Well, I have been comparing my journey to get out of debt to the Boston marathon.

I first phase is to find a good pace. You don’t want to come out too fast or you’ll just run out of stem and quit. You don’t want to come out too slow because you’ll never finish. For each of us the journey is different. Some of us will finish in 2 hours and some of us will take 8 hours. And much like the Boston marathon people will be cheering us on regardless. “Come on!! You’re almost there!! You can do this!!!”

The second phase is when we find that pace. Ah, life is good, things are turning around. I CAN do this. We are cruising along and we can see the road ahead of us. The crowds are cheering and we feel good.

The third phase are the Newton hills. It’s really a stretch of 5 miles of four hills. The last hill is .4 miles long and rises 88 feet. This is where I am and am about to crest the hill. That’s right. This weekend I will be putting the last money towards my wife’s $4,400 medical expense that we just got billed on from last year.

The last phase of the marathon is 5 miles of little nasty hills, where your body is broken down and it just your mind pushing you on. I can see some of this course coming up. I have to allocate some money for a vacation in September because if I don’t work then I don’t get paid, by wife’s birthday party in Boston in August (I should be able to cash flow it), and my wants.

Yes I said it – My wants. I want a riding lawn mower for my acre of yard, I want a shed, I want a sprinkler system, my wife wants new furniture, my wife wants new clothes …. We know what we must do, but we still feel the pull and it’s getting greater the closer we get to the end of this phase.

Getting out of debt may not be rocket science, but it sure ain’t easy.

Time for team Merch to have a pep talk and keep the focus.

“Truckin, like the do-dah man. once told me you’ve got to play your hand
Sometimes your cards aint worth a dime, if you dont layem down,

Sometimes the lights all shinin on me;
Other times I can barely see.
Lately it occurs to me what a long, strange trip its been.”

I was reading a few blogs over the last few days and it seems that everyone seems to be hitting one of those patches where life is a little tougher then normal. I don’t know whether it’s the news, the economy, the weather, gas prices, food prices, whatever.

I could say “hey, everyone’s in the same boat.” Or “Yeah it sucks it’s _____ fault.” Please fill in the blank with president, congress, big oil companies, republicans, democrats, banks, or whatever.

The point is that we all get in these funks and the purpose is not stay in them. I truly believe that in the end, you are the one holding you down. Sure, you may have hit a stretch of bad luck. Sure Murphy is in my house taking up residence.

So how do I usually get out of my funks.

I first throw a pity party for one. I complain how life is not fair. I shouldn’t be in this spot. Everyone is out to get me.

Then, I will usually look at my long term goals (5 years out). Is this truly where I want to be? Does my plan still make sense? Are the steps to get there still correct? Do I have to add some steps because of this rough patch?

What’s next?

Work the plan. I need to take my first step. Is it a phone call? Is it a tough conversation in need to have? Is it doing more research on an issue?

What’s next?

I am executing a task list. I am starting to get back on track. Hope is starting to be restored.

This is where I am today. I got derailed with some medical bills of $4,400. It caused me to have a little pity party. Blaming hospitals and the insurance companies for screwing me. Then, I made a plan with a couple of tasks and started executing.

What’s next?

End of this week, I’ll be back on track moving towards my goals.

You don’t have to live the life you are living. But you do need a plan to turn it around. Never lose focus of your big goals.

And two of my favorite words are “What’s next?” I find that if I keep asking myself what’s next?, it keeps me moving forward, building the momentum.

So, what’s next?

So, June turn into July and I still have the blahs. The main reason is my debt snowball has stopped. Why? Well, I got hit with about $4,400 in medical bills from last August. (Just showing up now, come on!!)

I decided to just cashflow rather then add it to my debt snowball. So, it basically took me about a month to pay off, but I’ll complete this either this week or next week at the latest. So, logically I understand I am doing what I need to do and realalisticly this will throw me off a month. Whoopie, no big deal.

But my emotional side feels like I’ve been sucker punched to the gut. All my breath and forward momentum have been zapped.

I have reached my heartbreak hill.

But, it’s that guy in the mirror who rides me like a rented mule and keeps me focused and going.

