Let me start out by saying that we’re no way near our debt payoff process. In fact, we’ve just started a few months ago and have a very long and at times painful journey ahead. But my hubby and I got into an argument about this last Saturday on our way to visit my mother in law stuck in traffic for hours. Which wasn’t pleasant, but we cheered each other up by getting some chocolate shakes from Dairy Queen~^^ But the problem still remains.
So I brought up the conversation of how I’m so excited to have started to get serious about paying down our debt and how we should start saving for our house downpayment right after all the debt have been paid off. By this point, we hadn’t talked about when we were going to buy a house. We agreed on budget and paying down our debt, but we didn’t exactly talk about when we’ll save up for a house. Basically, we didn’t have specific financial plan that we’d agreed upon for the period after the first 2 years of our debt paydown plan. My hubby didn’t want to wait until all our debt, including his MBA loan, were paid to start saving for a house. He’s reasoning was that the housing market in our area has already rebounded and it’ll continue to rise. He doesn’t want to end up buying a house at the very peak and miss out on good opportunity.
My reasoning for waiting until paying off all our debt is that all the income will be ours to save and do whatever with and we can just focus on buying a house. I didn’t want to try to save for a house while juggling other debt. Debt is a big source of stress for me and him of course, so I want them out of our lives and not keep them around. I do see his point, but I still think my plan will make my heart lighter.
So here’s how my plan and his plan will pan out in my projection.
1. I win the argument and do it my way. Without adding my hubby’s MBA loan, I want to payoff my undergrad and his undergrad loan in 3 years. In that time, our cars will be paid off as well as our 401k loan. After that I want to payoff his massive MBA loans in 4 years and take another 2 years to save up for our house down payment. I will be around 42 by the time everything’s done.
2. He wins the argument and do it his way. Focus on paying down our debt until he finishes his MBA in 2 1/2 years. Then start to save for a down payment while making regular school loan debt, which includes left over undergrad loans and full MBA loans. I’m guessing it’ll take around 4 years to save up for a house down payment since we’re paying for the school loans at the same time, which will be over $1,000 a month for 10 years just for the MBA loans. With this plan, we’ll be able to buy a house in 6 1/2 years from now, but will keep our MBA loans until I’m around 45 since we’ll be paying a lot more interest on school loans and trying to juggle different things financially at once.
I’m not a math person, so I could be a little off. But this is the general plan of it. What do you guys think? Do you guys have another plan we should look into? How did you guys do it in your case?