Friday, November 30, 2007

2008 financial resolution

I saw over at Brip Blap that Cash Money Life is holding a contest on establishing 2008 financial goals in order to promote the new Carnival of Financial Goals. The challenge is to write a SMART (see acronym spelled out below) financial resolution for yourself for 2008. If you choose to participate, you’ll be helping to set yourself up for financial success in the New Year, and you could win an iPod Nano or one of three finance books. Whether you choose to participate in the contest or not, I highly recommend you do the goal setting exercise.

Okay. My SMART financial resolution for 2008 is:

To pay down at least $5000 worth of Hubby’s Canada Student Loan by the time our baby is born (current due date June 19th). We’ll start this resolution on December 1st rather than January to jumpstart the New Year.

Once I’m back on my feet, I’ll calculate how much money we’ve contributed from December 1st to Junior’s birthday. If it’s over five grand, we’ve been successful. This is yet another reason not to be premature, kid. You hear me down there?

We’ll submit a large percentage of our Christmas cheques (unless they’re specifically intended for baby by the giver, in which case they’ll go to savings) and bonuses to the loan, and buy used baby gear for items we deem to be safe to do so (e.g. not the car seat). We’ll also start doling out a set allowance every two weeks for each of us to spend as we please rather than spending whatever we like when we like. This should cut down our spending quite dramatically and allow us to reach our goal.

We’ll have to send an average of $834 a month to the loan in order to reach $5000 by June 1st. This should be well within our abilities given our current income and necessary expenses.

We’ll be able to tell monthly whether we’ve been reaching our average payment goal. If we’re ahead, great. If we’re behind we can step up the effort. The uncertainty of the end date will give us incentive to make larger payments early, which will help our overall debt reduction by chewing through more principal and thus reducing interest. Once we’re parents our expenses and income will change dramatically and I’ll have to set a new goal once I’ve become accustomed to the changes. This is why I’m ending the resolution at that point.

I’ll post our progress in a trackbar on my side panel.

Thanks to Cash Money Life for the great idea and best of luck to the Carnival.


Patrick said...

Great goal! I wish you the best of luck in reaching it! ;)

Brip Blap said...

I'm glad you decided to join up with the contest! It's a pretty good idea, and I'll be looking forward to the carnival.

NWT Investor said...

Good luck with the goals. We're due with twins on May 28th, so I understand fully your future planning. Fortunately, we don't have student loans, so our goal will be to top up my wife's RRSP as much as possible by February 29th. Good luck!

Fecundity said...

Thanks, Patrick and Steve.

@NWT Investor- Twins! Double congrats to you and your wife. Very exciting.

I must admit that I'm a bit nervous about twins since there are a few fraternal sets in my family. I'm not sure I'm ready for two...heck, I'm not sure I'm ready for one. :)

Best of luck with your RRSP top-up goal. That's a great one.

Wooly Woman said...

Wow very good! You are already thinking of baby items hey? I initially got all excited, but realized it was too soon so have held off... but have been thinking about it again. Tried for the heart beat today but it was too soon (nice she tried anyway). Next appointment in a month she promises we will hear it! Yay! How was your ultrasound?

Fecundity said...

Wooly - I'm thinking about the baby gear (what we'll need, how much it's going to cost, etc.), but we're not buying any of it yet. We'll wait until it's closer...say in March or so to start buying the big stuff. That being said, I may not be able to resist the occasional onesie or small toy during the post-Christmas sales...

The ultrasound was great. Baby was easily seen and was very kind in wiggling at the right time, which was a gasp and "Ahhhh!" moment for both Hubby and I. I hadn't been aware that its little muscles were ready for such big movements yet. I haven't heard the heartbeat yet (though maybe today when I meet my obstetrician), but we got to see it beating on the scan. It was very exciting and now seems much more real. You'll love it when you go. Except for the REALLY having to pee part...