(MONEY Magazine) -- Maria and Sam Hill, ages 29 and 32, have been married only a year and a half, but they're already thinking well into the future.
The couple, who now rent a two-bedroom apartment, dream of owning a four-bedroom house and filling it with two little Hills.
In the longer term, Maria, a recruiter, would like to follow her father's path and retire at 51. Sam, a city planner, hopes to quit at 60.
Standing in their way: a shortage of cash. While he's contributing 10% of his pay to a 401(k) and she's putting $500 a month into a savings account earmarked for retirement, they aren't stashing nearly enough to leave work as early as they'd like, says Cincinnati financial planner John Ritter.
Also, hampered by $30,000 in credit card and student loan debt, they haven't started saving for a house.
"We want to get out from under that cloud," says Sam. Fortunately, the Hills make a solid income -- $117,500 -- that should allow them to erase the debt quickly, says Ritter. Then they can focus on the house and early retirement.
1. Get out of the red. The Hills think they can cut costs by $300 a month -- maybe by eating out less or moving to a cheaper apartment. If they put that toward the debt, on top of the $1,400 they're now paying. they can clear it in 21 months, assuming they pay the credit cards first. The student loan rates are low, but still higher than what they'd earn on cash.
2. Save for a down payment. Once debt-free, they can redirect $1,700 a month to their house fund. "At minimum, they'll need 10% down," Ritter says; that's $15,000 based on prices for four-bedrooms in the area.
3. Bulk up on retirement. To stop working when Maria is 51, they'd need to bank more than half their income. (Her dad had a pension.) But they could retire when she's 60 if, after completing the steps above, they save 19% and she uses her 401(k).
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