How to Find Balance With Your Savings Goals

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how to balance multiple savings goalsDo you have multiple savings goals?
One of the most effective ways to save money is by creating savings goals. This gives you a defined reason why you are saving for something, instead of just throwing money into a pot and pulling it out whenever you “want something.” If you want to take it a step further, you can create a…

One of the most effective ways to save money is by creating savings goals. This gives you a defined reason why you are saving for something, instead of just throwing money into a pot and pulling it out whenever you “want something.” If you want to take it a step further, you can create a sinking fund, or a unique sub-account for your savings goal. This is easy to do at many online banks, including Capital One 360 and Ally Bank.

Sub accounts make it easier to balance multiple savings goals, but they also make it easier to spread your money out too far if you aren’t careful. When you are trying to save for multiple things all from the same paycheck, you can end up allocating so much cash to your goals, you have little life over for day to day living. While it is good to have savings plans in effect, it is also very crucial that you find a balance for each of your goals. Otherwise you may end up financially strapped in one area and find you have to take from one account to make up for another deficiency, essentially destroying your entire plan.

how to balance multiple savings goals
Do you have multiple savings goals?

So how can you keep things in balance? It’s not difficult but does require some forethought and continuous effort. Here are some tips for finding a balance in savings goals:

Make a List of Your Top Savings Goals

Start by making a list of what you want to save for and define your goals (why you want/need to save). If you are like most people, you probably have multiple areas where you want to save. These often include categories like retirement savings, an emergency fund, college savings plans, vacations, home improvements, and big ticket purchases like a new car. These can be a start to your list, depending on what your goals and needs are.

Prioritize Your List

Once you have established a list, you may find that you do not have enough income to sustain all of these goals – at least right now. The next step is to prioritize the categories in order of importance for you and your financial needs. Establish the priority of each item makes it easier to split your allocations accordingly and better track your progress.

Work These into Your Budget

Hopefully you already have an established a budget. This makes it easier to determine just how much money you have left to put towards your goals each month on a consistent basis. If you don’t already have a budget, then take the time to gather your income statements and your bills. Even if you don’t budget to the penny, this will help you have a better understanding of your net income and expenses and give you a better idea of how realistic your savings goals are, and how long it might take to achieve your financial goals.

Break Your Goals into Bite Size Chunks

Each goal can be broken into a small piece to make it easier to achieve. For instance, you may find it difficult to write a $5,500 check if your goal is to max out your IRA each year. But you may be able to max out your contribution each year by making monthly contributions. Start with the $5,500 annual goal, then divide by 12, which gives you $458.33 per month (max limit for a single investor under age 50 – see this link for all IRA contribution limits).

Another good short term example would be a large purchase (say a new refrigerator) that costs $1000. You’d like to purchase the refrigerator within the next six months. Dividing the $1000 by 6 months, you would need to set aside roughly $170 a month or about $43 a week to achieve your goal.

It may be more difficult to establish the longer term goals such as those for retirement, since there are many unknown factors. But as time goes on and your income increases, you can gain more perspective about how much you need to save to achieve goals for the future. Short term goals may be easier to figure out. You can start with an emergency fund if you can’t afford multiple kinds of savings plans. Try to save up 6-12 months of living expenses to get going.

Apply These Changes to Your Budget

Your savings plan needs constant care and upgrading much like your budget. If you consistently work towards fine-tuning your goals and distributions of monies, you will likely achieve success financially with all of your goals. Goals will also change in priority depending on daily life and financial needs so keep up with your plan and keep it active.

Supercharge Your Progress By Decreasing Debt and Increasing Your Income

You can achieve your savings goals more quickly by some combination of decreasing your debt (and eliminating monthly debt payments), and/or increasing your income, which gives you more money for your savings goals each month.

Debt Reduction

Debt is an ugly beast which can be incredibly difficult to slay – especially credit card debt, which can have interest rates over 30%. If you only make the minimum credit card payment, it will take you years to pay your debt. Here is how you can reduce your debt:

Analyze your situation. Make a list of all your sources of income and all your obligations. Then use this information to create a budget.

Stop generating new debt. Doubling your payments doesn’t do much good if you continue to add new debt. Cut up your credit cards and stop spending more than you earn.

Accelerate your debt payments. After you have a budget in place and you stop creating new debt by spending beyond your means, increase your debt payments to eliminate your debt more quickly. There are several ways to do this, but one of the most effective and most popular ways is the debt snowball, which was made popular by Dave Ramsey. To create a debt snowball you take extra money you earn and put it toward your debt. When you pay off one debt, continue using that money each month to pay other debts. Your debt payments will get larger over time which will eliminate your debt more quickly than if you were to pay only the minimums.

