Hello everyone! My name is Heather, I'm 23 years old. I work for Chase bank (formerly WaMu) in Portland, OR. Here is my intro and some additional info on my savings/debt below.
Step One: $1,000.00 to start Emergency Fund - DONE
I currently have $3,244 in my Emergency Fund. I also use this account to save my 3-6 months of expenses. It's nowhere near where it should be, though. I also automatically have $100 taken out of each paycheck that is split into my 3 different savings accounts which I will break down later.
Step Two: Pay off all debt using the Debt Snowball (Except the house)
Not quite sure if I agree with Dave that I should payoff the smallest debts first. I'm more of a Suze Orman type who prefers to pay off the highest balance/high interest rate first. I will go into more detail about my debts later.
Step Three: 3-6 months expenses in savings
Currently doing that. See Step One.
Step Four: Invest 15% of household income in Roth IRA's and pre-tax retirement
I invest 3% into a company-matched 401k. I know I should do more, but it just doesn't seem possible right now.
Step Five: College Funding
I am not planning on children for many years.
Step Six: Pay off home early
Currently renting. I would like to own a home in the next 3-5 years.
Step Seven: Build Wealth & Give (Mutual Funds / Real Estate / Charity)
I would LOVE to do more of this. Just not in the cards for me right now.
I have a question for all of you that I will ask after I give you some background. I've made $50,000 this year. I am hourly + commission based. So next year, my commission payout model may look different, especially since Chase has now purchased WaMu and things are going to start changing very soon. My fiance and I are going to be moving to Boston in June or July 2009 and since there are no Chase banks in the Boston area, I will be unemployed for a period of time (hopefully not long since I have a lot of banking experience). Luckily, we will be living with his parents for the time so we won't have to pay rent right away. We want to get married before we move, nothing lavish or expensive, but something small for our families.
Currently, I am supporting our household. My fiance was unemployed from June through November this year. I am still taking care of all our household expenses because the only job he could find was working the graveyard shift for Wal-Mart making $10/hour. He has A LOT of debt (more than me!). This is a major reason why we are moving, because he believes the job opportunities are better for him in his hometown of Boston than they are here in Portland, OR. And since I can find a banking job anywhere, it seems to make sense.
My question is: Since I know I will be moving and out of a job in about 7 months, should I try to payoff as much of my debt as possible or only pay the minimums and throw the rest in savings? I'm torn as to what to do. On one hand, I'd like to at least payoff my remaining credit card debt (which is low and I could definitely do that) and then focus on paying off a high-interest personal loan I have, that way I only have two monthly debt payments to make (car + personal loan). On the other hand, I need as much money in savings as I can get because I will probably be the one also paying for our move across the country and I don't want to put that on my credit cards. What should I do?
Here is breakdown of my current savings/outstanding debt to give you a picture of what I'm working with. FYI - I have no student loans.
Emergency Savings: $3,244.96 ($25 of each paycheck is deposited in this account)
Christmas Savings: $ 25.42 ($25 of each paycheck is deposited in this account)
General Savings: $310 ($50 of each paycheck is deposited in this account)
Total Savings: $3,580.38
Car Loan: $13,180 - 7% interest
Personal Loan: $9,941 - 19% interest X.X
WaMu Credit Card: $160 - 8% interest
Nordstrom Credit Card: $763 - 7% interest (you should know that the debt on this card is not from clothes, but from buying plane tickets so we can visit my fiance's family in a few weeks)
Total Debt: $24,044