Mirror: Hey! What’s going on?
Me: I don’t know. It’s been a tough month. I was suppose to have the car paid off and the braces. Sigh, none of that happened.
Mirror: Murphy showed up right?
Me: Yea, the guy just comes around at the worst times.
Mirror: Yea, he’s like that. He likes to throw you off your game. Shake you up.
Me: Yea I had a great pace and now I have to stop to clean up this crap that I thought was already taken care of. All my timeframes are shot. I am missing short term goals left and right. AAARRRRGGGGHHHH!!!!
Mirror: You’ve lost focus.
Me: What? No, well maybe.
Mirror: Should we scale back the goals?
Me: No, I think I need to just vent and let it out.
Mirror: You set now? ‘Cause, I got work to do!

So as I turned and walked away, I swore I heard:

C'mon man
And with the local DBT news, LL Cool J with a triumphant comeback
[mumbling]
but tonight...
Don't call it a comeback
I been here for years
Rockin my peers and puttin suckas in fear
Makin the tears rain down like a MON-soon
Listen to the bass go BOOM
Explosion, overpowerin
Over the competition, I'm towerin
Wreckin shop, when I drop these lyrics that'll make you call the cops
Don't you dare stare, you betta move
Don't ever compare
Me to the rest that'll all get sliced and diced

And with that Mr. Murphy:

Don't you call this a regular jam
I'm gonna rock this land
I'm gonna take this itty bitty world by storm
And I'm just gettin warm

This month had the good and the bad. I didn’t pay much debt back this month, but I did make good progress on life insurance and my will.

My goals for 2008 are:

1) Pay off debt (except mortgage) by October 1st
. DONE a) Pay off CC by April 1st
. DONE b) Pay off Car 1 by June 1st
. c) Pay off Car 2 by Aug 1st
. d) Pay off wife’s braces by June 1st
. e) Pay off son’s medical by October 1st
2) Invest $15,000 by year end
3) Invest $15,500 in 401(k)
4) Review and reallocate retirement funds by end of Q1
5) Will by end of Q2
6) Life Insurance by end of Q2
7) Save $4,000 for college by end of Q4

1) Pay off all debt but the mortgage by October 1st

Total Debt
06/26/2008 - $17,645 ($656 paid)

Car 2 (3.9% interest rate)
06/30/2008 - $929 ($0 paid)

Wife's braces (0% interest rate)
06/26/2008 - $1,716 ($156 paid)

Son's medical (0% interest rate)
06/09/2008 - $15,000 ($500 paid)

Wife's medical (Not included in total)
06/01/2008 - $4,498.52
06/25/2008 - $1,498.52 ($3,000 paid)

On April 17th, I wrote: “Somewhere between now and being debt free, there will be these hills that will test my resolve to the core.”

In the first quarter, I was finding my pace. By April and May, I was cruising along. Let’s add some more aggressive goals.

And then June hit. I got hit with a 1,500 medical bill, then 1,800, then 500, and finally 600. At the end of the month, I just got hit with 4,400 in medical bills. This is my Heartbreak hill. 4 consecutive hills. Once you get over one, there’s another one.

I knew this day would come and I know the next stage – Just grind it out. To make my goals, I just need to grind the remaining debt out over the next quarter, after I hit these hills.


2) Invest $15,000 by yearend
This will be started in Q4.

3) Invest $15,500 in 401(k)

Invest $15,500 in 401(k)
06/27/2008 - $10,210 invested

Right on target to finish this up in October.

4) Review and reallocate retirement funds by end of Q1

DONE

5) Will by end of Q2

DONE

6) Life Insurance by end of Q2

Took the physical and handing in my application. Just waiting for it to be reviewed.

7) Save $4,000 for college by end of Q4

Looking for 4th quarter on this.

Summary

Even though I am in the nasty part of my debt marathon (4,400 in new medical expenses and just having to grind it out this quarter), I feel good that I got the will and life insurance done. You see, this year (2008) is really about laying the foundation to my financial house. I feel good, surprisingly. I mean, if I look at 1 year or 6 months ago, I am in a far better place. I have traction and I just need to pull through.

So Murphy may have won this month, but the guy in the mirror is telling me to grind it out. So Murphy, enjoy the spare bedroom while you can. The guy in the mirror has me on point, focused, and fired up. So, I’m coming after YOU this quarter.

June 24th. So?

So, in 6 days, the quarter ends. That’s right half the year is over, gone. Next week, you will have less then 6 months to accomplish all of your goals for 2008.

Are you going to make them all? Why? Lack of focus? Lack of commitment?

5 years from, where do you want to be? What are you doing this year to get there? After you accomplish this year’s goals, what’s next? Every step you take, brings you closer or further away from your goals.

5 years from now, I have 2 goals. To be working on what I want to work on and investing in real estate.

