Tuesday, October 22, 2013

The Grand Plan

It's no secret that I have some pretty big financial goals. Pay off student loans, buy a house, get a new car when needed (likely soon), afford to travel and participate in weddings, and have a backup savings. On an entry level salary, it's impossible to accomplish all of these goals at once, no matter how impatient I am.

I constantly flip flop on my financial priorities and then get frustrated when it feels like no visible progress has been made anywhere. At the start of the month I made an executive decision to get my priorities in line once and for all and to stick to it for a whole year! It will take longer than a year to pull of all of these goals but it gets me out of the habit of flip-flopping. I even considered the advice of close friends and family to ensure my plan is worth sticking to and easily enough, everyone was on the same page.

So I'm putting it in stone (on the blog) to solidify plans and fill you in on where I'm at. My regular paycheck covers all of my expenses without a penny to spare - and yes, this is a bare bones budget. In order to even look at financial goals, it all comes down to my side jobs and extra income.

Here's the grand plan:

Each month set aside $150 for a separate savings account for weddings and travel. Events will happen, and almost all of them are long-distance. Capping myself at $150/month will prepare me for these expenses and then let me focus on other priorities with any extra cash I can bring in.

Build my savings to $9,000. Yup, sounds like a lot. But there's a purpose for every dollar and this is my number one priority. Save $5000 for a down payment on my house by the time my lease is up. Save $2500 for an older used car. I drive a totaled car and no matter how loyal it is, if I'm in an accident, insurance won't cover it. I need to be prepared for this to happen any minute and if it takes a few years then I will just earn interest in the mean time! Save $1500 for a back up savings cushion.
Since my paycheck does not cover money for savings, I need to be ready for bigger expenses that are
bound to come up. $1500 isn't much but it's a start I'm comfortable with before I focus on loans.

Pay down credit card and manage these cards to stop wracking up balances. My card is interest free until May 2014 and I refuse to waste money on credit card interest. Balance is $2,500.

Go ape shit on my loans. Once I get a home, I hope to get a roommate or two to free up expenses for additional loan payments. I have $60,000 in student loans and I want them gone by the time I'm 30 - in 4.5 years. That might be a bit crazy but I'm determined!

Increase my savings and retirement funds.

So there you have it! It kills me to set aside my loans that are wracking up interest but I need to be prepared for regular life as well. I started at $0 and I'm already looking forward to sharing the great progress I've made in October!

1 comment:

  1. As crazy as it may sound your posts always make me so excited to graduate and then I can start my own paying off loans/ savings plan.