I'm new to GRS, but I'm loving the daily articles and community support! This seems like a great place to get advice and get input on how to save for my goals in 2013.

This is going to be a weird year for me because my husband is on track to finally graduate from college. Hopefully this means a job isn't far behind. In his field he should, even estimating conservatively, triple his income from his current part-time retail job. The big questions for us, then, are: 1) when will he get a job? 2) will we have to move? 3)if we do move, will I be able to transfer or need to get a new job?

Given that our financial situation is a bit murky, I'm setting up a few tiers of goals. The only debt we have is student loan debt, but it's pretty significant. I only have about $9.5k left of a formerly $20k loan, but the husband has $57k in federal student loans. The good news is, I did just finish funding a 3-month emergency fund (yay!) and we are both automatically funding retirement at reasonable rates for our ages (me: 15%, him: 11%).

Here are my goals:

#1 MUST HIT in 2013 GOAL: Pay off my student loan
$9466

#2 Potentially attainable 2013 goal: Pay off husband's old consolidation loan
$4994

Another tough thing about our situation is that I'm not sure if I'm going to need to buy a new car this year. It sustained some rear end damage at the end of last year that causes it to not look so nice and leak a bit into the trunk (don't worry, I've stripped out anything that could mold and the leak if very slight). I'm committed to continuing to drive this car (without fixing the damage, which would cost about half of what the car is worth) as long as we stay in our current location (I take transit to work, so it's really just a grocery getter). However, if we move, I am going to sell the car and at that point it would be unclear whether we could be a single car family depending upon proximity to jobs, etc. At this point, I just can't plan for this piece at all and it makes me really nervous.

Any advice on my situation would be appreciated! Good luck to all with your 2013 savings goals!

Alright, apparently it's details that get responses. Here we go:

Debt
Me (student loans): $9500
Husband (hereto known as J) (student loans): $57,000

Gross Income
Me: $3675/mo
J: average $1800/mo

Pre-tax deductions
Retirement: Me - 15%, J - 8% with 3% match
Transit: $100
HSA Contributions: $150

Take Home
$3400 (average)

Current Budget
Rent: $820
My student loan: $165
His student loan: $210 (bumps to $600+ in April after grace period expires)
Electric: $120
Cell phones: $80 (Yes, he has a smartphone. I have one too, but work pays for it.)
Internet: $30
Netflix: $8
Grocery budget (including pet food, etc.): $300
Eating out: $60
Gas: $100
Misc (gifts, vet, car repair, etc.): $300

Currently going into savings: $1100

My question is, what should I be doing with our savings? As stated earlier, I have a 3-month emergency fund in place. We are potentially moving this year depending on if/where J gets a job. I could also potentially need a new (read: decent used) car after we do.

Should I be working to pay down all of that hideous student loan debt? Individual loans that contribute to those numbers are as low as $2k, so I could be snowballing to knock out small chunks of our monthly payments. Or given how uncertain our situation is, should I just be hoarding cash in our savings account until we know what's going on?

Would appreciate any help you can give!

What's the interest rate on your student loans? If it's astronomical, then I'd focus on paying down at least the high-interest ones. If it's low or reasonably low, considering you have a bit of uncertainty in your near future (possible move, potential car purchase), extra cash can't hurt. If you end up not moving (or if your husband's future employer pays for relocation), then you'll have the extra cash then to put towards your loans or bump up your e-fund.

Mine's all at 6.3% and his averages out at about 6%.

That's another question--I can't seem to find any way to refinance his student loans at a lower rate. They are all Stafford federal loans. Is it just not possible to consolidate federal loans these days to a lower interest rate? I have friends who were able to consolidate federal loans with a private lender around 5 years ago to around 2.75%, but I can't seem to find that now.

I think consolidating loans just takes the weighted average of the current loans' interest rates (and then may also tack on a partial percentage).

If I were you, given the uncertainty with a potential move and/or need for a new-used car, I would emphasize savings. First step would be to get up to six months of expenses saved. That will take you at least some time to get there. Then reevaluate whether the move and car are becoming more or less likely than what you think now. Readjust your focus then. For now, don't get fancy with investing your savings or anything like that -- just keep it in a simple savings account, as you may need the money in what is considered relatively short term.

Does your company match anything towards your 401k? I would consider dropping your 401k down to the match just until you can put a bigger dent in those student loans before the grace period ends. That would give you a little more leeway once they reset and you can breathe a little easier even with the debt.

You don't say how much you have in retirement, but if you have SOME retirement money it's better than nothing, and you can give yourself a break and hope for gains until you can bump it back up to 15%. If they don't match (that sucks!), but maybe even then drop it just a smidge to get those loans down.

The rest looks good to me!

Peachy, my company's kind of funny in that 15% automatically goes into a SEP-IRA. I have no say over this. Of course, I am able to pull it out once it's there, but that's a pain and costs me some money in penalties.

FYI, I'm 25 and have a little over $12k in retirement right now. My husband is 29 and only has $10k (long story...).

Thanks for all the votes toward keeping my cash in a liquid saving account. I think that's good advice. It's just hard to look at that money sitting there and not think, "I could pay off 10% of my debt with that!"

Next time you hear that voice, imagine how you would feel if you paid off the debt with the savings, only one day before somebody smashed your car beyond usability!

Ugh, talk about financial set backs. We did our first run of our taxes in TurboTax and it looks like we're going to owe $1050 in federal and $200 in state taxes. We made a bit more this year and had significantly less in school expenses, but I didn't realize how big of an impact those things would have on our taxes.