My big goals for this year are easy: have a fully funded emergency fund and pay of all consumer and medical debt. I also have some other goals but these would be my 2 primary.

Next year, I will start paying down the mortgage to get it from a 30 year to a 15 year. It will probably take me more then a year to do this but you got to start somewhere. And how do you eat an elephant? One bite at a time.

Year 3 and 4 is to start saving up to buy my first property. And year 5 is to own my first rental property.

Each year builds on the next and each missed goal causes me to take more time to reach what is really important to me. And short term goals that do not support this are given a secondary status.

So 6 months down and 6 months to go. I am still on track for my big goals for the year, which dove tail to my big goal for 2009.

So time to reevaluate our long term goals and make sure all of our goals over the next few years are bringing us towards that master goal.

So let’s keep the focus people. No excuses.

I was reading Mom-sense’s blog and it struck a chord with me.

So, I owe $929 on my second car. I haven’t been paying it off. I have been putting the money aside to pay off in one lump sum. Well, I currently have over $12,600 saved and ready to go once I save up the rest.

Unfortunately, I have become quite attached to this $12,600. You see, it was brought a sense of security and safety. I know that the $12,600 well take care of almost any emergency including 3-4 months of being laid off. Especially in these uncertain times.

But alas, this money is not meant for the emergency fund. This money is meant to pay off the second car and help get us out of debt.

Now, the emotions start coming back of a little fear, stress, and anxiety. I’ll be back out there with a flimsy safety net. My wife was feeling the same way I was. Maybe we could keep it and just start saving for the car again.

As long as the fear and anxiety doesn’t rule you, it is good. The fear has caused to take a step back to re-evaluate where we are, where we are going, and what are priorities are. It also has helped to focus what are next steps are and general timeframes around those steps. And lastly, it has made us aware of some of the risks to our plans.

Re-evaluate and affirm – YES!!! Rule us – NO!!!

So in the next few weeks, this money plus another $929 will leave our accounts. What we will be left with is the memories of what it will feel like when we have no more debt.

So I thank you dear friend for helping us, but I must bid you ado in the next few weeks.

All and all a pretty good month. Executive summary: all lights are green and we are on target.

So, let’s jump into things, shall we?

My goals for 2008 are:

1) Pay off debt (except mortgage) by October 1st
. a) Pay off CC by April 1st
. b) Pay off Car 1 by June 1st
. c) Pay off Car 2 by Aug 1st
. d) Pay off wife’s braces by June 1st
. e) Pay off son’s medical by October 1st
2) Invest $15,000 by year end
3) Invest $15,500 in 401(k)
4) Review and reallocate retirement funds by end of Q1
5) Will by end of Q2
6) Life Insurance by end of Q2
7) Save $4,000 for college by end of Q4

1) Pay off all debt but the mortgage by October 1st

Total Debt
05/31/2008 - $18,301 ($4,756 paid)

Car 2 (3.9% interest rate)
05/31/2008 - $929 ($4,100 paid)

Wife's braces (0% interest rate)
05/31/2008 - $1,872 ($156 paid)

Son's medical (0% interest rate)
05/31/2008 - $15,500 ($500 paid)

I was hoping to pay off $5,500 this month, but it didn’t happen. I had camp, preschool, and a bike for the wife to pay for. And I used some money to shore up some budget items. Mainly, a party we will be having in August. I think it’s going to cost $1,500 to $2,000. So, I should start saving for that.
Still I am on target to pay off the second car and my wife’s braces this month.

2) Invest $15,000 by yearend

I am currently on track to start this one in September Looks like we will start hitting this in September. I upped this goal from $10,000. A little more aggressive, but what the heck. Aim for the stars and settle for the moon.

3) Invest $15,500 in 401(k)

Invest $15,500 in 401(k)
05/31/2008 - $8,621 invested

Right on target to finish this up in October.

4) Review and reallocate retirement funds by end of Q1

DONE

5) Will by end of Q2

Made the call to the attorney. I should have this completed end of June or July. So yes SCFR, I am finally getting it done.

6) Life Insurance by end of Q2

Just got a packet for additional life insurance. I’ll probably schedule the physical for this week or next.

7) Save $4,000 for college by end of Q4

This is also a new goal for this year. Aggressive – yes. Achievable - yes


Summary

I can’t complain. I seem to be achieving my goals while adding new ones. I added $9,000 in savings goals.

As long as I stay on point and focused, they should be achievable.

I have hit the 50% mark on my consumer debts. Yes, I have paid off over 50% of my debts. It’s more of a physiological thing then anything else. I am at the halfway point. Like a marathoner, it’s like getting my second wind.

