Seeing as how a central part of any personal finance blog is laying out your gameplan and goals, I should probably tell you about them. Also, isn’t it a new year and time to make resolutions?
Here’s what I hope we achieve in chronological order:
1. Sell my car by the end of 2015. My 2005 Honda CIvic has been a workhorse since its birth ten years ago. It’s deftly transported two 12-foot kayaks and two bicycles for our camping trips at least once every year. It’s gotten me from Albany to Buffalo to Boston to Brooklyn, and to Montreal, Ottawa, Kingston and even Toronto.
But ever since Marge has been able to walk to work, and I’ve started taking an very exclusive, luxury mode of transportation to work most days (which I will outline later), it’s becoming obsolete. I love Terminator X (that’s my car’s name), but the truth is, it’s just not necessary anymore, and it spends its days parked on the street, slowly depreciating. That money could be put to better use, and someone else can put Terminator X back to work.
Ever seen a Civic with two bikes and two kayaks loaded on it?
2. Pay off Marge’s car by the end of 2015. Right now, the Toyota Corolla loan has about $6,100 left on it. We bought it new in September 2013. Extra payments on the Corolla are not allowed unless we hit our savings goal each month. Our monthly savings goal right now is $3,200. Any excess over that will go into the car loan.
3. A litany of 2015 Expense Category Goals. In light of our 2014 Expenses (Part 1, Part 2, Part 3), here are a few more goals for the end of the year:
- In 2014, we spent $1,416 on gas. In 2015, I want to spend less than $1,000 on gas.
- Keep Dining expense under $1,000.
- Bring Takeout expense under $1,000.
- Keep Clothing expense under $1,000.
4. Pay off our mortgage and student loans in 2017. We bought our house in December 2008, and I originally wanted to pay it off before I turned 35 in March of 2017. I worked out a payment plan for this a few years ago, and March of 2017 seemed just a little too optimistic for my blood, so I changed it to be just during 2017. So far we are on schedule. Our home mortgage has $76,729 left on it. The student loans have about $8,857 left. Those we actually won’t be paying off very early, it’s just their original end date. Since their interest rates are so low, it’s never been worth the extra cash.
5. Retire by age 43 in 2025. This depends on so many factors that I almost have a problem listing it as a goal. Inflation, stock prices, interest rates, salary raises, where we want to live, currency fluctuations… But according to my incredibly baroque spreadsheet of all of our investments, predicted savings rates, and contributions going forward, we should have enough to support our living expenses (and then some) by 2025. But mostly, I pick age 43 because of where I work.
You see, by 2025 I will have 20 years of service at the same place, and I am one of those lucky suckers who gets a pension at age 55. After 20 years, there would be a boost to my pension amount and other related benefits. Living in a generation that has seen the demise of the pension plan and the rise of the 401(k), I feel like a pension is such a gift, I would be stupid not to (sort-of) maximize it. So even if, say, 2023 rolled around and it turned out I could retire with 18 years and get by, eventually getting a pension worth 27% of my salary, I should probably stick around until 20 years are up and I get a pension worth 40% of my salary.
Or maybe not. A lot can happen in ten years.