This post is by staff writer Honey Smith.
Now that I’ve taken stock of where I’ve been in 2012, I’m ready to set goals for 2013. I want my goals to be ambitious enough that meeting them is a true accomplishment requiring me to stretch my growing money-management skills. However, I also want them to be realistic and personal (revolving around my priorities).
Goal 1: Pay off $5,000 in student loan principal
Since I’ve paid off almost $5,000 worth of debt just in the last six months, I think this is a reasonable goal. However, it will also be challenging because the majority of my debt-payoff so far was due to two windfalls that won’t repeat themselves going forward.
First, I will concentrate on paying off the remaining $3,249.73 remaining in my small balance. Paying that off will increase my monthly cash flow by $47.56 and reduce the number of bills I pay. Once I’ve put that balance to bed, I can start concentrating on my mega-loan.
Like my small loan, my mega-loan is actually considered two accounts: $59,160.77 in subsidized borrowing and $35,422.08 in unsubsidized borrowing. I’ll target the unsubsidized balance first.
By the end of 2013 my goal is to have a zero balance on the small student loan and a $33,000 or so balance on the large unsubsidized balance.
Goal 2: Buy a house
Currently, we rent a two-bedroom condo about 10 minutes from my job; it costs $976 per month. While our current place has served its purpose (especially since we’ve been there almost four years), the size and layout aren’t conducive to the fact that Jake now keeps a home office. There are banker’s boxes stacked in every room, and he’s only going to accumulate more business paperwork. The home no longer works for us.
With interest rates so low, as well as the fact that we aren’t going to be relocating to another area of the country within the next ten years, it makes sense for us to buy instead of rent. We’ve actually already met with a mortgage broker who is an old friend of Jake’s. Credit-wise we are in good shape (my credit score is over 790 and Jake’s is about 750). We will be eligible to apply for an FHA loan after we do our 2012 taxes, since that will be Jake’s second year of self-employment income.
We’d like to stay in our current area (i.e., within five miles of my work, since Jake works from home and his “commute” will be the same no matter what). Our target price is about $150,000. In addition to the costs associated with buying the home, there will be moving costs and also new furniture. Our bookshelves, couch, and dining set won’t survive another move; we do plan to use the Redesign by Goodwill store as our first-stop furniture store.
Regardless of whether we buy or rent, our goal is to be living in a home that meets our current needs by the end of 2013.
Goal 3: Saving for travel
Neither of my bridesmaids live in my state or the state where the wedding was held. As such, they traveled quite a bit for wedding-related events. While they were happy to do it, they’ve stated that the next round of travel is on me. Currently, they live in Philadelphia and Boston. The plan at this point is for me to take at least two weeks in Summer 2013 and visit them.
If possible, I’d also like to swing through Vermont to visit my best friend from grad school and her growing family. While the trip shouldn’t be ridiculously expensive (since I’ll have a place to stay in every city and can take the train between Boston and Philadelphia), I’ll have to bulk up my online savings account and save in order to travel.
Also in 2013, Jake’s cousin is having her first baby in April. Not only is she the relative he’s closest to, she lives two hours outside of Chicago, close to his grandparents. The last time we saw his grandparents was in September 2011, and they are in their nineties and can’t travel. It would be nice if we could make it out for the baby shower.
Looking ahead to 2014, the bridesmaid who came on our honeymoon met her now-fiance on the cruise. She has already asked me to be a bridesmaid and it is likely the bridal shower will be in her hometown, so there will be a trip to Boston in March 2014. The wedding will be in May, in the groom’s hometown of Atlanta.
Ideally, I’d like to pay for the Chicago and Northeast trips out of pocket and have $2,500 in my ING Savings subaccount earmarked for 2014 travel by the end of the year.
Goal 4: Expand my side gigs
My friend Shawn continues to give me SEO work with regularity; he’s also giving me bigger projects as he becomes more confident in my understanding of SEO principles. While the work isn’t especially interesting, I am learning a lot. I also find that being paid by the project is oddly satisfying. I’d like to be comfortable enough with the process to transition into seeking out my own clients by June. I also need to set up a Paypal account for the business so Shawn can stop sending me checks in the mail.
Checks are not terribly convenient for either of us, nor is it the safest way of sending money; one of the checks he sent me was stolen by a post office employee and the matter is under federal investigation (which I had never heard of!). Automating your finances removes some of the risk assumed by human interaction.
I’m also interested in expanding the blogging side of my business, whether through seeking out additional freelance opportunities, starting my own blog, or both. While starting my own blog arguably has the most potential long-term, it also has the lowest payoff in the short-term. I am also not sure what I’d like to write about the most (I have several things in mind). So I’ll have to give this more thought.
Regardless of the source(s), my goal is to bring in at least $5,000 in side income in 2013.
What are your goals for 2013?
Although paying off my student loan debt is important to me, it’s equally important to me that I live a full life in the process. That’s reflected in my goals. Other people (in debt or otherwise) may have different priorities. It’s all about doing what works for you.
Do you set financial goals each year? Is there another method of goal-setting that works better for you? What do you want to accomplish in 2013?