The good news is that we have the money, but this definitely makes me see the importance of having a solid emergency fund. I guess I need to reevaluate what we're withholding.

Hi there- Sounds like you're in pretty decent shape that could potentially get better very soon. Congrats

You asked about what you should do with your savings. Because there's a good chance that you may need to dip into those savings within the next year and how bad interest rates are across the board, I don't think there's a great argument to keep it in anything more exciting than a money market account at this point.

Right, but your subsequent thought should immediately be to what you would have to do to squeeze out the necessary money should your car become unusable. Even in low-interest-rate times like these, quick money is usually pretty expensive

10% of your student loan debt is $7,000 less you're accruing interest on (vs keeping it in a money market account), which works out to roughly $30 a month in interest. Obviously, paying down debt is a good thing, and you certainly shouldn't treat the emergency fund as spending money, but that $30 is what you should be considering when the thought crosses your mind to drain it to pay off the student loans.

So the thing about taking a good, hard look at your finances is that, as positive as it is to know the real numbers, it kind of makes you feel like you can never get ahead. Unfortunately, my answer to this is usually “blow $50-100 so that I don’t feel poor.” This is definitely a version of “I’m feeling fat so I’m going to eat an entire bag of Oreos.” Obviously I know that neither of these are healthy or responsible choices. Luckily this time my need to spend exercised itself in the form of charitable giving for a cancer association car raffle, donations in lieu of flowers for two funerals, and supporting a former professor who is terminally ill. But still, in light of the below, I could probably have pruned back my charity.

These are the facts that are currently dragging me down:

Current savings: $7200; of this, $6,000 is my emergency fund that I would rather not pull from

Current monthly savings rate: $1100 for February and March; $700 from April onward

Known upcoming expenses (this is the killer):
$1000 for J’s final class due April 1 (includes tuition and parking fees; hopefully his book is still good from last year)
$1075 in federal taxes due April 15 (we didn’t withhold enough in 2012… gah!)
$200 in state taxes due April 15

Variable upcoming expenses: $300-$godhelpus for dog’s vet bills due in increments from April 12-May 24. Our dog has all sorts of somewhat serious but reasonably manageable (both in terms of effort and cost) health issues. This means, however, that he requires yearly blood work to ensure that the meds aren’t affecting his organs and so that he can get on steroids before his rabies vaccine. If all goes well, the panels, steroids, and shot will only be about $300, but if something’s wrong… well… we’ll see.

Sad realizations: I also realized that in order to truly have a 3-month e-fund that I needed $7500 in my “do not touch” pile to cover the new costs of J’s student loans. Sigh.

The worst part: This is where I admit that I’m going to spend gobs of money over the next six months BECAUSE I FEEL LIKE IT. I know, I know… someone save me from myself, but I’ve been living like a pauper for years and it’d be nice to get out once and a while, so...

$300 for weekend in San Francisco in March. I’ll be there for work anyway and J can stay for free with me in the company apartment over the weekend. All I have to pay for is a flight down and our meals to get a couple days away from it all to spend time with my husband. Seems worth it.

$500 for long weekend in Bellingham, WA/Vancouver, BC to see my sister’s campus and finally stamp the passport I’ve had for 3 years (end of March).

We also have a trip to PA/NY pending for my cousin’s wedding in August that would include visiting all my friends who have moved to New York and now work at Random House (darn them and their fabulous lives).

THE PLAN
So how am I going to pay for all of this, you ask? Here we go:
February: will end month with $1300 in total savings after paying for the SF trip.
March: will save another $1100, but will pay the $1275 in taxes. Also will pay for BC trip. End month with $625.
April: Oh no! Need to pull $400 from the emergency fund for J’s school, but will pay myself back and still end the month with $400 back in savings.
May-August: Hoping to pay cash for dog bills. Save as much money as humanly possible and decide at t-minus 6 weeks to wedding if we’re going. Hopefully J gets a job and we triple our income in June. If not, we likely won’t take the trip.

Wow—it feels good to have typed this all out. It also makes my plans look kind of insane. I will need to go back to the drawing board on a few of these trips. No reason to stretch ourselves so thin especially when we have so many things up in the air at the moment. Now, no more panic spending.

Bonus San Francisco trip for my husband has been cancelled. I'm proud of us for really looking at our financial situation and saying, "that's not feasible." Now we need to figure out the PA/NY trip...

I mostly came to my senses since my last big post. We downgraded our spring break vacation to just spending 5 days with the family (they live about 3 hours away) and a trip to the zoo. Much easier on the pocketbook.

We've navigated the taxes/school situation with about $500 left over to pay for our dog's upcoming vet bills. Feeling pretty good about this.

Back in February I did something that is perhaps a little rash--I paid off about $3000 worth of loans after Sallie Mae messed up my payment that month. About $1000 of that went to cover my February and March payments, so it was necessary, but the other $2000 paid off another loan in full (3 down, 2 to go). I need to learn to stop spending so emotionally, but I guess if I'm going to do it, it's better to pay off debt.

Unfortunately, this now leaves us with only 2 months of buffer in our emergency fund, which makes me a little uncomfortable. Still no word on the potential move this summer and there probably won't be for a while. Hopefully I'll be able to replace that money and add a little more before that happens.

Oh! And we had another sad but inevitable financial happening recently--$6300 in interest was added to the capital on J's student loans. Why on earth did we ever think it was a good idea to borrow that much money? The whole situation feels a bit hopeless at times, but I just keep having to tell myself that we'll dig ourselves out someday.