Earn More Money – Small Increases Can Have a Huge Impact

Your ability to create income is your greatest asset, and because of this, you need to not only take care of it, you need to grow it! Why do you need to earn more money? Many reasons… How about debt repayment, keeping up with inflation, investing, saving for retirement, taking a vacation, no longer living paycheck to paycheck… need I go on?

OK, we know that earning more money is never a bad thing, but it is sometimes easier said than done. Here are a couple ways you can earn more money. Keep in mind, they may take some time and there is work involved, but anything worth having is worth working for.

Earn more money through your day job. Chances are most, if not all, of your income comes from your day job. That means you need to work to maintain your current income, and strive to improve it if possible.

  • Ask for a raise. One of the best ways to get a raise is to simply ask for it. Make sure you do it the right way and go in prepared – have a list of accomplishments including how much money you earned for the company or saved the company.
  • Professional certifications. Obtaining a professional certification can lead to increased income. Research which certifications are the best in your field and go after them.
  • Change jobs. Sometimes the best way to get a raise is to go to another company. Consider it a bonus if your company pays for it.

Earn money through alternative income streams. I define alternative income as any money earned outside your normal day job. There a hundreds of ways to earn money outside of your normal routine, and earning a little side income can help you reach your financial goals more quickly and act as an insurance policy against losing your job or another main source of income.

Some ideas for alternative income include starting a side business, consulting, working a part time job, owning a rental property, owning dividend paying stocks and other investment income, working a part time or seasonal job, owning patents or receiving royalties, buying and selling items on Craigslist, Ebay, etc. With alternative income, you can use creative ways to generate more money. The limits are up to you and your imagination.

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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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  1. Blaine Moore says

    I have two goals. The first is to completely fund my Roth IRA, and I plan on doing that by making an automatic contribution of 1/26 of my limit ($4000/26 = $153.85) every 2 weeks.

    I also want to finish paying off my smaller mortgage (we originally went with an 80/4/16) – we have paid off about half of the mortgage in the past year and a half so I figure that we can pay off the other half this coming year. The monthly amount due is only $84, and I have never paid less than $184 in any given month. Most months I put an extra $200 against principal, unless I’ve gotten a bonus or tax refund or other bit of extra cash flow in which case I’ve put that against it. I have specific numbers for what I need to put against the mortgage each month (assuming 3 months of $1000 or more against it), but I prefer not to share those in a public forum. They are calculated on both a per month average throughout the year, and a per month average for the 9 months that I don’t expect to have large payments against it. This mortgage is the highest interest debt that we have (~7%), so it will be nice to get rid of it.

  2. Ryan says

    Excellent goals Blaine. Don’t worry about not wanting to share the exact numbers in a public forum. I didn’t even think about that… The point is, you are doing something proactive with your finances, and that is what personal finance blogs and this giveaway are all about! 🙂

  3. Dec says

    I have only one financial goal for 2008 and that’s to finish paying off my credit card debt. Almost $8000 left – budgeted payment of 650 per month – I intend to have it paid by November!

  4. Stacey says

    Our goal for 2008 is to bring the loan on our Ford Excursion down to what it is worth. This vehicle was, we thought, a smart decision two years ago when we traded in a truck for the extra traveling room for our family of 5. We needed the horsepower of either an excursion or suburban (or truck!) to pull our family camper and for farm purposes. Unfortunately, because of gas prices, this vehicle dropped in value drastically – now worth half of the $18,000 we owe on the vehicle. (Part of that $18,000 was leftover debt from the trade in of our truck.)
    We plan to accomplish this goal by paying an extra $250 per month towards this debt. The extra money will come from our grocery budget (we’ve already made cuts to reduce this bill from $500+ per month to $400 per month by making only 2 trips to the grocery store per month with a list made of pre-planned meals.)
    Since we live in a very rural area in very rural South Dakota, gas is another expense that we live with. We budget over $400 per month for gas. We plan to eliminate part of this expense by planning our trips wisely and eliminating any “We just HAVE to get out of this tiny town for a day” trips that add $100 to our gas bill. If we accomplish this goal, we should reduce our gas consumption to less than $300 per month.
    Our goal is realistic if we stick with it as a family. Our second vehicle is a 1986 Honda Accord which I would like to replace as soon as the excursion debt is under control. Because my third grade son hates to see me pull up to the school driving this relic, he will be completely supportive of this family goal!

  5. Mike says

    My first goal for 2008 is to save $8400 for retirement, while continuing to follow the budget I made for myself in September. 50 dollars a month into RRSPs, 650(after taxes) dollars a month into my portfolio.