But, I know up ahead is Heartbreak Hill. In the Boston marathon, there are four hills in succession right after mile 16 and going to mile 21. The last one is called Heartbreak Hill. Many a marathoner has “hit the wall” on Heartbreak Hill and dropped out of the race. At this point, everything is telling you to quit (your body, your mind),, but those crowds are egging you one. “Come on!!!! Only 5 more miles!!!” “One foot in front of the other!!!”

I know this is coming up. Somewhere between now and being debt free, there will be these hills that will test my resolve to the core. After Heartbreak Hill, until the finish, are just nasty little hills. You have used everything you got just to make it pace Heartbreak Hill and now you have these small nasty little hills where every step is an effort. At this point, it is the mind dragging the broken down body to the finish line.

And what do you get when it’s done? A medal. A little bronze medal for finishing. Was it worth it? You bet.

And that’s how I see my journey. I’m at the halfway point running through Wellesley College. Everyone is screaming and the real work is just about to begin.

The first half was mostly pacing my self as people pass me and get out of debt faster. But now I have my pace and feeling pretty good at the half way mark, knowing that soon it will be a battle of pure will.

And when I cross the finish line, what will I get? A little piece of paper generated from a computer in a billing department saying “PAID IN FULL”. And will it be worth it? You bet.

But until then, keep the pace, work the plan, and keep the focus.

It’s the halfway point of the month and I’m chillin’ like a villain. I can’t believe tomorrow is April 15th.

As I said before, the 15th is usually my stress time when all my big bills are due. This month was no different. I looked at my watch last night and it was the 13th and I just logged onto my bank account and paid them. No muss, no fuss.

Great feeling.

As you can see from my sidebar, I have paid of $12,803 just this month. Most of it was due to a large tax return but I plan on adding another $2,200 to payments this month (see if I can crack $15,000). So, now car 1 is paid off and am working on car 2. I have $7,129 left to pay off on it. The current schedule is to have it paid off in June with the wife’s braces.

Since I paid off the CC and car 1, I can start feeling the snowball gaining strength. I also feel some breathing room. Rather then treading water keeping my head up, I am starting to swim to the shore.

In fact, I have started dreaming, dare I say, of a debt free existence. Yes, I have calculated the time needed to pay of my mortgage, fully fund my emergency fund, fully fund my retirement accounts, and fund my kids college funds. It may be 5-8 years away, but I can almost taste it. I can almost see it. Dare I dream?

Yes, but now is the time to keep the head down and focus. No time to pat ourselves on our back. We got a lot of work to do before we get to these sweet dreams. A lot of work…

Bottom line: I have paid off $24,129 or 48.8% of debt to date.

Well every good plan hits some speed bumps. I am not saying that I went backwards or stopped, just slightly less process then I would have liked.

So, let’s jump into things, shall we?
My goals for 2008 are:

1) Pay off debt (except mortgage) by October 1st
. a) Pay off CC by April 1st
. b) Pay off Car 1 by June 1st
. c) Pay off Car 2 by Aug 1st
. d) Pay off wife’s braces by June 1st
. e) Pay off son’s medical by October 1st
2) Invest $10,000 by year end
3) Invest $15,500 in 401(k)
4) Review and reallocate retirement funds by end of Q1
5) Will by end of Q2
6) Life Insurance by end of Q2

1) Pay off all debt but the mortgage by October 1st

$6,000 CC (0% until May 2008)
12/31/2007 - $6,000
01/31/2008 - $3,543 ($2,457 paid)
02/29/2008 - $1,388 ($2,155 paid)
03/31/2008 - $0 ($1,388 paid)

Car 1 (4% interest rate)
12/31/2007 - $5,726
01/31/2008 - $5,317 ($409 paid)
02/29/2008 - $4,761 ($556 paid)
03/31/2008 - $4,264 ($497 paid)


Car 2 (3.9% interest rate)
12/31/2007 - $17,064
01/31/2008 - $16,432 ($632 paid)
02/29/2008 - $15,800 ($632 paid)
03/31/2008 - $15,168 ($632 paid)

Wife's braces (0% interest rate)
12/31/2007 - $2,652
01/31/2008 - $2,496 ($156 paid)
02/29/2008 - $2,340 ($156 paid)
03/31/2008 - $2,184 ($156 paid)

Son's medical (0% interest rate)
12/31/2007 - $18,000
01/31/2008 - $17,500 ($500 paid)
02/29/2008 - $17,000 ($500 paid)
03/31/2008 - $16,500 ($500 paid)

This month I had some extra expenses: summer camp for my son was $350, CPA $400, baptism for other son with brunch $250, and hockey and swimming classes for my son $200.

