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My husband and I also talked this past week about some financial goals that we have to accomplish.
For our first goal, we have a pretty thought out plan and for the second one I'm looking at how I want to accomplish it. The third one, though, is a bit up in the air.
Unlike other years, these goals are somewhat tied together:
- Knock down this student loan: We're looking at getting rid of this student loan in a couple years instead of stringing along the payments over several years.
- Increase my income: While 2012 had kept me busy at work, it was only a slight increase from the previous year. I want 2013 to be better.
- Build a third source of income: We had a plan to combine our talents on a income generating projects for a bit, but haven't really done anything. We want to do something together and earn money doing it.
By working on the second and the third goals, we hope to have a bigger impact on our first.
Goal #1: Knock Down the Student Loan
We will start off with our first goal – paying down the student loan. Last year we sent in $3,244 for an average of $270/month going towards the student loan.
Starting in January, we will have a minimum of $330/month being directed towards the student loan, which means we'd have the paid off in 5 years and 8 months, saving us around $5,400 in interest.
I decided to get an idea of how much it would take each month to pay off the student loan at a faster pace.
- To pay it off in 2 years, we'd need to pay an average of around $800/month.
- To pay it off in 3 years, we'd need to pay an average of around $550/month.
- To pay if off in 4 years, we'd need to pay an average of around $400/month.
For any of these faster time tables to happen we would need a build a bigger debt snowball. There are basically two ways to do this – decrease our expenses and increase our income. Our next two goals for the year will focus on the latter, so let me share some of our plans to address the former.
Looking at our monthly expenses, there are some bills that I believe that we can lower.
- Eating Out: When looking at the food bills, eating out took a big chunk of our money. Too many little purchases here and there added up. In 2012, we spent around $2,100 eating out for an average of $175/month. I'm going back to using cash when I eat out. There is no way around it – I spend less with cash than with my debit card. My goal is spend no more than $80/month on lunches and coffees out. Less would be better of course, but I want to put a number on it so I can shoot for a goal.
- Food/Groceries: Last year we spent around $370/month on groceries, which is not bad in my opinion. If we eat out less then that would mean that our groceries would go up. My goal is to keep groceries about the same, but get more for our money. To accomplish this we have to be more purposeful with our grocery shopping, less weekly trips except for only the perishables. Eat what we have in the pantry and the fridge instead of picking up a few extras at the store.
- Selling the VW: The Jetta is on the market and I'm hoping it will be sold sooner rather than later. Not only would that get us some cash, it would also decrease our monthly expenses by a bit as we don't have to pay for insurance on the car. It's only $30/month, but that can help us cut down the time on the student loan being paid off by 6 months.
We'll continue to look at ways to cut our expenses so we can put that towards our debt.
Goal #2: Increasing My Income
Quite simply, I'd like to increase my income by 20% this upcoming year. The idea is to use this money for our first goal and get the student loan eliminated if possible.
My plan right now to accomplish this goal a couple of things. The first is to sell a site or two that I currently own. I have one site in particular that I'd like to sell. I update it occasionally and it generates a bit of income, but I'd love to focus my attention on my personal finance site.
The deadline for selling my site is by the end of May. I think that will give me enough time to tweak the site ot make it attractive to potential buyers and leave enough of the year for me to work on my other sites.
Start a Third Income Source
The main focus is to just get it started. We've stopped and started a few times back and now we want to get this accomplished.
Again, the idea with this goal is to take whatever income and funnel it in with the student loan.
Thoughts on Financial Goals
We'd some of our goals for next year; I'd love to hear of some of your financial goals. What is the biggest goal you'd like to achieve?