Status:
Family Size: 2 Adults
Age: Mid 20's
Occupation: Military Officers, 1 Active Duty (good money)/ 1 National Guard (not so good money)
Income 2012:
Spouse: 49k+, 3700+/mo*
Myself: 11k (National Guard Officer), varies by month of drill/additional training/annual training
Budgeted Expenses: (Hit under budget monthly 90% of time, if not under budget 100% for year)
HOUSING 1413.50
AUTO 322.47
SAVING 470.00
DEBT 400.00
FOOD 680.00
HOUSEHOLD 414.03
TOAL 3,700.00
SAVINGS: 5,700
CHECKING: 5,500
ROTH IRA: 6,600
*Right now spouse makes $1000/mo more due to recent promotion. I access budget off of 1 higher income for pay rate in January. Second/Third Income and promotions are considered extra positive cash flow for year and gets applied to debt/savings/unscheduled surprises (just bought our house, trying to smooth out rough spots and rebuild our current savings). Will absorb promotion funds into 2013 budget.
Debt Breakout:
Personal Loan: principal $23,886 at 2.25%, monthly payment $400. Consolidated student loans with parents. Reduced from 8% for me, increased from 0.9% savings for them.
Mortgage: $196,000 at 4.0%, monthly payment $955. Minimum payment for now, plan on attacking once personal loan is done. *Snowball Method!
CC: 0 balance, 4k limit, pay in full 2x monthly
Goal:
Debt free from parents loan ASAP. Then utilize extra funds to divide between mortgage principle and savings/investing. Current $400/mo payment towards debt. Jan 2013 changes to $800/mo budgeted and my $500 drill pay for $1300/mo debt payment. Forecast is June 2014 no loan. Always plan on living off of 1 income. 2nd income/3rd income is excess for mortgage/suplimental savings.
2016 minimum term of service up. Assess then none/one/both continue with military career. Identify where we can minimize expenses in next 4 years and make major course decisions come 2016.
Question:
Given the employer is Uncle Sam so our job security is 99.999% until 2016. What longest projection model would you choose given these 4 scenarios (IE fed txes/expenses savings) for EMERGENCY FUNDS comfort?
1. Starting Jan 2013, $1300/mo payment, keep all current E FUNDS at 10k. Payoff EST 6/2014. total interest 2090
2. Starting Jan 2013, $1300/mo payment, use all but 2k E FUNDS (est 10k) towards loan. Payoff EST 10/2013. total interest 1860
3. Starting Jan 2013. $1890/mo payment (make no savings deposits), use all but 2k E FUNDS (est 10k) towards loan. Payoff EST 6/2013. total int 1820
4. Starting Jan 2013. 1890/mo payment (make no savings deposits), use 5k towards loan, 5k E funds. Payoff EST 9/2013. total int 1883
*In long run I've already avoided close to 12k in interest on this loan.
Note: Military guaranteed income. Only true concern is home/auto incident. Commutes are short (barely drive anywhere). Military Medical benefits that would prevent most medical costs. Cars in good working order. All expenses are accounted for and budgeted for in 2013 with 4700/mo, No standard of living change, mostly saving/debt addition. Can live off of 2500 at worst case scenario.
The idea of getting to a 2.5k expenses/2.2k in savings situation is exciting!! If I can manage to get full time employment in addition to the Guard we can be at 70% SAVINGS!!!!!