The little picture and the Big picture
Over at Clever Dude, the Clever Dude himself asks Is the thought of debt ruling your life? and I have to answer, yes. I mean, I started a blog just to have a place to endlessly talk about it didn’t I?
Actually, the blog helps me to think about debt a little less overall, because when I have a thought I can come here and spill it all out and then be done with it for a while. I know it will be here when I get back to it if I have further things I want to hash out around it.
But the idea around Clever Dude’s post was to think about not only the “debt reduction” portion of our lives, but the big picture and the future. The debt is (hopefully) our past and we’ve learned from it, but we can’t just stay focused on the past. We have to look towards the future and plan for that as well.
And honestly, I’ve barely touched that aspect. We do have:
~spouse’s 401K that he contributes 4% of his salary to and his employer matches 20% of his contribution
~I have a Roth IRA that I am in the process of moving to Vanguard. Contributed max the first few years I was in grad school (then $2,000/year) and haven’t touched since
~spouse has tradtional IRA that was a 401K rollover from previous job. Will be moving to Vanguard in January.
~college savings account for son, contribute $25/month to
~college savings account for daughter, contribute $25/month to
~emergency fund of $650, goal to get to $1000 by end of August and then not use except in… an emergency 
~”long term savings account” I just started and only has my initial deposit of $25, goal to contribute $25/month to
~”household” savings account for annual/irregular expenses, has $150, depositing the irregular expenses budget not used each month to
Okay, so that’s the current picture on the savings front. The “little picture” so to speak.
So… really, my current goal is debt reduction with some minimal looking towards the future. Getting the IRAs in order, saving a wee bit for the kids and in our long term savings, keeping up with the “planned” irregular expenses - but mostly focus on the get out of debt part.
We do have a pretty straightforward and mapped out plan for debt reduction, with a goal date of eliminating all but mortgage debt by December 31st, 2010. And I have a chart and specific monetary goals and payoff dates for each piece of that puzzle. All of the pieces of the little picture but also the overall big picture is firmly in place. But when it comes to savings…
I want to say we have long term savings goals… but right now, they are too fuzzy to be classified as goals. Save more than we are saving. Increase retirement and education savings. But the focus is still “get out of debt”. In fact, I never even considered making more defined savings goals before we were close to being out of debt. There is no real big picture. Just a whole lot of little pieces.
So thanks, Clever Dude. You’ve given me a lot more to think about. One year, 3 or 5 year, 10 year savings goals… we can do that. And we’ll be better off for it.
~J
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July 24th, 2007 at 7:22 pm
Hey, thanks for the writeup, and good luck on your journey to financial independence. It feels so long ago, but with the right goals and plans, you’ll make it!
July 25th, 2007 at 12:59 am
Thanks!