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Our Financial Goals for 2010

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A quick recap and note on our 2009 goals

Although our personal finance miracle did not come to light the way we had envisioned it, we are so blessed and are making excellent progress on debt repayment and savings.

We repaid nearly $9,000 in debt, saved nearly $6,300 (amongst all savings accounts), and build a decent side hustle income.  All in all things went fantastically.

Barring some sort of enormously expensive and unforeseen event… we will make tremendous progress on our debt repayment in 2010.  Here is the breakdown of what we hope to accomplish.

Remaining Debt going into 2010

The 5 debts we have remaining now are:

  1. Lending Club at $6,544.29
  2. 2nd Mortgage at $39,917.39
  3. Student Loan 1 at $31,426.92
  4. Student Loan 2 at $34,470.73
  5. 1st Mortgage at $119,392.58

This is the order of repayment.  It is a blended method that I devised by crunching the numbers between both the debt snowball method and the highest interest first method.

Financial Goal 1:  2010 Lending Club Debt Goal

Unless this is your first visit to Debt Free Adventure, you are probably aware of the fact that we consolidated our high interest debt through Lending Club and are set to save $500+ by doing so. If you are interested in doing something similar for your situation read my advice on debt consolidation and my Lending Club review.

At the onset of 2010 our Lending Club debt sits at a balance of $6,544.29.  Goal numero uno is to pay this off ASAP.  It is looking as though we will be able to pay this off by March and can then shift our focus to goal number two… paying down our 2nd mortgage.

Financial Goal 2:  2010 2nd Mortgage Debt Goal

We are making our 2nd mortgage financial debt goal number two because the interest on it is much higher than the interest on either of our student loans and after crunching the numbers… paying this debt off next is our best route.

We hope to reduce the 2nd mortgage by at least $20,000 so when 2011 hits we have this debt reduced by more than half.

If you read back through our Monthly Debt Reduction and Savings Statements you will see that we have been paying double principal payments on this debt for most of 2009.  The principal amount was only around $25, so doubling it was a no brainer.

Financial Goal 3:  Emergency Fund Goal for 2010

You may be familiar with my 75/25 Method of Debt Repayment and Emergency Fund Savings.  It basically says to put 75% of your cash flow toward debt reduction and 25% toward savings.  We go back and forth on always pay yourself at least something and switching into gazelle intensity mode.  The answer to that is never a simple black and white answer, so rather than trying to make it so we do what is right for our situation as it changes.

For our current situation $3,000 is equivalent to one months expenses and is enough of a support cushion for us.  We will finally be capping our EF savings at this amount, and barring any huge financial changes, will keep it there until all our non-1st mortgage debt is paid off.

Our emergency fund currently sits at $2,449 so we are close to reaching this goal and are allotting $100/month until it hits $3,000, which should happen in July.

Financial Goal 4:  Side Hustle Goal for 2010

My side hustle is currently earning us around $1,000/month and is growing steadily each month.  My goal for the end of 2010 is to have this earning $5,000/month.

My wife also has an idea for her own side hustle and our goal for that is to simply get it off the ground and operational in 2010.  I may or may not be exposing what this is but will be reporting any income it brings in.

In Summary

We are very excited to by paying off our Lending Club loan soon and feel very good about having a 1 month expenses cushion.  Sure we would rather have more of a cushion, but that will come to pass later once we have all other non-1st mortgage debt repaid.  We have caught the vision of income diversification and are trying to develop income from our passions and gifts.  We are looking at 2010 as the year to bring our entrepreneurial visions to the forefront so we have solid income to fall back on if either of us lose our jobs (after all, we do live in Michigan!)

If our side hustles do develop into more substantial earnings, then our debt reduction goals will be surpasses as we put the majority of any side income toward existing debt.

What about you?  What are you financial goals for 2010?

A Personal Finance Miracle

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Today I want to introduce you to our God, and let you in on our prayer to Him for a modern day miracle.

Our God

Our God is the God of Abraham and of Isaac and of Jacob.  He is the God who created the world, and the God who created us.  He is the God in the burning bush who parted the Red Sea and led the Israelites out of Egypt as a pillar of fire.  He is the God who delivered Daniel from the lion’s den and the God who allowed the three Hebrew children to be thrown into the fiery furnace, yet by joining them, kept them from being consumed by the flames thereof.  He is the God who was made flesh and dwelt among us over 2,000 years ago.  He was God then, and He is God now; and these are not stories… these are histories.

His Miracles

Our God is all powerful and is not bound by the physical laws of this world as you and I are.  As shown above… He is a God of miracles, but His miracles are not a thing of the past.  You see, we believe that God desires to work miracles today, just as He did in the days of Holy Scripture, only our disbelief and self-reliance commonly steals the opportunity.