Given these expenses, I am still pretty happy with my progress and am still on goal for all my consumer debt. I am also getting a $13k refund that I’ll use for car 1, wife’s braces, and start attacking car 2. I checked the IRS website and my refund was mailed on the 26th so should be here pretty soon.
Bottomline: I paid off the credit cards before the rate adjusted from 0% to who knows what.

2) Invest $10,000 by yearend

After the debt is paid, we will start tackling this. I am hoping to start this in September. When I first put this goal down, I was thinking there would be no way I would get to this. To me, it’s all about having a roadmap with your goals prioritized and then focusing on the first one, accomplishing it, and moving on to the next.

3) Invest $15,500 in 401(k)

Invest $15,500 in 401(k)
01/31/2008 - $1,451 invested
02/29/2008 - $3,291 invested
03/31/2008 - $4,881 invested

I am very happy with this. I am still on schedule for the end of October and then I’ll roll the extra money into my holiday budget.

4) Review and reallocate retirement funds by end of Q1

I am putting in my trades today. I believe the market has bottomed and the volatility has decreased to a level I feel comfortable with.

5) Will by end of Q2
6) Life Insurance by end of Q2

These two steps are going a little slower then I thought they would. I’ll have to just clamp down and get through this. My cash flow is improving so l should be able to float the lawyer fees and insurance premiums. I just need to get on them.

Summary

All and all, I’m pretty happy. We had some extra expenses this month and yes some of it was discretionary. But, the good news was we were able to absorb it. The big accomplishments this month are I get to cross of 1a and 4 from the list.

It’s a few days early, but I decided to go ahead with my mid month update. My February one, I was feeling like I might not be able to pay down the debt as quickly as I thought. At the end of the month everything worked out and I has a few hundred ahead of target.

Well, last week was one of those stressed week where Murphy puts you to the test. We had my son’s baptism and family had to stay over. This included a donation to the church ($100) and additional food and wine for dinner (people stayed over or house - $150) and party (small brunch party - $75). So, I had to borrow from some envelopes to scrap the cash together. And a very stressed wife. No new debt – I’ll take my wins where I can.

So we are closing in on the second week of March and I am actually feeling pretty good. With the paycheck I am getting tomorrow, I well have my envelopes funded where they need to be, a $1,000 in the CC envelope, and $416 in my 401(k).

This should put be on target to pay my minimums plus another $2,000 towards debt, eliminating my credit cards before they start charging interest and starting on paying down the first car.

I also sent in my taxes this week. Bad news – cost $400 for the CPA to do it, good news – we’re getting $13,400 back between state and local. This is mainly because when I switched jobs they screwed up my medicad withholdings and I paid double.

So, I hope that I’ll get my tax refund in April and most of that will go for debt. I’ll probably skim off about $1,200 for TruGreen to take care of my lawn this summer. The one that services my neighborhood really does a good job and it makes a huge difference. That still leaves $12,200 to go towards debt reduction then in May we get the tax credit. I’ll get $1,800, which will go towards debt.

I am basically hoping that by end of June I’ll have the CC, car 1, car 2, and the wife’s braces paid off. So, I’ll be able to snowball everything into my son’s medical.

So far, March is looking good. Looks like by end of June, Murphy’s family will be gone. Murphy will still be at my house, but I told him that he’ll have to find a new place by end of the year. But you never know with Murphy, he’s a tricky guy and once he’s in your house he’s tough to get rid of.

When I first created my goals for the year, they seemed difficult. Since I’ll be starting my 5th monthly budget this weekend, these financial goals now seem easily attainable.

My goals for 2008 were:

1) Pay off $6,000 CC by May 1st
2) Pay down car 1 by Aug 1st
3) Invest $10,000 by year end
4) Invest $15,500 in 401(k)
5) Review and reallocate retirement funds by end of Q1
6) Will by end of Q1
7) Life Insurance by end of Q1

My new goals are:

1) Pay off debt (except mortgage) by October 1st
. a) Pay off CC by April 1st
. b) Pay off Car 1 by June 1st
. c) Pay off Car 2 by Aug 1st
. d) Pay off wife’s braces by June 1st
. e) Pay off son’s medical by October 1st
2) Invest $10,000 by year end
3) Invest $15,500 in 401(k)
4) Review and reallocate retirement funds by end of Q1
5) Will by end of Q2
6) Life Insurance by end of Q2

So, how are we doing with these new goals?

