Reading everyone’s 2009 financial goals has been very inspiring but intimidating at the same time. I’ve gone back and forth on how I want to allocate our money. I debate between paying more on my mortgage, paying more on our student loan and car loan, and saving. I think that I’m going to make my 2009 goals simple, because I’m anticipating a semi-large expense next year (if things go the way we would like). It will most likely overlap into 2010, and I want to make sure we’re as prepared financially as we can be.
I love seeing the principal balance on our mortgage go down. I hate seeing how much of our payment goes to interest each month, so every extra little bit I can throw towards our mortgage is a good thing. I’m hoping that I can make one extra monthly payment as a principal only payment for 2009. I can do it one of two ways: at the end of the year, pay $960 in a lump sum on the mortgage, or break it down to a monthly payment of $80 extra on principal. I’ll probably just pay $80 extra a month and forget about it. Our mortgage interest rate is 6.375% and we’ve got about 28 years left.
Our payment is $172.75. We’ve been paying $200 a month, with $27.25 extra towards principal. This is a 20 year loan at 6.89% and we’ve got 18 years left. We should have it paid off in about 15 years at the rate we’re paying.
I’m going to keep putting 8% of my pay into my ROTH 401K at work. I have some concerns that we’re not saving enough for retirement because Mr. Money’s work does not offer a retirement plan at all. He’s 31 years old and I’m 25 so I feel like we’ve got time on our sides, but it’s still scary to think we don’t have enough money for retirement. We both have ROTH IRAs but we aren’t contributing. I almost want to take some money out of savings and put it in those to reduce the amount of taxes we pay on the interest in our savings account.
My calculations show that by making the minimum payment on the student loan each month we’ll pay down $2160 in principal. That will leave a balance of $3940. I’m hoping we can pay this off in 2009.
Making minimum payments, we’ll pay down $3000 in principal in 2009. I would love to pay this loan off too, but it’s not my number one priority because we’re paying 0% interest and we’re trying to get the student loan paid off first.
I’m going to keep putting 25% of my paycheck into savings. From here, we can decide whether we want to send the funds to retirement, pay off more debt, or just keep it in the emergency fund.
What do you think of my 2009 goals? Are they reasonable? Do you think I should focus more on retirement?