These are not resolutions for the new year, or even grand plans for my entire life.  Instead, this is simply a public statement of what my current financial goals are for the short term (calendar year 2008).  This is an effort by my to do several things.

First, a goal is not a goal unless it is shared and preferably written down.  The process of writing down and sharing a goal forces it be a concrete idea, fully thought out.  Sharing it with others, provides a level of accountability higher than keeping it to myself.

Second, documenting it this way allows me to come back later and measure how difficult these goals were and how close to achieving them I got.

Finally, it is a way for me to share with you, my readers, a little bit of what is going on in my life so that hopefully you can get a little bit better understanding of me and how I think.

Goals

  1. Build up a $1000 emergency fund.  Being unemployed for the last six months of 2007, my emergency savings were wiped out.
  2. Pay off my $12,000 in existing credit card debt.  After going through my emergency fund, I fell back to credit during my job search.  Once I have a basic emergency fund, it will be time to pay my credit cards off.
  3. Pay off my wife's car loan.  This is one place we did not follow the experts advice.  We took out a $25,000 loan to buy a brand new car.  I was comfortable with it, since we will pay it off faster than required and since the car will be driven for at least 10 years before we sell it.  The rate was a good one, but due to other upcoming plans, it is time to free up the cash flow.
  4. Build our new home.  The layout and room sizes for our custom home are finalized.  Once I get some more work done on the specifications, it will be time to get bids and choose a builder.  We want to be in the new house before Christmas 2008.  The brings up the final goal:
  5. Sell our current house before moving into the new house.  While we could make dual mortgage payments, with the size of the anticipated mortgage on the new home, that would put a definite crimp in the cash flow.  Even if we have to get into a month-to-month apartment lease during construction, it will be worth it.  Fortunately, the housing market here is still healthy, even if less robust than a couple of years ago.

Total, it means that for 2008, it will be the addition of around $50,000 to our net worth excluding retirement accounts.  Contributions of around $20,000 or more to those will get us that much closer to the end of our 'working years' and give us a healthy savings rate.

There will be a significant bump in our mortgage debt, but it will be matched by a similar jump in home equity and home value.  Plus, we may even save some money with the change by going Energy Star (or better) in the home construction.  Proper home design, better building practices, extra insulation, and good choices for appliances could more than offset the larger home size and result in lower utility bills year in and year out.  The decrease in maintenance will also be appreciated.

Overall, if we can hit these financial goals for the year, it will be a great year for us.  The goals are SMART and match up with my values and life goals.  I'm looking forward to working to achieve them.

If you enjoyed this post, make sure you subscribe to my RSS feed!