapt when they need changing.

[chai]

in my early age... i have a typical planning.. since i'm newly grad. and got an enough salary for my self..i'm start planning in a small things first.. i'm learning how to budget my salary.. i prioritize first what are the things that need to buy first, 2nd the personal things that is needed.. 3rdas long as i can try to save for my saving account...

then when my savings got huge.. that's what i plan for houses, cars, and for my retirement..

[kork13]

I'll echo a couple people here... Like Chai, I'm young, just grad from college, and am only just beginning to be able to plan for the coming years. Like Gekko, I took out a fairly large loan ($30k @ 1%) primarily for investment purposes, and in 5 years I will have no debt plus a healthy set of savings and investments.

As for planning itself, I'm starting into a career that will have me doing the whole "pick up and move" thing every 2-4 years, and I can only guess at where I'll be next. So at least for now, until I get more familiar with it all, that's sort of the limit to my planning. Right now I'm able to look confidently ahead about 2 years, maybe into 3 years. But beyond that (excepting that I'm saving for retirement), I really can't say that I'm planning out very far right now. I'm currently in debt, but it is very controlled and just a matter of time before being paid off--THAT plan, at least, is set in stone already.

Goals for alot of things in my future (house, for example), but few plans right now. I'm a dedicated budgeter, so that helps. In summary, I'm not in a great place planning-wise, but by no means in a bad one.

[feh]

Our next goal is retirement. We have no debt. Just trying to grow our portfolio as much as possible to make retirement a possibility. Hopefully in 10 years.

[GREENBACK]

I'm level two. About 2023 or sooner depending on outside factors. Don't plan to work past my 50's is the real goal

[zetta]

I'm in level two -- no debt, building a portfolio. I'm married, 37 years old, and have a 3 year old son.

I use YNAB software to budget and track spending each month. The budget really covers a year's spending because I contribute a portion each month toward catagories that happen only once or twice a year such as property taxes, vacation, Christmas presents, etc.

I have long-term plans for college and retirement, and have a spreadsheet to estimate how much to put in and how the money will grow at various rates of return. The 401k contributions are not tracked in the budget. The goal is to pay for my son's education in full, and to retire when he is in college or shortly thereafter (say between 55 and 65.)

I don't plan out the midterm -- too many variables such as whether we will be able to have another child, when will I switch from part-time to full-time work, will we choose public or private elementary school, will we move to a better school district, and will we replace the cars after 5 years or hold on to them for 10-15? I'll probably do an overall assessment of finances while making each of these decisions.