Hi all,
My fiancé and I are looking to start paying off our sizable amount of debt at the end of this year (right now, all of our excess income is going towards our wedding).
Stats:
26 +28 years old.
Bought a single family home last year (30 yr mortgage which is not included in our current pay off plan)
Combined take-home pay monthly: 8600+
(He works a lot of overtime and his income can fluctuate based on that; the above number is based on his base salary)
Mortgage/PMI/Taxes/Insurance: 2250
Utilities: 550
TV/Internet/Phone: 165
Cell phone: 80
Gym: 100
Student loans: 625
Car loan: 240
His Insurance: 75
My insurance: 75
Car savings: 75
Food/Paper/Toiletries: 600
Dogs: 250
Entertainment/Gas/Spending/Misc: 1000 (500 each)
House Projects: 400
"Yearly expenses" : 100
Vacation: 500
Wedding : 1500
Some notes: Right now, we pay ~$150/month for electric; the other $400 in the utilities budget we either use to fill the oil tank, pay the quarterly water bill, or just transfer the rest to the house projects account.
*Car savings - since my car is paid off, I use this as a separate savings for any repairs that my car needs.
*Yearly expenses are things like professional licenses/education, car registration, gifts for weddings, random stuff.
Savings consists of:
Emergency fund: 11k (10k in an online account, 1k in our local bank savings)
House projects: 1k (had more, but doing some work on the house now and just removed around 4.5k)
Vacation: 2k (honeymoon coming up)
Car: 750
Yearly: 375
Pet: 1400 (unexpected vet bills - we don't contribute to this monthly)
And a wedding account which we are actively spending from as our wedding is less than 5 months away!
Loan balances:
Car - 7600 at 5%
Student loans:
1) 9800 at 7.9%
2) 23,000 at 3.25%
3) 26,000 at 3.25%
Retirement - he has a pension, and also an old 401k from a previous job that has roughly 25k.
I have a 401k from a previous job with 5k, and my current 403b with ~14k (I contribute 8%, employer match is 6).
The plan: Currently that $1500/month goes to our wedding savings. Starting in November 2016, that is unaccounted for. I'd like to:
1) Put the full $1500 towards student loan#1 (highest interest/lowest balance) and knock that out by April 2017. The $225/month we pay towards that loan would then be rolled into the remaining 2 loans so we still pay the same $625/month
2) Starting May 2017, then use the $1500 towards the car loan, should be paid off by August 2017. We would also still "use" the $240/month and just put it towards savings for repairs and eventually, new vehicles.
3) September, Oct, Nov, Dec 2017 - use the $1500 to start a "baby fund" - we'd like to start a family within the next few years, and I'd like a small savings to account for furnishing the nursery, hospital bills, etc.
4) - Then, January 2018 - split the $1500 by starting Roth IRAs for each of us ($500/month for each of us) and that still leaves $500/month left over. At that point, we could use the $500 towards the student loans, or continue to build an emergency fund...
Also - we are both paid bi-weekly, so in Dec 2016, and June 2017, we each get an "extra" paycheck - was planning to put each of those into our emergency fund. Theoretically, that would put us at about 19k total by the end of June 2017
My fiance is starting to feel like our retirement plan should be a bigger priority, but I feel that our debt is the bigger issue right now. It's not like we have nothing going on retirement-wise, and we do *eventually* have a plan to get to the Roth stuff, it's just a year and a half away.
What are your thoughts? Is there a smarter way to handle this? Should we be thinking more about retirement now or can it wait another 18 months?
Thanks for your input
My fiancé and I are looking to start paying off our sizable amount of debt at the end of this year (right now, all of our excess income is going towards our wedding).
Stats:
26 +28 years old.
Bought a single family home last year (30 yr mortgage which is not included in our current pay off plan)
Combined take-home pay monthly: 8600+
(He works a lot of overtime and his income can fluctuate based on that; the above number is based on his base salary)
Mortgage/PMI/Taxes/Insurance: 2250
Utilities: 550
TV/Internet/Phone: 165
Cell phone: 80
Gym: 100
Student loans: 625
Car loan: 240
His Insurance: 75
My insurance: 75
Car savings: 75
Food/Paper/Toiletries: 600
Dogs: 250
Entertainment/Gas/Spending/Misc: 1000 (500 each)
House Projects: 400
"Yearly expenses" : 100
Vacation: 500
Wedding : 1500
Some notes: Right now, we pay ~$150/month for electric; the other $400 in the utilities budget we either use to fill the oil tank, pay the quarterly water bill, or just transfer the rest to the house projects account.
*Car savings - since my car is paid off, I use this as a separate savings for any repairs that my car needs.
*Yearly expenses are things like professional licenses/education, car registration, gifts for weddings, random stuff.
Savings consists of:
Emergency fund: 11k (10k in an online account, 1k in our local bank savings)
House projects: 1k (had more, but doing some work on the house now and just removed around 4.5k)
Vacation: 2k (honeymoon coming up)
Car: 750
Yearly: 375
Pet: 1400 (unexpected vet bills - we don't contribute to this monthly)
And a wedding account which we are actively spending from as our wedding is less than 5 months away!
Loan balances:
Car - 7600 at 5%
Student loans:
1) 9800 at 7.9%
2) 23,000 at 3.25%
3) 26,000 at 3.25%
Retirement - he has a pension, and also an old 401k from a previous job that has roughly 25k.
I have a 401k from a previous job with 5k, and my current 403b with ~14k (I contribute 8%, employer match is 6).
The plan: Currently that $1500/month goes to our wedding savings. Starting in November 2016, that is unaccounted for. I'd like to:
1) Put the full $1500 towards student loan#1 (highest interest/lowest balance) and knock that out by April 2017. The $225/month we pay towards that loan would then be rolled into the remaining 2 loans so we still pay the same $625/month
2) Starting May 2017, then use the $1500 towards the car loan, should be paid off by August 2017. We would also still "use" the $240/month and just put it towards savings for repairs and eventually, new vehicles.
3) September, Oct, Nov, Dec 2017 - use the $1500 to start a "baby fund" - we'd like to start a family within the next few years, and I'd like a small savings to account for furnishing the nursery, hospital bills, etc.
4) - Then, January 2018 - split the $1500 by starting Roth IRAs for each of us ($500/month for each of us) and that still leaves $500/month left over. At that point, we could use the $500 towards the student loans, or continue to build an emergency fund...
Also - we are both paid bi-weekly, so in Dec 2016, and June 2017, we each get an "extra" paycheck - was planning to put each of those into our emergency fund. Theoretically, that would put us at about 19k total by the end of June 2017
My fiance is starting to feel like our retirement plan should be a bigger priority, but I feel that our debt is the bigger issue right now. It's not like we have nothing going on retirement-wise, and we do *eventually* have a plan to get to the Roth stuff, it's just a year and a half away.
What are your thoughts? Is there a smarter way to handle this? Should we be thinking more about retirement now or can it wait another 18 months?
Thanks for your input

Comment