    I choose this goal, this amount, because it represents a nice round percentage of my income. So that it’ll bring me closer to my long term goal, without putting too much of a strain on my day to day living.

    Second goal, is to continue to learn more about investments, so I can confidently decide where I should put the money.

    The second one should go without saying, but right now I am still very ‘green’ when it comes to the investing ‘scene’. While I’m learning every day from blogs and books, it still feels like there’s a long way to go before I can decide where to invest my savings.

  6. Sam says

    My financial resolution for 2008 is to save at least $8400 towards the down payment on my first home.

    This is made possible by the impending completion of my current goal: to be debt free by the end of 2007. Despite working the entire time and choosing a (relatively) cheap in-state school I had accumulated nearly $12k in credit card debt while in college. It took a layoff induced wake up call for me to finally address this debt and get serious about personal finance. Over the last 20 months I have put around $600-700/month towards this debt and am proud to say that in mere weeks it will be completely gone.

    In 2008 I will simply shift these payments from that goal to one even more satisfying, that of owning my own home. I will set up an automated transfer so that every payday $350 is taken from my checking account and moved into my online savings account, a total of $700 a month. 700 x 12 = $8400 by the end of 2008. Adding in any “found” money like tax returns, temp/freelance work and bonuses and I may well be able to sock away $10k. $700 is actually a decent chunk of my income, but since I’ve gotten used to living without this money it should not be much of a hardship.

  7. Lorri says

    My 2008 goals are as follows:
    I have recently downsized into a much smaller home. I have have boxes of collectables, dishes, etc that I can no longer use. I plan to list 20 items per month on Ebay to sell.Each week I will list 5 items (I work and go to school,anymore than that would not be feasible for me). The income from those items I will place into my saving account to increase my emergency funds to cover 12 months of expenses. I will also start a christmas fund for next year by placing 10% of money earned in another account specifically for that purpose. I currently do not have any debt with the exception of my mortgage and feel that my goals of achieving an emergency fund account are attainable this year.

  8. Joleene says

    I have never been a saver. It just doesn’t seem to be in my nature but past events in the last year or so have made me realize how vital it is to have a savings to rely on. So, my finanacial goal is to start building a savings to fall back on. I will admit that I am starting off small. Here are my specific goals.

    I will deposit $50 into a savings account every two weeks for 6 months. After the 6 month period, I will increase my amount to $100 every two weeks. My goal is to increase the weekly savings amount every 6 months so that saving becomes more of a habit.

  9. Pam says

    By December 31, 2008, my goal is to reduce my credit card debt by 60%. I’ll make payments each payday (every two weeks) according to a payoff schedule I’ve created and I’ve already added those payments to a detailed, 6 month spending plan.

    I chose this goal because debt elimination must be tackled before I can focus on savings, which is the next goal. I already have an emergency fund, but I need to be able to increase savings to my 457 plan at work and start a Roth IRA. I’ll have the credit card completely paid off by December 31, 2009.

  10. George says

    My goal is to save enough money to fully fund my son’s college education by adding another annual $2,000 contribution to his Coverdell ESA in 2008 and achieving a 25% average annualized rate of return (currently at 23.8%) on the invested money. I estimate that if I can do this for 10 more years I will likely not have to add further funds and can place all the account in ultra save Treasury bonds until he is ready to go to college (he’s 4 now). I know that this investment goal may appear unrealistic, but by taking advantage of short term opportunities that only individual investors can profit from, I believe I have a good shot at reaching this tough goal.

    I have been tracking this portfolio since 2004 on my blog if you are interested in learning about what I’ve been doing. Just look for the category Coverdell ESA or search for posts on my Special Situations Real Money Port.

  11. Jayme says

    My Goal for the 2008 year is to save 15,000 dollars in order to purchase a car. I have 9,500 saved currently so i would only need 5,500 in the next year. i plan to achieve this goal buy putting half of my earning from my food service job into savings every month, and all my earnings from being a personal care asitant for the disabled into my savings.
    This should be about 300/month into my savings. i realize this is not enough but this combined with birthday presents and other holiday presents should get me very close. Also since over the summer i do not have classes i will be making more money hopefully.

  12. Kelly says

    My New year goal is to comply with my debt snowball.
    I have prepared a schedule of paydowns, month by month and a spending budget to keep me on track. I have moved my bank account to start fresh, and after four years of failure with this goal – i now have to do it – there is no alternative.
    I will pay £1000 per month. I have an emergency fund for hic-ups and will continue with cashback sites and ebay selling to increase this figure if necessary/possible.
    By the end of the year I will owe less than £10,000.

  13. Jeff says

    My financial goal for 2008 is to save $10,000 for retirement. I will accomplish this by increasing my contribution to my ROTH IRA with the money that used to go to my car payment as well as continue to contribute 5% of my salary to my 401k.

