We got a snow day today in DC! Really exciting, because I’ve been fairly tired from work and ended up taking a 3.5-hour nap after dropping off Mr. B at work this morning. I guess I really needed that!
Since it’s the end of the year and also coming up on my first year with this “new” job, I thought I’d nerd out and actually sit down and work on a spreadsheet “Game Plan” in Excel. The goal is to get from $92.6k down to ZERO by my 36th birthday. I picked 36 since it’s in about 4 years, which is November 2017. Being Chinese-American, the significance of that is that it’ll be my zodiac year (there are 12 animals, so every 12 years is your animal). It’s a totally arbitrary self-imposed deadline, just like how my credit card deadline was “Labor Day 2013”. And by arbitrary, I also mean some early number crunching was telling me trying to get this done by my 35th birthday (another nice, round number) was a little too crazy.
So I ended up doing both a conservative plan, and a more aggressive plan. Both of these involve putting in extra payments each month (in addition to the minimum payments), in addition to the two “extra paychecks” each year (I’m paid biweekly, so there are 26 paychecks per year, and most months we get two), and potentially two bonuses per year (mid-year and Christmas if the company is doing well).
The conservative plan would have me paying an extra payment each month of $1,334, half of each “extra paycheck” post-tax, and half of each bonus pre-tax. (I hesitate to put all of the actual numbers on the blog.) This is assuming the Christmas bonus is the same as that crazy mid-year bonus…but of course I could be wrong, and will change that accordingly when I find out this month. This would end up taking my grand total down by $25,000 each year, and will get me out of debt by Sept 1, 2017. A solid 3 months before my birthday!
Then there’s the more aggressive plan. I’d start off with the same $1,334 extra payment each month in 2014, with 75% of each extra paycheck and half of each bonus pre-tax. Each year after that, assuming my salary goes up also, the monthly payments will be $100 more, the contributions from extra paychecks will be $200 more, and the contributions from each bonus will be $500 more. Whew! This is why it’s the more AGGRESSIVE plan, duh. This is based on many assumptions, but I’d like to think I’d get paid more each year. In this scenario, I’d pay off $26,000 in 2014, then $28,600 in 2015, and a hefty $31,200 in 2016. That leaves only $3,100 to pay in 2017, all in the month of January (which is also an extra paycheck month!). SO…in the more aggressive plan, I’d be totally done by the end of January 2017. WOW! That’s only in 3 years and a month from today! And technically, it would be before the 2017 Year of the Rooster even begins on Jan 28, 2017. COOL.
It does make me feel much better to get a game plan down, and I think $1,334 extra per month is a very realistic amount to put towards my loans starting in January. My current salary and budgets have me being able to contribute $1,100, but I’m having my one-year review coming up soon and there is chatter about a raise and putting me on the company’s phone plan (which would save me $93/month). I’ve got much more work experience along with increased job responsibilities at my current position now, so it would only make sense. Keeping my fingers crossed!
Hope you are all safe and warm!