Our financial goals are pretty modest, mostly to account for the fact that we’re not completely in control of two of them – the market has a lot to say about it.
- Pay off all non-mortgage debt that carries interest
- Get to 650k in Net Worth, with a stretch goal of 700k
- Increase our assets to 1.2 million (conservative to account for market fluctuations)
Pay off Debt
Our goal this year is to pay off all non-mortgage debt that carries interest. We’re on track to have my student loans paid off around July. Then, the only debt we’ll have is the car loan at 0% interest and the mortgage at 4.125% interest. We’re still waffling on killing the car loan this year – we can do it – but because it’s 0%, we’d rather that extra money work for us. The current plan is to set aside $2500/mth to pay off non-mortgage debt (principal and interest).
Once the student loans are paid off, the plan is to put 20% of my salary and 17.5% of Dad’s salary towards our 401(k) and 403(b) plans (the percentages that get us just over the legal maximum not counting any bonuses). That won’t max us out for this year, but it will give us our new “normal” after-tax income for 2015, and once we get those numbers, we’ll allocate the rest of that $2500/mth to either a Roth, beefing up the emergency fund (my preference), a taxable investment account, or the car loan. We don’t want to go hog-wild and try to contribute an almost combined $35k in 6 months leaving us without what we need for “normal” spending. But, if the contribution limits change in 2015, we’ll be increasing our contributions along with it – both of our retirement plans have a “contribute the legal max” button that we plan on using for 2015.
650k Net Worth/Assets of 1.2million
We added almost 150k to our net worth in 2013, and almost 200k to our assets. A good bit of that was the market run-up, and I don’t expect that to continue in 2014, but I do expect to increase our net worth and assets by contributing substantially more to our retirement accounts, and paying off debt. If the stock market starts running up again, I may revise our goal, but gaining 100k in one year will make us happy.
We’re also dependent on our housing market to stay stable (or grow), and while it’s been stable and growing for the last 3 years, I’m just hoping it stays stable. The DC area has a “special” housing bubble in that so many people are moving in and out of the area, that housing has remained relatively stable – even through 2007-2009. Values did drop, but not as sharply as other areas of the country. I’m counting on that protective “bubble” to remain throughout 2014.