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:

Specific:
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.

Measurable:
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?

Actionable:
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.

Realistic:
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.

Timely:
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.