The 5-year plan
December 31st, 2008 at 10:33 pmI know it's weird but I figured what the heck, I don't go back to work until Monday and I enjoyed doing it. The plan assumes a few things:
1) That I don't lose my job (natch)
2) That I get annual raises of at least 3% all of which will be rolled into my 401K
3) That my Jeep lasts.
So here goes:
Current
Debt:
Home Equity Loan: $35, 137
Student Loan: $9840
Credit Card: $5922
Assets:
401K: $3515
Savings Account: $1828
Roth IRA: $1520
Currently making no contributions to either EF or savings account.
2009:
March: pay off credit card
March: increase deposits to emergency fund
July: resume contributions to 401K to get company match
2010:
July: complete 1 year emergency fund. Balance: $30,000
July: begin accelerated payoff of student loan. Balance: $9300
December: pay off student loan
2011:
January: begin accelerated payoff of home equity loan. Balance: $32,000
August: daughter begins college. Projected annual costs: $20,000. My share: $7500 per year. Keeping fingers crossed she gets scholarships.
2012:
February: pay off home equity loan
February: put aside money to pay my share of daughter's college costs for 2011-2012, 2012-2013. Needed: $15,000
August: complete savings for daughter's college costs
September: resume contributions to Roth IRA
September: resume contributions to emergency fund
December: max out Roth IRA for year
2013:
January: continue contributions to Roth IRA to max out this year
January: increase contributions to 401(K) to max $15,500 for the year
January: put aside money to pay daughter's college costs for 2013-2014
January: start saving for son's college fund
January: contribute excess monies to emergency fund. projected: $6000
The great thing is that by accelerating my debt payoff I'll be able to put aside between $25,000 and $30,000 per year with no decrease in my standard of living. Woo-hoo!