I'm so excited because this is going to be the year, that we FINALLY achieve our goal of having an emergency fund! I know we technically have our desired number in the bank right now, but I'm not going to count it as official until we also have enough cash to pay our house property taxes in December. But, barring any more "emergencies", we are on track to make that and possibly have a little beyond that for a slush fund.
I'm excited to get this emergency fund set up because that will lead us to getting back on track to our bigger picture goals. DH and I decided that we'd like to pay off our house early, before our oldest son enters college in 10 years. We'd like to be completely debt-free at that point (no mortgage, no car loans, etc.) so that we will be set up to retire without depending on our kids, and so that we can help pay for whatever remains of our kids' college expenses.
Earlier this year we re-financed our home loan to a 20-year note. When January rolls around and our Emergency fund and taxes are all paid for, we are going to make several changes:
* Increase DH's 401k contribution to 15%
* Continue to have less taxes taken out of DH's paycheck so that we don't get a huge refund at the end of the year. Put $500/month into savings so that we can pay for our property taxes at the end of the year.
* Contribute $100/month per kid into their college funds (3 kids = $300 total)
* Contribute additional principle to our home loan every month. I actually have an amortization spreadsheet that I can play with. To start with, we are going to contribute an extra $300/month. Starting next Fall, we will have 9 months where I have no kids in pre-school, so we will roll that extra money over to the mortgage as well. When my youngest enters kindergarten in 4 years, my plan is to start some part-time work that will go towards the mortgage as well. With these extra payments, we are showing that we could actually pay off our home in 8 years. But I'm giving ourselves a 10-year-goal.
* Eventually, after our car is paid off in 3 years, I'd like to set up a separate car savings account and roll over our current car payment amount into that every month. Then we will be all set to buy our next car with cash.
* I'm also going to start a separate vacation savings account in January. Even with our goal of paying off our house early, vacations are still a big priority. Our kids will only be young once. Two of our kids are adopted from Russia, and we'd like to take them back there to visit before our oldest turns 17 (they are still Russian citizens and they can be conscripted if they visit between the ages of 18-26). So that trip will cost a bundle and we will definitely need to save for that. DH and I would also like to take a kid-less trip to the Olympics in Rio in 2016. Plus we'd like to take one more Disney Cruise and go to Disney World in an off-season time before our oldest leaves elementary school. Washington DC, Seattle and New York City are also on our wish-list for family trips.
So that's where we're headed. I'll admit that paying off the house sure seems like a daunting task. Our mortgage is about $140,000 right now. I just think the feeling of being debt-free by the time we are 50 is going to be great! We just need to have the discipline to stick to our plan.
Looking ahead to our big picture goals
September 27th, 2012 at 06:34 pm
September 27th, 2012 at 06:51 pm 1348771909
Nice plan! Did you adopt siblings? How old were they? I love to hear adoption stories. Such a nice way to grow a family.
September 27th, 2012 at 07:19 pm 1348773577
September 27th, 2012 at 08:09 pm 1348776551
I know you can reach your goal and have fun meeting the challenge.
September 27th, 2012 at 08:13 pm 1348776837
September 27th, 2012 at 11:03 pm 1348787039
September 28th, 2012 at 01:26 am 1348795576