goal tending

In continuing the theme from Wednesday's post, we're going to sail on into Financial Literacy Month with more tips. This weeks FLM topics seem to be centered around goal setting and goal tending. Ironically, I was listening to the Man versus Debt podcast yesterday and Baker interviewed a blogger who believed in a "no goals" theory.

I'm not sure yet whether goals are for me, but perhaps that's because I have a hard time setting realistic goals. Or even if the goals themselves are realistic, I can't deal with slow results. I'm a "needed it yesterday" kind of person. I want immediate results, whether it's in my finances, weight loss, the house, etc. So as you can imagine, I'm often disappointed when things don't happen as fast as I think they should and I abandon whatever the goal/resolution was. I'm honestly surprised I stuck with the Lenten goal (for the most part) even when I wasn't able to make big dent in the debt overall.

But back to Step 12: Set short, mid, and long-term goals. Their default goals are: Pay down debt (short), establish emergency savings (mid), and Retirement (long).

My goals would be:

Short (one to two years): Build our emergency savings back up & save for a new car

Mid: (two to five years): Pay off credit card debt (we established back in February this would take me at least four years)

Long: Continue contributing to my retirement accounts and increase the contributions back to 10% once the debt is paid off. Establish a solid long-term savings. Sell our house and buy one I actually like in Atlantic County.

Step 13 of FLM covers a topic we're super familiar with around these parts: methods to pay down debt. They provide the examples of Debt Snowball (lowest balances first) and Debt Avalanche (highest interest rates first). I'm not one to beat a dead horse, so here's a handy debt pay-down calculator if you're interested.

Moving right along... we're going to bang out Steps 14 & 15 today as well, since I'm a bit lax on the weekend blogging.

Step 14 talks about the importance of an emergency savings account. This is an area I've been worrying a lot about lately, since our savings was wiped out after the bat removal. If we hadn't just received our tax return, I don't know how we would have managed. I know most financial websites recommend saving three to six months of living expenses which would put us somewhere between $7,377 & $14,755. Yow-za. I think we have $1,300 in the account right now (all thanks to the hubs).

Step 15 makes me feel better since it's about preparing for retirement and I'm all over that. Prior to this debt paydown journey, I was contributing 12% of my salary to a Roth IRA and a Deferred Compensation plan. This was in addition to our mandatory pension contributions (which, to be honest, I wish I could just opt out of since I doubt NJ will have the money to pay it back to me when I retire). For now, I'm contributing 2% while I focus on knocking out my debt, but I'm look forward to getting back to fully funding my retirement accounts once my credit cards are wiped out. The Hubs also contributes a lot (I don't know the percentage off the top of my head) towards his 403(b) plan so we're on track to spend our retirement golfing (him) and at the beach (me).

What are your financial goals? Do goals motivate you or do you get discouraged like me? Any tips for better management?