Today we are publicly submitting ourselves to the possibility of a modern day miracle of Jehovah God in our lives, and are humbled and excited for the possibility that He may pour out even a tiny minutia of His power upon us.  That said, we are not testing God… rather we are yielding our perceived control over our situation to the powerful Being who actually is in control of our situation.

And so that brings us to our specific prayer to our God for a modern day miracle.

Our prayer for a Personal Finance Miracle

At the beginning of the year we set 2 financial goals concerning our debt and our savings.  Due to a few unplanned emergencies over the course of 2009 there is no earthly or mathematical way for those goals to be achieved from our income.  We are choosing to see this as our opportunity to yield the situation to the power of Gods miracles… if He so chooses.  We are praying for God to provide the remaining amounts so our goals will be fulfilled.  We are not praying for the want of money – we can earn the money over the course of the next few months – we are praying that God will publicly glorify His name.  God may provide this miracle, and He may not; either way we know He is far beyond able.  If this is not part of His plan we will not be discouraged or disbelieving – rather we will continue to bless his name and trust that He simply has a better plan for our financial situation.

We will pray for this miracle daily until the passing of the New Year.  Won’t you pray with us?

“And when they (Jesus and his disciples) were come to the multitude, there came to him a certain man, kneeling down to him, and saying, Lord, have mercy on my son: for he is lunatick, and sore vexed: for ofttimes he falleth into the fire, and oft into the water.  And I brought him to thy disciples, and they could not cure him.  Then Jesus answered and said, O faithless and perverse generation, how long shall I be with you? how long shall I suffer you? bring him hither to me.  And Jesus rebuked the devil; and he departed out of him: and the child was cured from that very hour.  Then came the disciples to Jesus apart, and said, Why could not we cast him out?  And Jesus said unto them, Because of your unbelief: for verily I say unto you, If ye have faith as a grain of mustard seed, ye shall say unto this mountain, Remove hence to yonder place; and it shall remove; and nothing shall be impossible unto you.  Howbeit this kind goeth not out but by prayer and fasting.”  – Matthew 17:14-21

How truly amazing it would be to see a modern day miracle.  A modern day personal finance miracle!

A Journey of a Thousand Miles begins with A Single Step

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In our Wealth Pilgrim Radio interview yesterday evening Neal Frankle & I talked a lot about passion.  What my passions are, how I discovered them, etc.  In an email to Friends of The Simple Dollar Trent Hamm recently asked for “a key piece of advice that really changed the way you saw the world and helped bring about real change in your life.”

The combination of these two events inspired me to write this post.

How I lacked the ability to set goals…

Historically I had always been a man of no specifically set goals.  I was never sure exactly why or how I developed & maintained this aversion to process oriented accomplishment.  Whatever the problem was — whether I just couldn’t find the time, didn’t place enough value in achievement, or maybe just didn’t want to be bothered — I had the problem.

Setting goals was not something I regularly purposed to avoid, but rather I had always been a “fly-by-the-seat-of-my-pants” type of guy who just didn’t find it commonly necessary to assimilate goals into my life.

I may have grown tired of this character flaw at different times, but never had the proper set of circumstances materialize to spur me into actually implementing change.  I suppose I always found goal setting to be overwhelming, rendering me frustrated and unable to formulate a personal achievement plan.  Looking back now, I can see how the truth of that last statement may have embodied my goal paralysis.

What finally woke me up…

In January of 2009 the stars finally aligned so to speak when I found a desperately simple piece of advice that would finally remove the scales from my eyes allowing me to understand the incredible value process oriented achievement could bring, and just how I could implement a goal setting strategy that worked for me into my life.  This lucid quote brought it all together for me:

“A journey of a thousand miles begins with a single step”  – Lao Tzu

Glancing over the quote after typing it I suppose the key could lie in the way the quote combines the wonder and excitement of travel & discovery with accomplishing established tasks in life.  Whatever brought me clarity — whether it was the element of adventure, the lack of desired achievement, or the hope of future accomplishment — I have that clarity.

How setting goals has helped me achieve…

Since first reading that quote early this year, I have established life achievement goals and worked to break those down into smaller, more achievable and tangible short-term goals.  I have also been able to successfully implement goals into every aspect of my life, including my personal finance.  The understanding gained also goes beyond goal setting and helps me better work toward achieving anything I set my mind to because I am no longer overwhelmed with the entire process.  I have been able to set up a working, living, family budget.  I have been able to increase my ability to read and finish books.  I have been able to lose nearly 40 pounds.  I have been able to grow more and more self-reliant.  I have been able to change my eating habits to include predominately healthy, local, organic foods.  I am closer with my wife and I am closer with my God.

There are other examples of implementation but I think you understand the power this simple quote has allowed me to find within myself.

What about you?

Are you naturally a goal-oriented person or did you need a similar eye opening piece of information to help you finally adopt a goal centered, and purpose driven life?