Assuming that all goes according to plan (ha!), I will have my three-month emergency fund in place with my next paycheck. Yah! But what’s next?
I’ve worked up a few preliminary financial plans based on a few different scenarios that I thought I’d share here so that I can get some insight from my wonderful readers! Bear with me while I explain all this:
I get my student loan forgiveness in the next month or two. It’s very complicated to explain, but it’s unclear whether I get my $5,000 in student loan forgiveness now or at the end of my seventh year. I sent in the paperwork last week, so we’ll just have to see what the verdict is. At any rate, if I do get the $5,000 forgiven now, I’ll throw some of my extra money (I have about $400 per month to work with) into paying off the rest of my federal student loan over the next year, as well as starting to save for a house. After the student loan is paid off, I’ll begin aggressively saving for retirement.
I don’t get my student loan forgiveness right away. In this case, I’ll start contributing $200 to my Roth every month and $200 to saving for a house. When I reach the end of my seventh year of teaching and get the loan forgiveness (which will pretty much wipe out the remainder of my federal student loan) I’ll ramp up my retirement savings. This is looking like the most likely scenario at the moment.
This is a possibility regardless of whether the student loan reimbursement comes in or not. It’s the most frivolous plan, but for obvious reasons the one I’d like to take the most! In this scenario I’d split my $400 evenly between a travel fund and a house downpayment fund and I’d use the two “extra” paychecks I get every year towards investing in my Roth. Again, I’m not sure this is the most financially responsible course of action – I “should” be focusing on paying off debt and saving for retirement – but in the spirit of rediscovering my wants, this is the scenario I want to follow most.
So what do you think? How crazy is Scenario 3 – too outrageous? Is there another scenario I’m not seeing? I need you guys!