First time poster, long time reader (any other Paul Finebaum mockers out there?? No? ok...)
I am writing because you are in a situation much like mine, albeit with a half decade head start on this. When I project out where I want to go, it seems like I am screwed. When I look back at where I came from, I realize I'm on the right path. But, I could have made some better choices.
The important thing here is to not become a stereotype of a New Years Resolutioner who won't be at the gym after Feb. 1. The brief posts and summarized plans are all great to type out-it doesn't take more than a few minutes. The real test is in the daily implementation. That's where the tiny rationalizations and 'unimportant' concessions add up; focusing on the micro instead of the macro.
Here's my two cents (which compounded annually at 5% will be five cents in less than 20 years, that's a 150% return on investment!!)
Credit card is number one. That dead horse has been beaten.
The second most important thing is after you pay off the Credit card debt, max out the 401K. This is important for two reasons.
1) It starts accumulating capitalizing resources for you to build on. Taking my snark about two cents and moving the decimal point to where the amount is $20,000 (assuming a 2% employer match) and in 20 years you have $50,000 from that one year of investment. In isolation that is not retirement money, but do it for five years (i.e. to get in my shoes) and you're looking at almost a quarter million dollars in retirement at age 48. For practical purposes, the amount will be $400,000 by the time you can withdraw it--or $20,000 in gains each year to live off of for life at 5%. Pretty nice. A fun way to put it (for me) is that if you don't put another dime in retirement after those five years, from age 33 to 60 you'll still have a $20,000 "pension" to live off of. And we all know that is only the last safety net.
2) You will artificially reduce your disposable income. This is the more important reason in the beginning. With your newfound Mint account, you'll come to despise those little red bars showing you've broken a budget, and will become more cost conscious by artificial necessity. Consider it a safeguard for your spending, and a treat for any pay raise you will receive in the future as it will all come back to you.
Once you have those two, even with your reduced take home income, you should still have money to spare. If your student loans are new (in the first few years of interest to principal reductions) and not consolidated, then by all means give yourself a "raise" with every payment you knock out from your post tax income. If you're 5 years into your payments on a 3.3% loan, you're probably so deep into principal v. interest payments that the money is best invested elsewhere. Plus side, you are working off another artificial reduction in income that magically disappears in xx years!
I personally wrestle with this one-loans v. investing. Yeah, not owing Freddie and Fannie sound great, but is 43 grand for $2400 in interest savings worth it? What about the $2200 in savings next year? Would it be better served in a Vanguard account on the chance I earn that amount in gains (that then continue to capitalize long after the loan payments have gone away?) Should I get my first slum rental property to see if it fits me (are you going to stay in Seattle?)?
I disagree on getting rid of a car all together. Get rid of the payments, yes, but make attainable short term goals, then continue to make new goals. A car is the bane of this site, but also an unfortunate effect of living in 'merica and its suburban sprawl. The best middle ground may be to nominalize use to make getting rid of it a choice instead of a sacrifice. That being said, never buy a car you can't buy in cash. Also never buy a Jeep, Volvo, or anything new, but that is my automotive background speaking...
Screwed? No sir. You're sitting pretty, and I am jealous.