  14. Melinda says

    My goal is to pay off just over $3000 on a secondary student loan used for research travel by August. To do this, I will pay $475 a month. I have an emergency fund for unexpected expenses in order to stay faithful to this monthly goal.

  15. Jan says

    My goal for 2008 is to pay off our car loan with a calculated monthly increase. By adding in extra earnings, eBay profits, etc., we may actually pay it off even sooner than December 31, 2008).

    After this loan, all we have left is one student loan. Hopefully it will be eradicated in 2009, we will be debt-free, and then start working on our next financial goals of boosting our savings and retirement accounts!

  16. Erica says

    I just found this feed, and I am really enjoying this!

    My goal for 2008 is to break my poverty mindset through instituting a second layer of savings account that I term an “unforseen events” account. Currently I make a decent living and contribute fully to my employer-matched 401K, and I also have a savings account that receives $200/month automatically. Yet this account hovers around $1000, because I don’t have a lump sum account for non-emergency but unforseen events! I can’t save for a down payment on a house, or heaven forbid to offset a major medical cost or being laid off, if I keep raiding that piggy bank. So, as soon as the new year rolls, I will take the following steps:

    1. Open a savings account that is NOT linked to any of my other accounts, and is held in a different bank. This eliminates the “I’ll just transfer some money over *for now*” trick I play with myself — the money is then never returned to savings when I do this! This new account will become my major savings account, and the $1000 balance and auto deposit will be shifted to here.
    2. I will change over the current savings account that is linked to my checking into my unforseen events account, and I will put $100 per month into this account.
    3. I recently received a raise, which only went into effect in my last paycheck. I have not had time to get used to this yet and thus it isn’t eaten up by costs. I am going to ‘disappear’ this money by rolling half into the savings account and half into the unforseen events fund.
    4. Any windfalls (bonuses, awards, extra assignment pay etc) that I receive will be apportioned as follows after taxes: 25% unforseen, 50% savings, 25% spending. I have learned that if I don’t do this and give myself a small bit, I become balky and I overspend. This is feasible because I do not carry credit card debt for longer than a month or two.
    5. My measurable goal is to have my savings built back up to $5000 by the end of the year, and to have my unforseen events account hold $2500.

    This will leave me with only my student loan hanging over my head by December 2008, and I will have a much stronger sense of financial security when I am not always worrying that despite my good paycheck a spate of bad luck could wipe out my nest egg or start me in a spiral!

  17. Writers Coin says

    This was a great idea, I’m glad I did it! The details are on my blog but it involves saving $10,000 for a down payment next year.

  18. Thomas says

    A Four-Pronged Attack:
    First off, my problem is $14000 in credit card debt, no emergency fund, no savings, and a lot of planned travel for the new year. Pretty much the only thing I have going for me right now is that I max out my 401(k) contribution each month through my employer. The goal is a minimum of $1000 in my emergency fund/savings account, cut out two of the credit cards that I am carrying a balance on, and pay back $7000 in debt over the course of the year.

    Prong 1) move higher interest cards into lower/no interest cards, and pay off the remainder of the card. Right now I have 4 cards with different APR’s on them, and I would like to cut that to two cards with a fixed low APR by the end of the year. I have about $600/month earmarked for this reason. Prong 2) set up an automatic balance transfer from my checking to savings account of at least $200 a month. Any extra cash, bonuses, or other windfalls should go into this account. Prong 3) create a spending plan that cuts down on the fast food, bar drinks, and entertainment sections of my spending. These are the three areas that I feel like I can cut back the most without dramatically altering my life, and should save me anywhere from $50-150 a month. Prong 4) take advantage of extra cash making opportunities like a second job, eBay selling, etc.

    And the secret hidden Prong 5) keep reading Personal Finance blogs for the tips and tricks to keep going and to make a difference with the money I’ve got. Which means by the end of 2008, I will have ~$7000 in debt, a good start on my emergency fund/savings account, fewer credit cards, better spending habits, and (most importantly) an end in site to credit debt.

  19. pfmoron says

    One of my Financial Resolutions for 2008 is to increase my Emergency Fund from its current $1,000 to $10,000 by year end. In order to accomplish this I will have to deposit $750 per month ($9000/12) into my Emergency Fund, excluding interest earned.

    This is one of many Financial Goals for 2008 that I will be tracking on my blog. Thank you for this opportunity.

  20. TD says

    My main finance goal for 2008 is to reduce my normal commuting costs by 90% by moving to an
    apartment closer to work within the first quarter of 2008.

