Tweet
I've been working on a five-year plan. I'm really liking having a plan. Will write out what I've got so far and then ask for feedback on certain aspects of it, if you guys don't mind.
1). Pay off personal loan around Sept. 1, 2006. This will leave only student loan and mortgage.
2). From Sept-Jan 2007 save all excess money to fully fund the emergency fund. This should get us to around 5 months worth of expenses saved.
3). With yearly bonus put away for daughters college. (this year only, big bonus, daughter going to cheap school)
4). Fund Roth IRA's $600 monthly (this will add to our present 3% to equal 15% for retirement)
5). After Janurary 2007 start applying all excess cash to mortgage.
6). All bigger bills will be paid in full (ie. insurance premiums that come twice a year, house taxes, deductibles, etc.) The snowball for the mortgage should allow this to be no problem in a month's income. Want to apply all I can to mortgage instead of socking it away in a sinking fund every month and it sit there. It would also reduce monthly expenses (ie. paying insurance monthly now instead of bi-anually) Our house taxes are fairly cheap and can be covered in one month's snowball, as well.
7). Any Murphy strikes will be taken care of with the emergency fund, to be replaced with the next month's snowball.
8). After 2007, all yearly bonuses will be applied to the mortgage until it is paid off, then will apply snowball and bonuses to student loan.
9). Pay off student loan last. As someone pointed out, I can always claim deferrment or hardship should something serious happen. Plus, the amount of mortgage interest saved paying it first is way more than the student loan interest saved. Makes dollar sense to me.
In this scenario the house can be paid off by December 2009 and the student loan by the end of 2010.
Now my questions: is there anything wrong keeping the intensity to pay off the mortgage super fast? I mean, like holding off on starting a gajillion sinking funds til after the mortgage is gone. And like maybe holding off socking that $600 monthly to the Roth's for just two more years? I computed all of this in my loan amortization program I have and if we did this our home pay off date changes to 3/09 and student loan payoff to 10/09. Yes, yes, barring Murphy. That's having it all gone in 3 years. How much would I be able to start investing then? 2k a month or more.
So, anyone ever kept up the paying-off intensity? Anyone snowballed the mortgage to get it gone in a few short years??
1). Pay off personal loan around Sept. 1, 2006. This will leave only student loan and mortgage.
2). From Sept-Jan 2007 save all excess money to fully fund the emergency fund. This should get us to around 5 months worth of expenses saved.
3). With yearly bonus put away for daughters college. (this year only, big bonus, daughter going to cheap school)
4). Fund Roth IRA's $600 monthly (this will add to our present 3% to equal 15% for retirement)
5). After Janurary 2007 start applying all excess cash to mortgage.
6). All bigger bills will be paid in full (ie. insurance premiums that come twice a year, house taxes, deductibles, etc.) The snowball for the mortgage should allow this to be no problem in a month's income. Want to apply all I can to mortgage instead of socking it away in a sinking fund every month and it sit there. It would also reduce monthly expenses (ie. paying insurance monthly now instead of bi-anually) Our house taxes are fairly cheap and can be covered in one month's snowball, as well.
7). Any Murphy strikes will be taken care of with the emergency fund, to be replaced with the next month's snowball.
8). After 2007, all yearly bonuses will be applied to the mortgage until it is paid off, then will apply snowball and bonuses to student loan.
9). Pay off student loan last. As someone pointed out, I can always claim deferrment or hardship should something serious happen. Plus, the amount of mortgage interest saved paying it first is way more than the student loan interest saved. Makes dollar sense to me.
In this scenario the house can be paid off by December 2009 and the student loan by the end of 2010.
Now my questions: is there anything wrong keeping the intensity to pay off the mortgage super fast? I mean, like holding off on starting a gajillion sinking funds til after the mortgage is gone. And like maybe holding off socking that $600 monthly to the Roth's for just two more years? I computed all of this in my loan amortization program I have and if we did this our home pay off date changes to 3/09 and student loan payoff to 10/09. Yes, yes, barring Murphy. That's having it all gone in 3 years. How much would I be able to start investing then? 2k a month or more.
So, anyone ever kept up the paying-off intensity? Anyone snowballed the mortgage to get it gone in a few short years??
)
There's an added benefit in clearing your mortgage that you may not have considered.
Comment