Happy New Year and Best Wishes for 2008

I voted for increasing income. Increasing income, with enough discipline to avoid spending the increase, makes it easier to increase savings, pay off debt, etc. Bonus: if the income is sustainable and not from your job, you are that much closer to early retirement!

Well Sara, generally it would be a good idea to improve your debt to income ratio as you mentioned, and if you can easily afford to pay it off, that is a good start.

But, if paying that $5,000 would impact the amount of down payment you'd be putting on the house, it may not be as good of an idea to rush on paying it off. The same goes for if taking that $5k out of savings would put a sizeable dent in your emergency savings.

So, examine the options and make sure that if you pay off that debt, it won't strain another part of your finances. That amount of debt probably won't make or break a mortgage deal.

But when you begin shopping for a lender, talk to them about it. I know when we were going through the home buying process, our lender sat down and went over our credit reports with us, told us which debt we should pay off to get a better rate, or how much more we could get approved for, etc.

Um, all of the above. Yes, I'm serious. With an impending move, I would rather buy a house than rent. So here is a question for you. I know how much you qualify for with your home loan has to do with your debt to income ratio. Let's say I have a credit card with 5k on it and I have money in saving to pay it off. Should I pay that off before I apply for my home loan?

And I also would like to achieve all of the others as well.

Looks like I'm just like most other people, retirement savings!!

I am with Frugal. My goals include retirement savings, boosting my emergency fund, and saving for a vacation.

I suppose retirement savings is the "biggest" goal in the sense that it will require more money saved, but it's also something that's largely automated through my 401(k).

Saving for vacation will probably take the most effort, since it's not completely necessary. I can see myself justifying putting the money towards other things since it wasn't intended for a "serious" goal like retirement or emergency fund.

I really cannot vote for a single "big" goal. It is important to me to increase both my retirement savings (I have not maxed out either my 401k or Roth IRA contributions) and my emergency savings. Part of doing both of these is to increase my income as well. So all three of these are important and interrelated to my financial plans.

Increase my income. I will increase my retirement savings as well, but I was already coming close to maxing out. So if I can do it on the current income level, I would like to increase, which will give me more options. I plan on applying for a new job, which would pay more if I get it, and I plan on trying to increase my income from blogging, which has been increasing the last few months. We'll see what happens! Good luck to you and your wife in reaching your goals in 2008! :)