  21. Angie says

    My financial goal for 2008

    • Pay off the remainder of my MasterCard (end of year balance projected to be $525.00).

    • Begin saving for:

    o A $2,000 special assessment that will be levied by our homeowners association for a new roof.

    o An emergency fund, eventually accumulating enough savings to cover three to six months of living expenses in the event of an emergency.

    • Begin investing

    How I will do this

    I have created a budget and began using it November of this year. While I’m still getting used to sticking to it, my negative balance at the beginning of each month (when I get paid from my main job) is getting smaller. I plan to be fully “in the black” at the beginning of January 2008.

    I use my Discover Card in place of my Visa debit/credit card for all purchases possible. I enter each and every transaction into my checkbook (kept on an Excel spreadsheet) just like I would for transactions using my Visa. I have managed, thus far, to make $28.46 since 04/27/08. I plan on letting this accumulate and adding it to savings or investments at a later date.

    Also by using my Discover Card I find I’m borrowing, interest free, THEIR money. At any given moment I have $1,800+ sitting in my checking account even though it will be owed later to Discover. Since my paycheck overlaps with the money sitting in the account, I moved $1,000 to a money market account to begin accumulating interest.

    I have obtained a third job. I have my main, Monday through Friday, full-time job. I have a part-time job I work Saturdays from approximately 8:00 or 9:00 am until approximately 2:00 pm. My third job is working mainly Sundays 3:00 pm until 11:00 pm with the potential to pick up extra hours as needed. I was offered, temporarily, to work Saturdays 3:00 to 11:00 also and I have taken that until at least through December.

    I will be able to pay $450 towards my MasterCard in December. My estimated balance for my checking account at the end of December (if I am able to stick to my budget) is $37.61 (more with the extra hours I’ll be working).

    In January 2008 I plan on paying the remainder of my MasterCard (approximately $525) and begin putting money into a savings account (I’m projecting to be able to put $275 in savings in January). I’m planning on opening an ING Direct Orange Savings Account.

    Each month after January I have a specific budget for that month. For instance, in February I have a dog that will need her yearly vaccinations. In March my vehicle registration and plates will be due. In May the second dog will need her vaccinations. I am not leaving much wriggle room for unexpected expenditures hoping to take most out of “miscellaneous”. If necessary, due to the unexpected, the money I put into savings will be less than planned.

    I keep a spreadsheet showing my approximate budget for each month through the end of 2008. I also have a spreadsheet showing how I keep track of expenditures throughout each month and view how I’m doing compared to what I’ve allotted myself for each category. I’ve kept the categories very simple with most things thrown into miscellaneous (basically anything other than first priorities). My checkbook spreadsheet is separate from these but contained in the same workbook.

    I am excited to finally make the decision to take control of my finances. It is a very empowering feeling! I have lived paycheck to paycheck my entire life and while I’ve managed so far I’m tired of doing it! I am a 41 year old female, single, and no one to “take care of me” but ME.

  22. Jason says

    My goal is to open tax advantaged accounts for myself (retirement) and my child (due in May!) (education), and to fund my, my wife’s, and my child’s accounts fully. I’d been sitting on a bunch of cash that will shortly go for a down payment on a house, and we’re left with a reasonable emergency fund, but the mortgage will eat a little into our monthly savings (which had been 12% of gross income). We’re moving to a higher salary area, so that should provide enough boost to get us back to that savings level, and my gameplan is to cut spending or bring in extra cash enough to fully fund all of the accounts and hopefully have enough left over to further pad the emergency fund and do some taxable investing. The sub-goal (if it’s allowed) is to get the education account set up for my child before they arrive.

  23. Anne says

    My goals for 2008 are 1) to pay off my student loan debt by August; 2) to max out my 401(k) for the year; and 3) to pay off my second mortgage by the end of the year. I do not want to give specific dollar amounts, but I’ve run the numbers and these goals are achievable so long as I remain disciplined in cutting back on spending.

  24. wendy says

    My main financial goal for 2008 is to pay off my credit card, and I owe $3000. I plan to pay off $300/month, so I should be able to do this within the year. If I have left over money any month, I will put it towards this debt also. If I finish early, I am going to start paying off my student loan. I am still a student right now, so I do not have to start paying it back, but I would like to pay it off as much as possible. I am going to pay it back at the same rate. My income is very low, but I have already taken a side tutoring job, so I should be able to achieve my goals.

  25. Ryan says

    I am going to save at least $8,000 this year for my wedding and home repairs. This will allow me to pay for the wedding and some necessary home repairs without going into any debt. I will do this by automatically depositing $125 dollars a week into an ING account, plus I will teach during summer school, which will give me an additional $1800 after taxes. Along with interest from my account, I will be able to save more than $8,000 over the course of the year.

