2007 Mid Year Review
Since we have passed the 6 month mark I thought it would be appropriate to revisit our Financial Plan for 2007. When we made this plan back in January, I was not quite sure what to think. We were recently married and still in the process of combining our lifestyles and finances. Six months into the year, our modest goals look very achievable.
To keep this simple I broke down our goals into:
Savings: We have managed to build our emergency fund to cover about 4 months of living expenses. We will continue to save the majority of our excess earnings here as the beginnings of a down payment for a house. We are still over 2 years away from looking to buy a home so we do have time in our favor.
Investments: Back in January I was toying with the idea of still being able to max out our Roth IRA’s lump sum for 2006. When our taxes were done, we actually ended up saving $1000 off our tax bill by contributing to a Traditional IRA instead. This will not effect us too much in the long run since I should be able to convert this into a Roth IRA in 2010. For our current year I have been contributing $200 a month to my Roth for 2007 with the intention of making up the difference at the end of the year. My wife is contributing a minimum amount to retirement at this time which remains a point of discussion.
Debt: Debt has been a central part of my life for the past 7 years and will continue to be for the rest of my life. The key difference between the Dr. T of 3 years ago and Dr. T today is that I am using debt more wisely now and I am more educated on the pitfalls of not managing debt. My goal for our debt management in 2007 is to rid myself of the last of my credit card debt from years past and to continue making my student loan payments. At this time, we have been able to do this and will pay off the last of my old credit card debt in November. My private loan comes due in November as well which will add to our monthly payments
Expenses: When I looked at our expenses from 2006 as 2 separate individuals I was quite embarrassed with our sum total of about $98,000. This number included multiple “one-time” expenses so it was not an accurate representation of our day to day lives. I figured we should be able to cut that to about $40,000 for 2007 and judging by our results so far we are pretty close.
Here is the break down of our expenses so far this year.
As you can see we are about $4000 off our goal at the half way point. The biggest reason for this is that we have done a little more traveling than expected this year and we continue to spend too much on groceries. I am confident that we will be able to make some cuts over the next six months and squeeze in under $40,000.
So far, so good. We shall see what the next six months hold for us.
