My One Page Financial Plan

There’s a new personal finance book floating around – The One-Page Financial Plan: A Simple Way to Be Smart About Your Money. While I actually haven’t read this book I like the concept the title suggests: keep your financial plan to one page!

I was able to very easily come up with my own one page financial plan which consists of just two big goals!

Here’s my financial plan in order:

Pay Off the Mortgage

We recently bought a house, unfortunately our last house still hasn’t sold yet. Because of this I haven’t been making any extra payments on the new mortgage yet. Instead I’ve just been siphoning all extra cash into savings. I’m hoping that the house will sell within in the next six months. (We’ve had several showing and no offers yet!)

If it doesn’t I’m going to have to stop saving money at some point and instead work on some of my other goals.

My first goal is to pay off the new mortgage. Our mortgage payment including property tax and insurance is $944 per month. If I were to pay an extra $1,000 per month I can have this house paid if in 8 years!

Since the first house is currently costing us around an extra $500 per month, for the mortgage payment and utilities, just by selling that house I’d free up an extra $500 to go toward this goal. Plus, as is I’m saving around an extra $1,500 – $2,000 per month right now.

As long as my income stays at $4,000 a month or higher I should easily be able to pay off the mortgage in 8 years. And if my income stays close to what it is now ($5-$6k/month) and I pay an extra $2,000 per month on the mortgage I can have it paid off in a little over four years.

Goal: For now the goal is to pay off the house in 8 years. I’ll see how that feels and will then see about accelerating the payoff process.

Goal start time: When the other house sells or six months from now – whichever is sooner. By this time my level of savings should be high enough to make me feel comfortable.

Also, I plan to keep saving for retirement, the girls’ college, and investing in dividend stocks with small incremental increases while I attack the mortgage.

Increase Retirement, Taxable, and College Savings

After the mortgage is paid off and assuming that I’m still earning money then I’ll take that mortgage payment we were already used to paying and divide it between retirement, taxable investing, and college savings.

Why My Goals Are In This Order

I know a lot of people think it’s a horrible idea to pay off a mortgage with a low interest rate when you could earn more money by investing. But here’s the thing: I don’t care.

If you’re new here I recently got remarried. I now have the luxury of living in a two income household. I’m always worried about the future of my income since I make money online and the internet is always changing.

If we were to pay off our mortgage we could comfortably live on Jamie’s income alone. That would take some weight off of my worrying shoulders. Jamie is not interested in early retirement. In fact, he like his job and I imagine he would be bored out of his mind if he didn’t go to work every day.

He works for the state and has good benefits. He covers the health insurance for all of us, has a pension plan, and has also been contributing to another government retirement plan for a long time. His retirement income alone could support us.

What I’m saving is just icing on the cake.

That is why I want to pay off my mortgage first and then focus more on investing and not the other way around.

What’s your one page financial plan?