    I set this goal because I do not want to begin life with my fiance with either of us in debt due to the wedding.


  26. Melanie says

    My financial goal for 2008 is to pay off one of my two remaining student loans and one of my two credit cards. I plan to do this by making at least two $50 payments per month on each on top of the monthly (or quarterly for the loan) payments required. By my estimates, my loan should be paid off by November 2008 (currently $1000), and my credit card by December (currently $2000). On each monthly payment of my credit card, if possible, I would like to pay another $50 over the minimum.
    This is the smaller of my two loans (the other is closer to 15k), but the larger of my two credit cards. I am hoping to pay off the second credit card, using the same method, by July 2009.

  27. Deven Harris says

    My goals for 2008 are several:

    As this will be my first year after school with my first full time job, resolution number one is:

    1: Pay off my various credit cards:
    $1300 for my Best Buy Card
    $780 for my Visa
    This should be done by February, supplemented by Holiday and Birthday monies.

    2: Start Roth IRA -By January I will have researched enough to start investing, at this point I am thinking a mutual fund with Vanguard, but I also want to look into precious and non precious metals. I have budgeted in $300 per month.

    3: FOREX -Start pretend account and work at it until I consistently am earning, then start real account with all extra money accumalated that far into the year.

    4: Live by my budget -this will be tough as I am somewhat of a gadgetholic but this will be key to my success and I will try to adhere to it as closely as possible. I will also look into Quicken to track.

    5: Move my current accounts to new bank: I do my banking online and the Federal Union that I currently use is pathetic in that regard. I have checked out Citizens and am leaning in that direction but if anyone has any thoughts on the matter that would be great!

    6: Set up AutoBill Pay -will keep things easier now that I will have steady income.

    So, in essence, to keep myself on course and saving for the future!

  28. Brian says

    Not too surprisingly, my goals and plans ring true with many other posters.

    Currently, I owe $525.00 to Wells Fargo @ 0% for a couch my wife and I bought. We love the couch, but really didn’t need to replace the old one yet. There’s 4 months left before the 0% interest goes to 28.90 %.

    I am currently overdrawn on my chequing account to the tune of $950. An account with a major Canadian bank that charges $13.95 a month in fees plus interest on the overdraft.

    I have 2 credit cards with a total balance of $2860.00. A line of credit with a balance of $7,900.00 and a consolidation loan with a balance of $13,500 owing.

    Step 1: Stopping buying things, I want as opposed to things I need.

    Step 2: Analyze my income versus my expenses. Create a budget. After minimum payments on credit debt and living expenses I have $270 to use to pay down debt.

    Step 3: Pay off the Wells Fargo debt. This will take two payments and will be retired by the end of January.

    Step 4: Apply that $270 to my over draft until I have built up the chequing account to a positive balance of $1000.00 to act as my emergency fund. That should be in August of 2008.

    Step 5: Sell the shares I bought as part of an employee purchase plan and put the money towards our emergency fund. This should put $800 -$900 towards the emergency fund.

    Step 6: Work all the overtime I can get at work and put everything over the regular pay towards the emergency fund. Due to OT availability this might be $100 – $300 dollars extra a month. Assume $150.
    Steps 5 and 6 should mean that the emergency fund will be fully funded by the end of March.

    Step 7: Get down to ebaying that stuff sitting in the closet.

    Step 8: When the emergency fund is fully funded, close the chequing account and move the money to the no fee President’s Choice bank account that I have set up.

    Step 9: Apply the $270 plus all OT moneys towards the credit card debt. Hopefully the cc’s will be paid off by September or October.

    Step 10: Start applying the $270 plus the OT $ plus the $110 minimum cc payments towards the Line of Credit. This should put me close to having the Line of Credit half paid off at the end of 2008.

    In 2009, continue paying off the Line of Credit and then pay off the Consolidation Loan.

    Thanks for the opportunity to make my 2008 financial resolution. I certainly hope that I win the Ipod because I won’t be buying one in 2008!

  29. Ruth says

    Ah, New Year’s Resolutions…. I never seem to keep them. So, to make sure that I actually achieve my 2008 Financial Goals, I plan to start on December 1st with at least one of them. I could tell you about our goal to pay down on our car loan, or our goal to pay down our 2nd mortgage, our goal to set up Roth IRA’s with our tax refund, but the fun goal is the Mudroom. Some background:

    My husband and I bought our first house in June of this year. We saved enough for a 10% downpayment and we have an 80-10 mortgage for the rest. We’ve found that owning a home is more expensive than we thought, and thus our plans for a mudroom and a french drain in the front yard (some water problems in the basement) will need to be put off for a year.