1) Pay off all debt but the mortgage by October 1st

$6,000 CC (0% until May 2008)
12/31/2007 - $6,000
01/31/2008 - $3,543 ($2,457 paid)
02/29/2008 - $1,388 ($2,155 paid)

Car 1 (4% interest rate)
12/31/2007 - $5,726
01/31/2008 - $5,317 ($409 paid)
02/29/2008 - $4,761 ($556 paid)

Car 2 (3.9% interest rate)
12/31/2007 - $17,064
01/31/2008 - $16,432 ($632 paid)
02/29/2008 - $15,800 ($632 paid)

Wife's braces (0% interest rate)
12/31/2007 - $2,652
01/31/2008 - $2,496 ($156 paid)
02/29/2008 - $2,340 ($156 paid)

Son's medical (0% interest rate)
12/31/2007 - $18,000
01/31/2008 - $17,500 ($500 paid)
02/29/2008 - $17,000 ($500 paid)

I am actually a few hundred dollars ahead of my targets.
One of the things I have not talked about was that I switched jobs and the firms took out double the FICA, so I will be getting $12k back from the government. I expect the check to either come in April or May. My CPA is currently finishing the forms.
So once this check hits, I plan on eliminating debt for car 1, my wife’s braces, and make a huge dent in car 2. So end of May, I plan on owing less then $1,000 on car 2 and my son’s medical will be the only outstanding debt (minus mortgage).


2) Invest $10,000 by yearend

After the debt is paid, we will start tackling this. On hold for a few more quarters.

3) Invest $15,500 in 401(k)

Invest $15,500 in 401(k)
01/31/2008 - $1,451 invested
02/29/2008 - $3,291 invested.

This is kind of where Dave Ramsey and I disagree. I can not bring myself to stop contributing to my 401(k) while I pay off debt.
So, I am about 21% done with this. This should be complete by November 1st. Then, I’ll use the extra money for holiday stuff. Wine for thanksgiving and Christmas, presents, tree, etc.

4) Review and reallocate retirement funds by end of Q1

I have everything set to go. I was just waiting for the market to become a little less volatile. I will probably due this towards the end of next week. I have a spreadsheet set up to show me the trades. I just need to update quantity and price, then execute the trades.

5) Will by end of Q1
6) Life Insurance by end of Q1

I wanted to talk to my CPA first and I did. I have interviewed a few lawyers and found an estate one I like. The next step is for me and my wife to really talk about what we want, then we will probably talk to the guardians for our children if we were to die, and then we will talk to the lawyer to draw up everything.

I am pretty happy so far. It hasn’t been easy these last 3 months. We have really focused on where our money is being spent. I feel I am just starting to get some traction. I can see things starting to come together, but I am still a little apprehensive.
Time to keep the focus and give the troops a pep talk.

So, I have a spreadsheet that tracks all my debt except the mortgage. I have everything bucketed by month and what I plan to pay off and when. I have a regular and aggressive payment sheet. The theory on the regular is that the are realistic numbers and if I stay on track I should hit them. The aggressive numbers are a motivational tool. Just out of my grasp but attainable in a perfect world (barely).

Well, after much debating internally, I have decided to redo my goals. I am dropping regular plan and adding a super aggressive plan. I don’t know how I’ll even come close on the super aggressive plan, but the goals on the regular plan were being easily accomplished.

1) Credit Card Debt (0% until May 08) – Balance 1/1 – 6,000

Regular: April 2008
Aggressive: March 2008
Super Aggressive: February 2008

2) Car 1 (4% interest rate) – Balance 1/1 – 5,726

Regular: July 2008
Aggressive: May 2008
Super Aggressive: March 2008

3) Car 2 (3.9% interest rate) – Balance 1/1 – 17,046

Regular: February 2009
Aggressive: September 2008
Super Aggressive: July 2008

4) Wife’s Braces (0% interest rate) – Balance 1/1 – 2,652

Regular: March 2009
Aggressive: September 2008
Super Aggressive: April 2008

5) Son’s Medical (0% interest rate) – Balance 1/1 – 18,000 (estimated)

Regular: August 2009
Aggressive: January 2009
Super Aggressive: September 2008

Let’s see how this works. Strive for the super aggressive plan and settle for the aggressive. Keep the focus!!! I don’t know how I’m going to do it, but that’s the challenge.

