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The New Plan

January 13th, 2010 at 02:50 pm

As much as I wanted to pay off the one card by March, we need more breathing room. We can not be operating without a savings cushion while DH is employed by a temp agency (not that working full time for another company would be any better in his field, but I digress).

The new plan will require 36% (so less than before) of our income to go towards the debt repayment but leaves us both with a cushion and some money to spend (4.4% of the budget and includes all groceries). Our payoff will be in October (*sigh*) but the chances of needing to resort to the credit cards because something else happens (we just had 4k worth of something happen) goes down tremendously.

Strangely, the evaporated balance transfer offers have come back so I won't have to pay a high interest rate for the privilege of time (this is a mixed blessing since I know I would never pay over 10% apr for any type of loan but 1.99 and lower doesn't encourage speedy payoff).

Part of the additional setback is the access to the 401(k). We are putting 15% into it pretax and that is a big chunk out of the budget. On the other hand, the habit of saving has already begun to pay dividends for us. Our retirement accounts have been steadily climbing and our net worth with it. I wish we had begun these accounts back when we first moved out here. The delay in waiting for our debt to be paid off was a poor choice since it takes awhile to reform bad habits. And thanks to that 401(k), tax time will avoid being a big hit to the wallet.

Overall, I am more than a little disappointed by this delay but I am trying to be realistic with my budget.



4 Responses to “The New Plan”

  1. Ima saver Says:

    I think you are doing really well.

  2. Caoineag Says:

    Thanks Ima. It is very discouraging to keep having my budgets waylaid and the debt payoff setback. I am tracking actual expenses this year by category so I am hoping that a whole year will allow me to build a more accurate budget. The past year has been in a total flux though so we have had to just keep rolling with it.

  3. ceejay74 Says:

    Sounds like a very well-reasoned plan. I wouldn't be too despondent. Sometimes I've thought we should slow down our debt repayment and put more into retirement; the longer we delay the more catch-up we're going to have to play later.

  4. boomeyers Says:

    It never hurts to use caution. You can always save it up and if something works out, you can make a big payment at some point, instead of putting something ON the card.

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