    So, Main Financial Goal for 2008 – save enough money in 2008 to start, build, and finish the mudroom and front yard issues in 2009. We will accomplish this goal as follows:

    A- Plan/design the addition – we just got a copy of our plat and talked with the planning office in town a few days ago, so our heads are full of possibilities. I work as a designer, so I’ll be drafting up the plan myself. To give myself a deadline, I want to have the plan done and ready to submit for permit by Valentine’s day (we won’t actually submit for permit until later as you have to start your project within 6 months of permitting, but I want it ready to go by V-day)

    B- Gather materials on the cheap – once planned, we will have an entire year to gather materials. There is a Habitat ReStore in town that we will begin frequenting once a week (probably on Wednesdays). We will also be spreading the word to contractors that I know from my work that we are looking for building materials and will be willing to save them dump fees for scraps and leftovers (it really is amazing what I’ve watched people throw away on a job site).

    C- Set up a separate Savings Account for all the extras that we won’t be able to find or do ourselves – This is a mini-goal, but super important, actually setting aside and naming a savings account that is dedicated to our future mudroom. It is a very small goal, but it will be one that we can easily do, giving us the mental jump start on this project. (The account will probably be through ING as we can bank over the phone with them which is a huge convenience factor for me. If there are any other virtual banks out there with better rates that also have the bank by phone option available, please share!)

    D- Start setting aside actual money for the Mudroom account. This one has some subgoals, such as:

    Start pulling $50 per month into said Mudroom account and reevaluate every month if any extra can go there.

    Setting up a price book for groceries (the first entry will be this weekend when I go grocery shopping) and banking our savings (current food budget $350/month. I’d like to get it down to $250 and bank the difference)

    Sell some stuff (since we moved, we’ve found some things that we don’t need or love that can be sold either on consignment or on Craigslist. It will declutter our lives and hopefully make a small bit of moolah. I’m not going to fool myself into thinking it will be significant, but again, I need the mental boost to keep saving that selling some of these things will give me)

    Find other ways to earn income – after we’ve finished painting all interior rooms of our house (like I said, its our first house, aren’t they by definition fixer uppers?), I’d like to branch out of my day job and see if one of my hobbies can make us a little extra $$. I make really good candy (no, really, not just bragging, I make professional quality chocolates) So, this particular goal may fall by the wayside, but I’d love to do holiday orders for chocolates next year.

    So, the last one about the chocolate is a little pie in the sky, but I think the others are doable. A side personal goal for myself is to set up a blog that will chronicle our journey towards a mudroom. Hopefully the virtual accountability will give me another mental push in the right direction. If you can’t tell, I’m a firm believer in positive thinking leading to positive results.

    Thanks for the idea of writing it all down. 2 years from now, I will enjoy a new mudroom because of these goals!

  30. Sarah says

    I accomplished a lot this year in terms of my personal finance goals, including paying off a $10,000 car loan, fully funding a Roth IRA for both 2006 and 2007, and getting 6 months of expenses saved in an ING account.

    My goals for 2008 will be similar: fully funding a Roth IRA ($5K), putting the maximum amount into my 401K (20% of my salary), and saving up for a house down payment.

    My main goal, though, is to donate at least 10% of my salary to charity. This is one thing I did not do this year due to my quest to become debt-free.

    I think about how lucky I am to have had parents who went to bat for me in high school (a teacher tried to pull me from the honors math courses (I later went on to become an engineer, so take THAT evil teachers!)). I am lucky that they helped support me through college, and also for insisting that I would finish in 4 years or less. I’m lucky that I got a job with a great company that is going to help me pay for graduate school.

    So many people have not grown up with the support I had, and I think that the best thing I can do is to give back, in thanks for all I’ve received. The best thing I can do for my money situation is to give some of it away, even if that extra money would be lovely if it were padding my bank accounts.

    Even better, my company will match my donation dollar-for-dollar! They will also pull it directly from my paycheck, so I just have to click a few buttons and all the work is done for me!

  31. Jennifer says

    My financial resolution for 2008 is to defeat my “Axis of evil”:

    1. paying off the rest of my student loan by May 2008, currently at $2987
    2. start an ING Orange Savings account that automatically deducts from my checking account
    3. get closer to paying off my car note, currently at $1,362.43

    How I will do this:
    1. paying sums of $600/month until April giving myself 1 month leeway in case I have to make a smaller payment
    2. logging onto ING’s website and starting a high-yield savings account that will also automatically deduct $100 from my checking account, at least to get my feet wet
    3. try to make consistent $300/month payments toward my car note

    Why I want to do these things:
    1. I want to be debt-free before I start nursing school because I know I will incur even more. 🙂
    2. I want to really start an emergency fund and at least have $1000 socked away before I start school. I want to start socking away money in my Roth again, but I figure since I don’t even have an emergency fund I’d start with it.
    3. I would really like to have my car paid off before school too. I just can’t imagine having to take a loan out for school that would also help to cover another LOAN!

