My New 5 Year Plan
People that know me or have read my journal long enough know that I’m constantly re-evaluating my finances and am a very analytical person. I’m always thinking of pros and cons, future methods of doing certain things, plan A and plan B.
So it’s natural for me now that we’ve bought a house to start rethinking future plans, the first being my new 5 year plan. I had already set up a 5 year plan in January, but obviously things have slightly changed.
I am dividing this up in to Plan A and Plan B. Plan A involves whether or not the Sweetheart and I continue our relationship, and Plan B is a backup plan in case we don’t. I’m always trying to cover all of my bases so I’d like to plan for both.
Plan A (with the sweetheart)
Goal #1 - Same as in January, pay off the mustang. I wanted to do this by the end of 2008, and would have had I not purchased a house. However I will have the mustang paid off in 2009, which means I still have it paid off a year early.
Goal #2 - Still pay off my fathers debt. Again this was delayed because of the house purchasing, but I expect to have this done by 2010.
Goal #3 - Sweetheart sells his house for $90k (It’s in an area where the housing market is much cheaper compared to the here). In turn we use this money to:
- buy him a new used car for around $14k
- refinish the basement of the house into an apartment with 1-2 bedrooms, bathroom, kitchen. Rent this out for $1000/month (includes utilities)
- Put $16k into our emergency savings (this would take care of the task of completing my emergency fund which was in my 5 year plan in January)
- Put $40k towards the mortgage
- Put $10k towards finishing paying off all debt of my fathers (and if any is remaining on the mustang)
Goal #4 - After we put the additional $40k towards the mortgage, we refinance for 5.5% at 15 years, which would bring our mortgage payments down to $898 (not including taxes and insurance) a month. The renter above would take care of this cost each month.
Goal $5 - Live off of one income. This was also in my 5 year plan in January, but is still just as important to me as possible. The only difference is the second income would be split so that half went straight into savings and the other half went straight towards the principle of our mortgage.
Extra Goals from January - I had listed that I wanted to start saving up for my next car. This is still something I want to do, but with the extra $16k in the bank, then this is pretty much almost complete anyway. I had also mentioned wanting to have a cheap eco-friendly wedding and actually make it a challenge to see how cheap and awesome I can make a wedding. This is still something I’m very interested in, but I’m not necessarily worried about it within the next 5 years.
Plan B
Goal #1 - Same as in January, pay off the mustang. I wanted to do this by the end of 2008, and would have had I not purchased a house. However I will have the mustang paid off in 2009, which means I still have it paid off a year early.
Goal #2 - Still pay off my fathers debt. Again this was delayed because of the house purchasing, but I expect to have this done by 2010.
Goal #3 - Finish off the basement sometime in 2009 and have a renter for about $1000 a month (includes utilities). This would take the burden off of the mortgage each month and allow me to reach Goal #1 and Goal #2 faster. It’s not guaranteed but it will help for as long as I have the renter 
Goal #4 - Start saving up for my next vehicle so that I can pay for it in cash and save tons of money on interest. I don’t expect to have this complete within the next 5 years, just started.
Goal #5 - Save up 6 months worth of expenses in my emergency fund. This is actually more important to me than saving up for my next vehicle. So if I can’t make Goal #4, at least I want to make this one.
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August 23rd, 2008 at 6:48 am
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