I’ve Paid For This Twice Already…

Tell All Tuesday ~ New Job, New Goals Edition

As I shared yesterday, I am starting a new position today running a taekwondo school that my head instructor owns. Since that has the potential to have a huge impact on our finances (and should have, for us, a pretty big effect right from the start regardless) instead of going through the debt repayment progress for this week (which there has actually not been any) I thought I would talk more about the financial impact of my new position and some new goals for our debt payoff scenario because of it.

Generally, after taxes I should be earning a base of about $400 per month right now for teaching at the new location and generally keeping the school neat and clean. That is because the school is only open 3 days a week for a few hours a day right now, because there are only a few students (the school has only been open for about a month). As I recruit new students, we’ll expand the hours as well as the number of classes, so that base will go up. I am also paid on an incentive structure for meeting a number of goals, the biggest of those is to bring in new students. I am provided with flyers and other forms of advertisement, I just have to put in the time to try and advertise the school and recruit students. At a conservative estimate, if I meet my baseline goals, I should earn at least $200 more a month after taxes from that. I am hoping to far exceed those goals but for now I am going to use a monthly salary of $600/month for my debt repayment calculations. Right now, all of that income will be earmarked to debt reduction. If, in the future, I need to stop tutoring because of time demands, I will have to reallocate some of that money into our general budget (our budget depends on me bringing in $500/month right now and I meet that primarily through my tutoring income) but if that happens, I should be earning more from taekwondo than these estimates. So I am going to leave the goal calculations at an additional $600/month for debt snowflaking from this position.

Using the snowball calculator, I calculated the effect of paying $1600/month to debt ($810.41 snowball minimum, an additional ~$190 from other sources, and $600 from this position). I did try to import the pretty chart but I am useless at those types of things, so I’ll just go over the major highlights:

• My spouse’s student loan should be paid off by December 2008. His projected payoff date right now by Sallie Mae paying only minimums is 03/19/2013, so that would be almost 4 1/2 years ahead of schedule.
• My student loan would be paid off in August 2009 (Sallie Mae projects 6/16/2017, so that would be about 8 years ahead of schedule).
• The car loan would be paid off on schedule in March 2009.

This would put us in a position to spend the rest of 2009 and 2010, which were to be more debt reduction years, to aggressively save a 6 month emergency fund, bump up retirement savings, and start saving for two new (to us) cars for when ours kick the bucket.

I of course do not know how the position will work out yet, and if I will be successful at the growing of the school part, but I have confidence that I can do it. I am going to wait to formally revise our goals until at least midyear, because I want to see the reality of our income situation before I do so, and tutoring is also a factor - I won’t be tutoring much in the summer when it is slow, and money from other sources will have to be reallocated to continue meeting our budget. But I am pretty hopeful that we will make a large amount of progress, and I *really* want to have my spouse’s student loan paid off this year. But the future from here is looking rather bright.

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