So 2 of my goals were moved to next year (529s and savings $15k), and I have shorten the 4th quarter goals to 3 (max 401k, pay of all debt (except mortgage), and not add new debt with the holidays).
My 401k is now maxed so no more money going to that.
I have one debt left - my son's medical bill. I entered October owing $12,898. I paid off $6,989 leaving $5,909. How did I do this? I don't even know. I was just really focused this month, my 401k contributions stopped, and there was an extra paycheck. I was so happy earlier this month when I broke $10,000. Now, it seems to be just melting away at a staggering pace.
I'll need to finalize the holiday budget with the wife. We will need to finalize our gift budget for Christmas, wine budget for Thanksgiving and Christmas, decide if we will be hosting a happy hour at our house, and decoration budget (tree, wreaths, etc.).
I can't help but to think where I was last year and my feelings of desperation. Financially, I was just holding things together. How did I get from where I was to where I am now?
I looked at my life with my wife and we said where do we want to be? We wanted to be in a place to not worry about bills and not having enough money at the end of the month.
That's a great goal but what does that mean? How do you achieve that? And that's were the yearly goals come in. What do I need to do this year to get me to that point or closer to that point?
Then I took these goals and broke them down further into manageable pieces. What do I have to do this month or even this week to set me up for success? Each decision brings you closer or further away from your goals.
You have to prioritize your goals too. Most of us don't have enough resources to attack all the goals at the same time. We need to focus and concentrate on one or two at a time and then move on from there. That is why I have had to move two goals to 2009.
Did we fall? Yes. Did we stay down and give up? No. But, we had a shared vision of the future.
Now, you hear people saying that getting on a budget and focusing on what is important frees up money you didn't know you had. Truthfully, at first, I didn't believe this. I got nothing how could I be wasting money?
Well, that's exactly what happened. By budgeting, money was prioritized and went to achieve very focused small goals. Once goals were achieved, more money started freeing up. It started to snowball.
Which brings me to where I am now. My snowball is attacking my last debt with a vengeance. My old car payments, credit card payments, wife's braces, and 401(k) deductions are all focused on the last debt. Really, the debt doesn't have much of a chance and that's what I saw this month.
Some of you are probably struggling right now and just can't see a way out. Basically, where I was last year.
So imagine if you could take all those monthly payments and focus them on whatever financial goal you have. What would you do with that money? How much better off would your family be? How much less stress and anger would you have in your life.
The budget just keeps you in line and the goals just focuses that snowball.
Goals Review - October
November 3rd, 2008 at 03:47 pm
November 3rd, 2008 at 04:11 pm 1225728676
What words of advice do you have for someone whose goals seem realistic at the time, but then the money bullets start pelting their little old enthusiastic selves? I keep saying "No new debt is a good thing. No new debt is a good thing." But I am so past that, that I want to avoid debt AND get rid of the debt I have. I am really in a POOR ME state right now.
November 3rd, 2008 at 04:29 pm 1225729795
Also, the weekly coincides with my paycheck.
Anything left over from the paycheck goes to debt reduction. And I would stay current on all and then the extra goes to the smallest. It won't be much, but you need to start the snowball somewhere.
Lastly, you really need your spouse on board. You will have your weaknesses during the process and will need him to refocus you and vice versa. In fact, I just put together my monthly reports for the boss…er…wife to review. Takes 5 minutes once things are running smooth.
The better communications also means less "gotchas". My wife knows the process so she will say I have this expense coming up next month that we need to budget for. It may mean less debt repayment but it means no new debt. As the snowball gets large, it's easier to absorb these expenses as they come up.
November 3rd, 2008 at 04:46 pm 1225730818
November 3rd, 2008 at 04:49 pm 1225730977
Thanks, merch - it is nice to know that once my plan gets off the ground, I can gain momentum and achieve concrete goals!
November 3rd, 2008 at 08:26 pm 1225743996
I think it is interesting how many debts you had and how much you are saving now. Kind of one extreme to the other.
Anyway, what a turn around! & very motivating to others...