My goals for 2008 are:

1) Pay off $6,000 CC by May 1st
2) Pay down car 1 by Aug 1st
3) Invest $10,000 by year end
4) Invest $15,500 in 401(k)
5) Review and reallocate retirement funds by end of Q1
6) Will by end of Q1
7) Life Insurance by end of Q1

So, how are we doing? Good in some and procrastinating in others. Probably par for the course.

1) Pay off $6,000 CC by May 1st

12/31/2007 - $6,000
01/31/2008 - $3,543 ($2,457 paid)

Nice. I might be able to pay this off by end of March. 2 months early. Keep the focus.

2) Pay down car 1 by Aug 1st

12/31/2007 - $5,726
01/31/2008 - $5,317 ($409 paid)

Well, if I can keep up the pressure and the focus, I might be able to pay this off by end of May. Nice.

3) Invest $10,000 by year end

Yea, well, you know… I’ve been real busy lately. Seriously, once car 1 is paid is will get attacked. On hold now but itching to start.

4) Invest $15,500 in 401(k)

01/31/2008 - $1,451

Right on target. Looks to complete in middle of November. (A little boost in income around Christmas by not having the old 401(k) deducted from the paycheck.)

5) Review and reallocate retirement funds by end of Q1

I have reviewed the allocations and mine are all out of wack. I have set up a spreadsheet to figure out the buys and sells automatically. I am just waiting for some of the volatility to leave the market. No sense rebalancing if I need to rebalance next quarter. I like to do it once or twice a year. So ready to go, just waiting.

6) Will by end of Q1
7) Life Insurance by end of Q1

These last two items I believe go hand in hand. I might push these off to Q2 because I want to get some advice from my CPA, and I definitely don’t want to rush it. I figure work out the general plan with the CPA (how the trust and wills work together for tax purposes) and then have a lawyer fill in the blanks. Now, I’m not a millionaire; but once I throw in life insurance for me and my wife, my estate’s value goes up considerably.

All and all, I think I am pretty much on target to get all my goals accomplished this year. In fact, I have two other goals I might add: pay off a second car ($16,432) and my wife’s braces ($2,496).

The funny thing was that when I started putting together my goals for 2008 in December I thought that they were tough and it was going to be a stretch to achieve. After the first month of January, I’m ready to add more goals to the list.

I was watching Myth Busters over the weekend and they had a show where they were talking about how lead balloons can not fly. When you’re looking at material make a balloon, 2 characteristics come to mind: strong and light. Lead is neither. Lead foil rips easy and is 6 times heavier than aluminum foil.

In the end, the built a 10x10x10 cube and inflated it. All the time repairing rips. Make sure the various sides weren’t rubbing against each other. After it was inflated, it rose to the top of the ceiling and yes the lead balloon floated.

Sometime when I think of my finances, it seems that I am trying to get a lead balloon of the ground with debt and financial obligations being the weight of my balloon. The rips occurring so easily are my old spending habits.

So how do I get a lead balloon airborne? Well, I’ll follow what the Myth busters did.

1) Have a plan – So my plan is to start shedding debt. The order will be credit cards, my car, wife’s car, wife’s braces, and son’s medical. Basically it is from highest interest rate to lowest.

2) Implement the plan, working each step of the plan – In other words, concentrate on the first step. Let’s get the credit cards paid off before worrying about sending more to the cars.

3) Plan for the catastrophic risks – I may not know what the risks are, but I can plan for what happen when they occur. I have a budget that should take care of most things (car maintenance, house maintenance, etc.). I also have an emergency fund to go above and beyond this. I haven’t tapped into since I started a budget.

4) Review progress of the plan –
Now, you can review your progress to your plan. Is too aggressive, not aggressive enough?

5) Make adjustments as necessary – Little bumps are to be expected. Just rework the plan and make the small adjustments you need to.

And this is how I plan to fly my lead balloon. Tears rips and all, my toxic shining balloon will rise

First of all, thank you all for your comments.

I have been struggling with my goals this week. Good comments all around. Pure logic and rational me agrees completely with DisneySteve. On the other hand starting this year I will be paying for my own insurance ($1,258/month) and repaying the hospital ($500/month on about $16,000). So I think the smart thing is to increase my financial stability in the first half of the year and then start saving in the second half.

