Keep 403(b) contributions at 10%: Since starting to save for retirement in early October, White says she can feel the difference. Her biweekly paychecks are $183 less and she’s considering reducing the amount. Brown recommends she stick it out. By saving 10% she can grow her savings to more than $1 million by age 65. Just a 3% decrease can result in $300,000 less in savings.
Pay off student loans sooner: White is currently paying $230 a month on her $47,900 student loan balance. She is on a graduated payment plan, which increases her payment by 12.9% every two years. Under this plan, it will take her 20 years to wipe out the debt. Brown calculates that if White increases her payments to $400 a month she can pay off her student loans in 10 years. After funding her emergency account she can apply $175 from the $250 she was paying toward her credit card debt plus the $250 she is currently paying to pay off her studentÂ loans earlier.
“She is on the right path,â€ says Brown. “But because she is still finding areas to cut she should revisit her progress in about three months and see how she’s doing and make adjustments as necessary.â€