Goals for 2010

I've written two separate lists of financial goals for 2010, and I've been debating which list to post to this blog. One list contains goals that are realistic and attainable, and offer a substantial bit of wiggle room for any splurges and unexpected expenses. The other list would be a stretch, and would rely on strict budgeting throughout the year, and earning extra money to offset any unexpected expenses, vacations, etc.

We have a few major planned expenses for 2010, but we aren't sure of the cost. I have to buy a bridesmaid dress (plus alterations & accessories), buy a bridal shower gift, host a bachelorette party, and a nice wedding gift. We have a major renovation project planned (kitchen remodel). Hubby will be attending grad school during the summer and fall terms. There may also be some health-related expenses this year (there are a few specific items of concern, and it will be another month or two until we can find out more). So with that, I'll err on the conservative side for goals.

1. Pay off my credit card completely (currently $4k).
2. Pay down Hubby's credit cards to <$5000 (currently $15,300).
3. Pay off Hubby's Perkins student loan (currently $995).
4. Pay off Hubby's car (currently $4334, payoff scheduled Nov '10).
5. Pay down my car loan to <$6k (currently $9669, per payment plan).
6. Complete master bathroom & kitchen remodel, paying in cash (estimated $10k).
7. Splurge on a nice vacation, paying in cash (estimated $2-3k).
8. Maintain at least $5000 in emergency fund (currently $5025).

My "stretch" goal would be to set aside another $5000 by the end of the year, using it to either beef up our emergency fund, to pay off Hubby's credit cards completely, or to reduce my auto loan balance or our second mortgage balance.

2009 Goals - In Review

I had set out five financial goals for 2009 back at the beginning of the year:

1. Contribute $200/month to emergency fund (Met, but only by averaging over the year)
2. Achieve balance of $5000 in emergency fund by end of 2009 (Met! Current balance = $5031)
3. Eliminate credit card debt by end of 2009 (Fell Short! Year-end balance = $4000)
4. Pay off Perkins student loan (Met! Current balance = $0!)
5. Pay down Stafford student loan to <$25k (Met! Year-end balance = $24,160)

I had really hoped to be out of credit card debt by the end of the year, but we've had a number of setbacks that I hadn't anticipated when I established the goals. A $1700 home repair back in January. Chase increased my husband's minimum credit card payments by over $500/mo in August (which means his credit card balances are going down quicker, but mine are decreasing slower). We had some unexpected income tax liability for employer-provided tuition assistance, which reduced my husband's take-home pay for the past 3 months. His salary was also frozen for this year, which meant about $600-750 less in take-home pay than originally projected.

We also made a few purchases that I hadn't really budgeted for when the goals were established. Although we've continued to make improvements to the house, it seems like we consistently run into a problem every time we start a project, increasing the total cost (often substantially!). We bought a new iPhone, went on a few mini-vacations, and bought a new big-screen TV.

Financial Goals for 2009

I like to project out estimated expenses & income, and figure out where we'll be at various points in the future. I usually just do the rough calculations on a sheet of scratch paper, or on the back of a napkin, and don't often keep 'em or track how that compares to reality. 

The last time that I set written financial goals was in October 2008, and that's when I established the following list of "goals" that I hoped to achieve by the end of 2009: 

1. Contribute $200/month to emergency fund 
2. Achieve balance of $5000 in emergency fund by end of 2009 (current balance = $1900) 
3. Eliminate credit card debt by end of 2009 (current balance = $12590)
4. Pay off Perkins student loan (current balance = $1626)
5. Pay down Stafford student loan to <$25k (current balance = $25502)

Right now it's hard to say whether I'll be able to accomplish all of them. I still think it's possible, but it's going to be a bit tougher than I'd originally anticipated. We had a critical home repair in January that cost $1700, and was paid for using the emergency fund. My decision to go back to school (made after I wrote those goals) will also set us back by about $2500 this year (for tuition, textbooks & fees). 

Because of the economic climate, I've been contributing far more than $200/mo into the emergency fund, so that the current balance is already over $5000. I've also already taken care of #5 (just barely!). 

I'll definitely be able to pay off the credit card debt referenced in #3, but I'll possibly have to make a decision whether to wipe out the emergency fund to do so. Hopefully I'll be able to earn some extra money working overtime, and my company will give a holiday bonus at the end of the year.