Having a Plan is Important, also know your Goals

TUESDAY, JANUARY 13, 2009

Some people write blogs as a living, others just for fun, many are somewhere inbetween.  I started reading PF blogs because so much of the subject matter resonated with me.  I want to be more frugal, live a better life, and save more money.  Being part of the PF blogosphere seemed like a good tool to help me with my goals.

I melded blogging and personal finance together to develop some goals.  I mostly had these figured out already, I just hadn't articulated them.

GOAL #1:  
More saving, less spending.

PLAN: 
1)  No more buying things I want then paying off the credit card every month.  Pay with cash and when I'm out of cash I'm done spending.
2)  Save up for big purchases ahead of time.  Forking over a big pile of dough all at once really makes me aware of how much I am spending.
3)  Read personal finance blogs to keep up my morale and reinforce my good feelings about saving money and spending less.  Also to glean good ideas.
4)  I've lived off a cash spending allowance for years, keep doing that.
5)  Work extra hours when available and put the money towards savings.  (currently sidelined by minor injury)

GOAL #2
Develop a new personal finance blog.  This will be fun and add an element of accountability to my financial goals.

PLAN:

1)  Start blog.  (done)
2)  Not only read other blogs, leave comments both because I enjoy the dialog but also so that people will look at my blog.
3)  Read posts about how to develop a blog.  Some of those people are really experienced and have a lot of info to offer.  No sense reinventing the wheel.
4)  Keep a list of possible topics and start draft posts ahead of time.   That way good ideas don't get forgotten and bad ideas get a second look before they become public.
5)  Practice writing.  Like so many other things, practice makes better.
6)  Consider allowing ads on my blog for a tiny trickle of extra revenue.  Multiple streams of income are good!

GOAL #3  Pay off my second mortgage.  I owe $128,000 on a loan that was originally $138,000 twenty months ago.

PLAN:

1)  Make monthly additional principal payments.
2)  Increase monthly principal payments when my income increases. (I just increased from $300 to $500/month)
3)  Finish funding my emergency fund so I can start funneling more money to principal.
4)  Send part of all of any windfalls to principal.  This includes my income tax refund (or the two extra paychecks a year I get since I am paid biweekly).

GOAL #4  Finish saving for my emergency fund.  My goal it to have a minimum of four months of expenses saved.  
My monthly expenses (including my cash allowance) are about $5500 which I rounded up to $6000, therefore my goal is $24,000.  I have $23,000 now.

PLAN:

1)  Put money from my extra paycheck this month into savings.  Then this goal will be achieved!
2)  Continue to implement my plan to earn interest on this money instead of having it sit there and be eroded by inflation:  I am dividing up the money, every month another month's worth goes into a six month CD, plus one month liquid cash in savings.  My bank pays 1.16% for savings, 2.3% for 6 month CD.  I can still get the money if I need it all at once or within a few months if I have warning about needing it.  The main purpose of the fund is for if I become unemployed or cannot work due to illness or injury.
3)  Increase savings goal to 6 months of expenses once the second mortgage is paid off.

POSTED BY K-MONEY AT 3:25 PM
3 COMMENTS:

Money Funk said...
Some fantastic goals you've got there! PF Blogging is a great way to keep track of your journey (& meet some neat people). And you sound like you are heading on the right track! I look forward to further posts. ;)

JANUARY 13, 2009 7:23 PM
Miss M said...
I agree, you've got some great goals and you've already made a lot of progress. I need an emergency fund like you. I have savings and investments, guess what happened to the investments. I'm trying to get to $15,000 cash by the end of 2009 and hopefully $25,000 the year after.

I have no idea how to build a blog, I'm a newbie myself! I have adsense but unless you have a big readership it takes a LONG time to earn anything. You have to earn $100 to get paid out, after 3 months I'm only halfway there. But it's easy to implement and not too obnoxious.

JANUARY 14, 2009 6:30 AM
444 said...
Your goals and plans read almost exactly like mine (except the mortgage part, since I rent.) So there's a little comment for your blog; I bookmarked it, too. Leave a little comment and join my following, maybe? I'm brand-new and getting started, also. :)

JANUARY 14, 2009 4:01 PM