Mintly Goals: 2014

I spend a lot of time reading other PF Blogs and here’s what they’re resolving for 2014: 

1. Save more (popular categories: travel, emergency fund, and retirement) – Count me in!
2. Travel more (see above) – This would be awesome, but I’m pretty sure we won’t be able to save for this for another year and a half.
3. Read / Read more – Well, I don’t need to make a resolution about this, it comes naturally.
4. Run races – Uh, hell no. It’s enough for me to plan (not “resolve”) to exercise more than twice a week on my recumbent bicycle. This is where reading comes in! Yay for the iPad and my mom’s Kindle account she shares with me.
5. Spend more time with family – Again, I don’t need a resolution for this.
6. Appreciate the little things – At the risk of sounding like a broken record, no resolution needed.
7. Eliminate debt – Yes, yes, yes, yes, yes! This is our primary goal for the 2014 year.

In examining our current situation, I have decided that although I have some lofty ideas about where I’d love for us to be in 10 years, 20 years, 30 years… it’s just not feasible for us to plan that far ahead without knowing where either of us will be working and what salary we’re making. For the time being, I am focusing on our current situation and the farthest away I’m planning for is May of 2015.

Mintly Goal #1: Pay off our Citibank credit card 

•      Origination date = March 2013
•      The current balance =  $4,196.91
•      What we are currently paying monthly = $500
•      What we will begin paying in in 2014 = $500
•      Date the debt will be ERADICATED: August 2014, with a final payment of $697 (instead of $500)

This card started with a balance of $8596.91*, because we realized that we were paying a lot of money in interest on our consumer debt and rolled it all over into the Citibank Visa Freedom Card because of its “no interest for 18 months” deal. We have religiously paid off the card at $500 a month, with extra being put to it whenever we had a small windfall.

* Chase Visa 1: $3,384.02; Chase Visa 2: $4,962.40; Fee: $250.39; Total: $8596.91

Mintly Goal #2: Pay off our car loan

•      Origination date = June 2012
•      The current balance = $5,290.66
•      What we are currently paying monthly = $172 (the minimum payment)
•      What we will begin paying as of September 2014 = $872* (part of this is the minimum payment, part of it is the $500 that will be freed up from not paying the Citibank credit card bill, and the other part is some of the money that will be freed up in September from L going to school and not paying for daycare!)
•      Date the debt will be ERADICATED: January 2015 (would love for this to inch forward by a month or two!)

This car was a nightmare as soon as we bought it. It’s an Audi, but it was the only used car available under $10,000 when we needed a car. (Lesson: never buy a car when you absolutely have to because your other car is broken and isn’t worth fixing. We didn’t learn our lesson the first time it happened to us. Argh!) We bought it without having a trusted mechanic check it out, and we didn’t realize how much the upkeep was going to be. We like foreign cars, but I’m a Honda girl – not really into the whole “German engineering” thing that a lot of people rave about. In any case, this car cost us a ton of money in the first few months of owning it, and then every few months afterwards. We’ve spent over $5,000 on it since owning it. I KNOW. 

It’s a 4-wheel drive, which we thought was important at the time, because my husband has such a long commute in mountainous terrain, and it’s heavy, so I do feel like it’s a safer car than some alternatives, but in the end, it has been a money pit and we want to be out from under this debt as soon as possible. Our current strategy is to just keep paying for whatever problems arise (though we haven’t had problems since August 2013 – I am knocking on so much wood right now) and pay it off as soon as possible, then drive it until it has another expensive problem or we see a really good deal on a used car and then trade it in. I don’t want to think about taking on another car loan, but before we can save money for a big-ticket item like a car, I want to have our consumer debt all paid off!

Mintly Goal #3: Save for known expenses that don’t occur monthly

Categories:

• Car repairs
• Auto insurance
• Health care (not insurance expenses)
• Business services (expenses for our jobs that aren’t reimbursed)
• Extra costs for L’s lessons & activities (this is just for the extra costs, like application fees, costume fees, recital fees, etc.)
• Gifts

This year, I’ve determined that instead of putting these kinds of expenses on the credit card if there isn’t enough in the checking account to cover these un-budgeted-for costs, we’ll put a small amount aside each month for each of these categories. I went back through our Mint.com account and determined the monthly average of each of these expenses and came up with a number (sometimes higher, sometimes lower) for what we should put aside to cover these costs. The total kind of choked me – but according to Mint, we can still put this aside.

Some people use a savings account with a company like ING Direct, which apparently will help you divide your lump savings amount into different categories, despite the money all being in one account to help you maximize your interest income. Well, I considered that, but we’re already getting a pretty good interest rate (well, for the current economic situation) at our credit union, so we’re sticking with that and I found a free Excel worksheet to help track savings goals, deposits, and categories.

The Breakdown of Savings Categories:

• Car repairs

     Last year’s average: $300 / month!      THIS IS A HORRIBLE NUMBER.
     Savings goal: $100 / month

• Auto insurance

     Last year’s average: $75 / month
     Savings goal: $75 / month

• Health care

     Last year’s average: $103 / month
     Savings goal: $100 / month

• Business services

     Last year’s average: $83 / month
     Savings goal: $83 / month

• Extra costs for L’s lessons & activities

     Last year’s average: not sure, because this didn’t get documented properly
     Savings goal: $42 / month

• Gifts

     Last year’s average: $128 / month (this included a very expensive Christmas gift to me from H, and this kind of spending won’t be repeated this year)

     Savings goal: $50 / month

• Total to be saved = $450 / month

I’ve set up an automatic transfer for the first week of each month so that money will go directly where it needs to go. I’ll keep track of the amounts in each category, and then when those expenses crop up, we can immediately pay them and then transfer the money to the checking account to cover the cost.

I do worry about not having anything saved for an emergency fund at this point, but I’m more concerned about paying our credit card off before we get hit with interest! I do have a plan for February 2015, though – at that point, I hope we’ll be able to put $400 aside into savings (or possibly contribute more to my Roth IRA…). Anyway, for now, I’m content for this to be the plan.

Mintly Goal #4: Snowflake any extra money to consumer debt

I got the idea of “snowflaking” from BeachGirl’s Budget Blog and I love it. She learned about it from I’ve Paid Twice for This Already… in this post. See the link for a good explanation, but the idea is that anytime you have any extra cash (even a tiny amount), you immediately apply it to your debt. For us, this extra money will (I hope) come from areas in our budget that we don’t spend all our money in, and from all the survey programs I do. I used to have them all turned into Amazon gift cards (woot woot!), but in my quest to a) declutter & simplify and b) eradicate debt, I will now turn them into Paypal deposits or checks. This would also include how I use the points from our credit cards. Instead of turning them into statement credits, I’ll opt for checks instead and then snowflake the extra cash to another debt payment.

Mintly Goal #5: Track Goal Successes

Self-explanatory. It would make little sense if I resolve to do these things, then don’t track it. I love to monitor our finances and see our net worth go up, so I don’t think I’ll have a problem with this resolution. Just seemed like a good idea to actually write it down.

What are your goals? Have you got a PF blog post about resolutions/goals you want to share? Please do!

Thanks for reading – more to come!

– M