It's hard to start off a first post, so I am just going to cut to the chase. It is the middle of March 2008, and we are out of college both working full time for the first month. We have a set of goals we would like to achieve: have an emergency fund, pay off loans, save for an early retirement, save for a down payment on a home. To reach these goals we have decided to "tax" ourselves monthly, paying towards the goals the same way you would pay off a car loan or any other regular monthly expense. This blog is a way for us to keep track of how well we are doing with our budget, make sure we are on track paying off goals, and to learn as much as we can from other PF bloggers and their experiences.
Here are our main goals for 2008:
- Set up an emergency fund of six months expenses: ~$10,000
- We had been doing well with an emergency fund, saving up close to $8,000 and then there was an emergency. In February Ry's car died and needed to be replaced so he could get to work. We decided that we did not want to start out with a car loan, so we bought a used car and paid cash. The car has been great so far, but paying for it wiped out the emergency fund. We are doing everything we can to replenish the fund as quickly as possible; after all, you never know when an emergency will strike..
- Pay off high interest student loans: $27,443.88
- After completing college we (unfortunately) have a lot of loans to pay off. Half of them have a very low interest rate, while the other half have a nasty adjustable high interest rate. Those must be destroyed as soon as possible.
- Save for a down payment on a home: $20,000 - $40,000
- Right now we rent an apartment, and are very happy here. However, we would like to start a family and move into a house of our own sometime before we are both 30. This leaves just about seven years to save for a 20% down payment.
- Save for retirement by age 65: numbers being calculated
- We are in the process of calculating how much we would need in total saved dollars to retire at age 65. This total will be broken down into monthly payments required to achieve the goal
We also have longer term goals to start saving for after the four primary ones are taken care of. These are not as urgent, and we will start attacking them as soon as the other four have been completed.
- Pay off the rest of the student loans: 42,746.23
- These loans have a low fixed interest rate, so while they must also be destroyed there isn't the same urgency as there is for the other loan
- Save for retirement by age 50 - 55: numbers being calculated
- Why retire at 65 when you could retire ten years earlier? At age 55 hopefully we will have many more years of health left to enjoy life. After calculating how much of a monthly payment we need to retire at 65 we will do the same thing for age 55, and even age 50
Progress towards these goals will be updated regularly along with our total networth. It's going to be tough, but I am not worried. As Jim Rohn says: Don't wish it were easier, wish you were better.
