Sure, I’ve dreamed of hitting the lottery or coming into a large inheritance given by a distant relative — haven’t we all? I know I don’t want to be in any type of credit card debt ever again, and would like to be able to purchase a car in cash the next time we need one.
But I never really thought about specific financial goals and dreams. When all is said and done, what do I really want to get out of my own personal finance journey? Perhaps it’s time to set down a few points on paper — er, blog — to help hold myself accountable.
Short-term goals:
1. Pay off credit card debt. My newest timeline is to have this done by April. One credit card will be done in January, hopefully, and the second will need a few extra months.
2. Put a dent in the car loan. It’s at 0% for five years, but I’d like to start paying extra toward it each month, like we’re doing with the mortgage. My car is already 6 years old, so I want to pay off the truck before my car goes up to the big junkyard in the sky.
3. Continue to pay extra on the mortgage. While it’s not much, we’ve been making extra principal payments each month — a whopping $25, but every little bit helps. The majority of our extra cash is going to the credit card debt.
4. Add to our anemic savings account. I’d like to get us up to that psychological 6-months-worth-of-expenses mark. We’ll achieve that at tax time, thanks to the $8,000 first-time homebuyers credit we’ll be getting. We can also claim the sales tax on the new car as a deduction.
Long-term goals:
1. Retire by age 55. I will have to really work hard to achieve this goal. If my salary continues to rise over the years and I bump up my 401(k), Roth IRA and savings, it might be doable.
2. Retire with $1 million in my 401(k). This will be tricky. If I continue to contribute to a 401(k) at my current rate of 6% of my salary, with $1K annually matched by my employer and at a 7% rate of return, I’ll only have $487K at age 55. If I work another 10 years, I’ll surpass the $1M mark with an estimated $1.042 million.
3. Pay off the mortgage sooner than the 30-year mark. As one of my short-term goals is to put more toward the principal payment each month, this long-term goal means increasing the amount of money yearly. I’d like to pay it off in 20 years. If we start putting an extra $400 toward the principal starting in two years and continue that payment until the end, that will get us down to 20 years. Doable? Not sure. Even just $100 extra will shave off nearly 4 years.
4. Take a nice vacation every few years after retirement. This will happen only if we’re in tip-top financial shape. I love to travel to new places, but it doesn’t happen too often. And after 5-6 days, I’m ready to come home!
Carnivals
I also participated in my first two “carnivals” this week — with hopefully many more to come!
— Carnival of Money Stories – My Financial Dreams’ Edition, hosted by The Financial Blogger
— Carnival of Personal Finance #233: Welcome to Webcomics, hosted by A Gai Shan Life