So my financial goals are as follows:

1) Pay of $6,000 in CC by May 1st
2) Pay of one car by August 1st (currently $5,700 is owed and last payment is 2/09)
3) Invest $10,000 by year end in Taxable assets
4) Invest $15,500 in 401(k)
5) Review and reallocate (if necessary) retirement funds by end of Q1

The only reason why number 4 is so low on the list is because I have been doing this every year for the last 5 or so years. So, I’m basically already set up for this and won’t feel the pain. Nothing like autopilot.

1, 2, and 3 all feed off of each other. If I can do 1, that money will roll into 2, which will roll into 3. I just need to do 2 things: Be more frugal and more disciplined.

So personal goals:

1) Be more frugal
2) Be more disciplined
3) Enjoy life a little more

So, these are my goals. I’ll track them here and see how the new year goes.

Well, I’ve been going over my goals for 2008 and have been struggling with whether to reduce my debt or save and invest the money I would use to reduce the debt.

Let’s start with the easy stuff. I have some CC debt (about 6k with 0% interest until May). That will be paid off by May, hopefully J. No way I could earn more investing then the CC interest, unless I get in the ground floor to a pyramid scheme.

Now it starts getting harder. I have 2 car loans that are 4% and a medical bill that’s 0%. I also have a 30 year fixed mortgage at 5.5%.

Theoretically, I could save and invest and make more money then I would need to pay out for the cars and the medical, letting those 3 payments end a natural death.

The mortgage has a low interest rate over 30 years, has a tax advantage for the interest paid, and if I put the money into diversified stock funds, I could almost double the return and still take advantage of the tax credit.

Woo Hoo!!! No brainer!!! All aboard the investing express!!!

As I said before, theoretically looks good on paper. The answer has to be more complex then this. So I go to Sir Google and ask him. He returns about a gazillion articles each with a different answer. Ok maybe 2 answers: payoff mortgage and don’t payoff the mortgage, and most article slanted to not pay off the mortgage.

One of the articles was from a financial advisor from either Morgan Stanley or JP Morgan. He stated that his clients that paid off the mortgage retired 10 years earlier then clients that didn’t. How could this be?

The answer is quite easy: Life happens. So, let’s say we have a mortgage of 350k. We start saving and investing money. After a few years, we saved about 75k. During that time, we have foregone new furniture, expensive vacations, and our cars are needing to be replaced. Well, we could use some of that money for these things we “need”. Right? And there is the trap. There is a huge temptation to use that money. After all, what’s a few thousand dollars? You’ll make it up next year.

And that’s the answer. Most average people, myself included, don’t have the discipline necessary to leave that money alone. It’s just too tempting.

If you pay down the mortgage every month, you don’t see the wealth accumulating and it’s a lot easier to forgo the temptations.

With what to do about the mortgage answered, all my other answers are easy. Pay off all debt!!!

One last thing, I plan to live in my house for the next 20 – 30 years. If you are in a starter house or plan to move in the next 5 years, you might want to use the extra money to save up for a bigger down payment for your next house.

Well, that time of year again. Time to start thinking about my New Year’s resolutions or goals for 2008.

I am determined not to fail this year (sound familiar?). Why is this year going to be different then other years. Because I am going to try not to make the same mistakes.

Easier said then done. I am about to do my second monthly budget, and I feel the tugs of my old ways. Due it next week, relax, enjoy the family and holidays. It will get taken care of.

Luck for me, my wife is “encouraging” me to complete next month’s budget. I call it nagging; she calls it supporting.

So my goal is to me debt free in 2008!!! Sounds great. We’ll that was my goal in 2007 and 2006 and 2005 ….. But this year will be different!!! So was 2007 and 2006 and 2005 ….

So how is this year going to be different?

Achievable goals that cause me to stretch – OK maybe not all debt. I don’t think I’ll be able to bay off a mortgage that is more than my gross salary for the year. So maybe I’ll need to refine it to something more manageable.

Plan – There is a saying I like “Plan the work and work the plan.” The largest reason I have failed is because I will make a goal but not have a plan to achieve the goal. This year I’ll put together the budget monthly to achieve my goal.

Out of sight, out of mind – This year I’m not going to put my goal in a desk drawer. I’m going to keep it somewhere visible where I will be reminded everyday, maybe my bathroom mirror.

Feedback – I need to update these goals monthly probably at the same time I look at the budget for the next month.

No Accountability – This is where the wife comes in. She’ll be nag … er… encouraging me all year.

To do’s this week:

1) Determine goals
2) Plan goals
3) Post goals on mirror
4) January Budget with goals in mind

So much for an easy week, I got work to do. Good luck to everyone and may your goals be attainable and enjoyable.