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5 Year Financial Plan
1. Pay off all debt.
A. Mastercard – Largest Balance – Highest APR - 14% ($2,500) (just made a payment today so this is the new balance with payment)
B. CarCare One- Smallest Balance – 0% until 11/21/2014 ($725)
C. Raymour & Flanagian – Decent Balance – 0% until 01/2017 ($2,400)
- Use overtime and extra money towards debt payoff
- Focus on bringing Mastercard down, but throw some extra at CarCare One.
- Focus completely on CarCare One from September to November (until paid off)
- Tax return and October 31 check goes towards debt
2. Build Regular Savings.
- Start with building towards a standing balance of $500 until debt is paid off. (Currently have almost $150 in savings)
- Automatic monthly transfer of $25 is considered for $25.
- Minimum deposit of $50 a month while in debt pay off.
3. Build Emergency Fund.
- Work on in stages, 1 month, 3 month, 6 month of expenses
- Open new savings account once at $500 in Emergency Fund savings
- Transfer Emergency Fund into new account and continue to build
4. Start Savings for Retirement.
- Can start on this goal once 3 month of expenses in emergency fund.
5. Save for new apartment.
- Can start this goal once #4 has been started.
- Looking to save about $2,000 in moving expense fund.
6. New Truck Fund.
- Start doing 52 week challenge to build new vehicle fund
- Looking to save about $5,000 for down payment.
I a
Re: 5 Year Financial Plan
I would change up the order a bit though. I would set up a one month e-fund and then debt. Finish the e-fund next. Start retirement. Start regular savings and then do #5 and #6.
Love: March 2010 Marriage: July 2013 Debt Free: October 2014 TTC: May 2015
Give something to retirement! If your company gives a match at least utilize that match until you can give more. H's company gives 5% match so we just started saving 5% so they will match it. I am 22 and H is 25 and we would prefer to use that money elsewhere but we are trying not to be so short sighted.
Love: March 2010 Marriage: July 2013 Debt Free: October 2014 TTC: May 2015
My company matched 75% of the first 6% last year and 95% for the two years prior missing more than a year of this free money and what it can compound into is not easy for me to do.
I think it looks good, but I agree with PP about retirement. If your employers offer a match, please contribute up to their match. That is free money that they are trying to give you... it is basically like getting a raise!
Also, if you are concerned about both an e-fund and retirement, consider a ROTH IRA as both retirement and your e-fund. A ROTH IRA allows you to contribute up to about $5,000 a year per working person. This is post-tax money, which is good because then you pay taxes now instead of later (when taxes could potentially be higher). ROTH IRAs are typically used for retirement funds, but they can also serve as an emergency fund. That is because you can withdraw your contributions (not your earnings) without any penalty if an emergency arises. With a ROTH IRA, you also have more investment options than you would through your employer's 401k. However, if you are using this as your e-fund then you will want to have it somewhere safe like a Money Market, so it isn't tied up in the stock market.