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Financial Strategy: New Goals
Back in May 2007 I started tracking my personal finances, and to keep myself motivated, I started sharing the gruesome details on this blog. About three months ago I setup a Master Plan by which I would eliminate all bad debts within two years.
After reviewing the numbers, I want to up the ante: I want to eliminate all credit card debt within the next year. How do the numbers look?
AMEX
Balance: $13,078.77
New Target: $1,100 towards principal monthly
Finance Charge: approx $100 / mo
Total Payment: approx $1,200 / mo
Last Payment: August 1, 2008
VISA
Balance: $7,701.92
New Target: $620 towards principal monthly
Finance Charge: approx $60 / mo
Total Payment: approx $680 / mo
Last Payment: August 1, 2008
Meanwhile, our target savings goal still stands:
Goal: $15,000
New Target: $713 monthly
Last Payment: April 1, 2008
Starting April 1, 2008, the savings budget will be diverted into dual Roth IRA accounts. Max contribution is $4,000 per year, roughly $333 per month, times two people: the post-April ‘08 goal will drop to $666 per month- a nice, wholesome number.
Starting September 1, 2008, the approximately $1,800 going towards the then-defunct credit cards will be diverted directly towards mortgage principal. As soon as LTV is low enough, we’ll wrap the student loans and current 30-year note into a new 15 year fixed mortgage.
Rather than tossing all my extra money into the mortgage principal like a frightened baboon, I will condition myself to pay the number printed on the bill. The sooner the credit cards are gone, the sooner we can work to re-fi all existing (constructive) debt into a single payment.
And being that I have just (theoretically) saved myself 9 credit card payments, I won’t force too much guilt on myself for diverting the few extra bucks I find each month into the home improvement budget.
Hungry for more?
