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When we were going over our family budget last week, my husband and I also talked about some financial goals that we have to accomplish. There are no ifs, ands, or buts, – we have to get it done.
For those unfamiliar with SMART goals, here's the basics on them:
- Specific: Choose a specific goal. Don’t say ’save more’, but instead choose ‘put aside 5% of my paycheck into my emergency fund.’
- Measurable: How do you know when you reached your goal? If you are saving an emergency fund up, consider setting aside 3-6 months of living expenses in the account.
- Attainable: Work on a few goals at a time so you don’t feel overwhelmed. Be gazelle intense on the ones you have.
- Realistic: Make sure your goal is something you can do and truly believe in. Have a plan of action that you can sustain.
- Time Based: By setting a deadline, you can work backwards and break down the steps into mini goals.
Here's my short list of what we need to do in 2012, only 3 goals, but they're big ones.
- Get our finances prepare should something happen to us.
- Purchase a family car.
- Pay down the student loan.
I’ll break each of them down into a SMART goal with numbers, and then I’ll give a basic strategy on how we’re going to accomplish it this year.
Financial Goal #1: Get Our Finances Prepare Should Something happen to us.
Ninja is right, dying sucks. However, this is something that has to get done and it has to get done right, especially now that we're parents.
We have to update and create a few documents to prepare for the unexpected. We don't want to put this off, so this will be the priority. If you can share what you did to get prepared, please share your tips in the comments.
The deadline we're going for with getting this done is February 29, 2012.
This project is a doozy. Off the top of my head, I'm think we have to get the following done:
- Update our will
- Create a revocable living trust
- Choose Guardian(s) for our baby
- Look at at increasing our life insurance policy coverage
We're probably missing a few more things, but we'll find out as we go through the process.
Financial Goal #2: Get a Family Car
You’ve seen building a car replacement fund mentioned a few times on this site. We would really like to avoid taking on a car loan for our next vehicle. To do this, we know we need to sock away a sizable amount of money to get a good car and not just a beater.
We've been saving up all through 2011 and we'll keep saving until we make the purchase.
We're looking for a family sedan (Accord or Camry size) or a small SUV (RAV4 or CRV) as the next vehicle. The deadline for purchasing a family car is currently by December 31, 2012 but I'd be happy if we can meet this goal sooner.
Basically the game plan is simple – save up money, shop around, buy the car. However there's a bit more to that process to make it work.
- Build up our car replacement fund.
- Whittle down what car we’re looking for.
- Spread the word about the car hunt.
- Shop around locally to find the best deal.
- Get a 2nd opinion (from a mechanic).
- Purchase the car.
It's going to fun to record this whole process this year.
Financial Goal #3: Pay Down the Student Loan
We have one student loan between us and its our only non-mortgage debt left. We didn't reach our 2011 goals, so it's my hope that we can do it this year.
I’d like to pay down our student loan principal by at least $2,000 this year. Our deadline for paying down the student loan is December 31, 2012.
We’re focusing on setting aside a percentage of any windfalls (tax refunds and work bonuses) and extra income through out the year towards paying down this debt. That's it – nothing fancy, just getting it done this year.
Thoughts on Financial Goals
Ok, we shared our family's goals, now I'd love to hear from you about your goals for next year. What are you financial goals for 2012?