Readers! PF Bloggers! I’m pretty terrible at making a decision by myself and I’d love your help and opinions. You all helped me decide whether to buy shoes and how to allocate raises, and even extra roommate rent. As I begin to make my 2010 goals, I’m faced with a few option for the Savings/Debt money I have each month. I will do my best to explain the status of it all.
Top Priority in 2010:
My #1 top priority for the year will be to pay off my debt, which should be done April 2010.
January to April 2010:
- $700 to Debt
- $25 to Car Repair Fund (I’ll probably continue this throughout the year)
- $100 to Roth IRA
- =$825 per month
After I pay off my debt, the focus changes a little bit. Here are the three things I’m debating about right now: Emergency Fund, Wedding Fund, or Max out the Roth IRA. Right now with $825 flexibility each month, I don’t have enough money to fund all three goals in addition to my debt.
Here’s the status of each:
- Emergency Fund at $6,000
I’d have to add $3,600 to reach this goal since the account already has $2,400. That would mean approximately 5 months of $700 savings. If I start in May, then I could be done with that in September, or $450 each month until December.
- Roth IRA at $5,000
I will continue with $100 per month January to April. If I want to max out the Roth next year, I’d have $400 and would have to contribute $575 each month for the rest of the year to reach my max.
- Future [Wedding] Fund at $5,000
I want to have at least $5,000 to pay all (or most) of my wedding whenever the time comes. Read more about this account here. I already have $1,000 in this account and would need to save $4,000 in order to reach my goal in 2010. To be honest, I don’t expect to get engaged in 2010 but it certainly could happen if J moves here in the next few months. This may seem like a silly or premature goal, but it’s really important to me. Hmm perhaps I could reevaluate this once J and I live in the same town? I’m hoping that happens in 2010 also.
Other Factors to consider:
–Tax Refund: I got $1400 this year and that money could be used for some of these.
–Extra income: I could designate all extra income to go towards a specific goal in addition to what my top priorities are.
What do you guys think?
The Roth IRA is what is getting to me. I know I should max it out, but if I didn’t have that there, then I could easily save the entire amounts for the Emergency Fund and the Future Fund.
I know that in the scheme of things this is really not a big deal and I can always reevaluate things in the future, but I’d like to get my 2010 financial goals ironed out before the year so I can plan accordingly.
Pay debt, then…. Roth IRA, Emergency Fund, or Future Fund?