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Home > The Grand Plan: Part I

The Grand Plan: Part I

May 22nd, 2008 at 12:34 pm

I am getting married on May 31st. My fiancee and I are extremely excited, have known each other for a long time, have similar interests and values, and all of that other good stuff. One thing that I think is going to help us avoid a lot of fights is that we have similar values when it comes to money.

With that being said, I want to lay out our plan for the next five years to see what you all think. First, between the two of us, we have saved roughly $17,000 since we graduated from college. That is somewhere between nine months and a year of living expenses for us. With that safety net in place, we can proceed to debt.

In terms of debt, all we owe is for student loans. I currently have $9,200 and will only have a few thousand more to complete my M.A. I get a $4,000 raise when I complete my M.A., so we plan to throw all of that on to student loans until they are paid off. DF, soon to be DW, (If I understand correctly, DW means "Dear Wife"? Going on this assumption, DF is "Dear Fiancee.") is starting an M.A. in college administration, so that will ultimately throw $18,000 to $20,000 more in student loans on top of that.

Our plan is to live only on my salary and save all of DF/DW's salary. Assuming she makes somewhere around $30,000 each year, which is low-balling it, we could have $80,000-$100,000 saved up in five years.

If this does come to pass as planned, we have a couple options. The first option is to throw all of it on a house. The second option is to max out a Roth IRA and throw that rest on house. Beyond that, I don't really know. Any suggestions? Is this plan feasible?

4 Responses to “The Grand Plan: Part I”

  1. creditcardfree Says:

    Not a bad plan. You are doing so well between the two of you! I would keep your savings as is for emergencies. I would pay off all student loan debt, including paying any of your future tuition payments in cash, if possible. Next, I would max out Roth's for each of you each year, on $100K income, this is only 10% of your gross. Any remainder, I would put toward a house!

    Best of luck and congrats on the future wedding!

  2. Dido Says:

    Congrats on the forthcoming nuptuals, and for taking charge of your financial life so early!

    Your plan sounds good. The one thing I'd suggest is to max out your retirement contributions and then use the rest towards a house. The advantages of interest compounding are really tremendous if you have a 40-year time span for contributions, as opposed to the 30-year time span that most people have, as they don't really get serious about their finances until sometime in their 30s.

    At this point in your life and with your financial good sense, I'd be most focused on accumulating assets and building wealth. Of course, pay down the debt, but remember that both student loan and mortgage debt give you tax breaks. It's consumer debt that you really want to avoid, and you know that already.

  3. mooshocker Says:

    Communication is key to any relationship. Remember, a wedding is a day, but a marriage is a lifetime. God bless you and your sacrement of marriage.

  4. koppur Says:

    Sounds like a great idea. Since you have your EF pretty much saved up, you may want to split the rest up. Say 10-15% into yout IRAs, 10-25% invested, and the rest to a house. Good luck!

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