Sunday, November 11, 2007

Loans as Percentage of Takehome?

Because I am getting married, I have been spending some time/effort trying to imagine our life as DINKS. While we hope God will bless us with children soon, we expect at least 1 year as DINKS.

After taxes, benefit costs, and 401k contributions, our loans will take up the following percentage of our takehome pay:
22% - Mortgage and Heloc
8% - Car Loans (hers will be paid off within 12 months, cutting our payments in half)
8% - Student Loans
0% - Credit Cards
38% doesn't seem so bad; however, we are going to take advantage of DINK status by "spending" what she will save on rent, utliities, etc as follows.

1. 50% will go towards saving for children.
2. 50% will go towards debt reduction with the following priorites.

a. Eliminate non-subsidized student loans within 12-24 months.
b. Increase payment towards HELOC to increase equity in our house.

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