    I might look into the high-yield checking account that Charles Schwab offers as well. 🙂

  32. Looby says

    My financial goal for 2008 is to transfer an extra $200/month to my UK savings account so that I can pay off my student loan in full by September. I know I can achieve this because I frequently save this amount each month for short term goals like holdays. I also aim to increase my emergency fund from $1000-3000 dollars by December, and transfer it to a high interest savings account. This will involve actually reducing my spending on miscellaneous crafting items (my main outgoings) and instead using what I already have. Finally to sign up with my company’s pension plan as well as funding my UK personal pension.

  33. Ryan says

    Thanks for sharing all of your wonderful financial goals for the New Year everyone!

    I have sent e-mails to everyone confirming your entry. If you did not receive an e-mail, please check you SPAM filters or contact me. Thanks for sharing and entering the giveaway! 🙂

  34. E.C. says

    My goal is to have $17,000 in savings set aside by graduation in May. I will set aside $1,000 of the stipend I’ll receive in January. I’ll need to save approximately $30 a month as well and continue the compounding of interest on my current savings account and cd.

    The most difficult part of reaching this goal is to avoid frivolous spending that would force me to dip into my stipend or existing savings. By keeping my savings in an online account and a cd that doesn’t mature until May, my money is less accessible and the temptation to spend it is minimized.

    I take great pleasure in knowing that I have enough in savings to live on for a year if I had to. If I begin work after completing my undergraduate degree, I’ll be able to fund fully a Roth immediately and still keep a sizable emergency fund. If I pursue a master’s degree instead, I’ll be able to avoid student loans even if I don’t get additional scholarships.

  35. Rick says

    #1 In order to adequately save for retirement I plan to do the following:
    a> Contribute at least 6% of my income to the company 401K plan via payroll
    deduction from each check. This amount will allow me to get the full employer
    matching contribution.
    b> Contribute $10,000 to existing Roth IRAs for my wife and myself on Jan 1st
    using cash currently in our savings account.
    #2 In order to save money that can be used before retirement and fund future
    retirement savings I plan to invest 15% of my income in the employee stock
    purchase via payroll deduction from each check.
    #3 In order to own our home sooner and pay less interest , I plan to pay at
    least an additional $1000 toward the mortgage principle this year by making an
    additional $100 principle payment with each monthly mortgage payment.
    #4 In order to save at least $1920 save for my children’s college expenses I
    plan to put at least $160 per month into 529 plans via automatic deposits.
    #5 In order to save at least $1920 toward my son’s tuition I plan to put at
    least $160 per month into a savings account.
    As for the achievable, realistic factors all of these goals are very similar to
    my 2007 goals. The difference is that last year #5 required $3000 and #1 b was
    only $8000 due to contribution limits.

  36. Don J says

    My goal for 2008 is to get serious about contributions to my RRSP (Canadian retirement plan).

    Many Canadian financial advisers recommend maximizing RRSP contributions. The limit is currently 18% of gross income, I believe, and it carries over from year to year.

    To date, my contributions have been minimal. I have decided that it is time to get serious and gain some ground. I want to put some significant funds into my RRSP, and then transfer them to an account that lets me invest those funds in low MER mutual funds. For now, though, I am only going to focus on getting the funds into my RRSP.

    My plan is to make contributions equal to 10% (specific) of my gross income for 2008 (timely). I will do this by making a contribution to my ING Direct RRSP savings account every month when I get paid (measurable). I will set up an automated transfer so that I do not need to bite my lip and make the payment every month (actionable).

    Looking at my current income, the idea of putting 10% of every month’s paycheck into my RRSP is terrifying. It does help a lot to make a commitment in a forum like this one, though! Of the components of a SMART goal, it is “Realistic” that worries me the most — can I actually do this?

    I think I can. My RRSP contributions are tax-deductible, and in my current tax bracket, that means that I will only actually be giving up about 6% of my gross income each month. Of course, I have to wait until early 2009 to get the other 4% back, so it will feel rough during the year. I need something like this to get me going, though, and I think this is it!

  37. Ken M. says

    My goal is to pay off my $6500 student loan by making $1000 payments each month from the extra money I’m making in my new job. Once the loan is paid off, I will fully fund my Roth IRA.

  38. Nicole says

    Since I have several smaller financial goals, I decided to set an overall goal of increasing my Net Worth by at least $50,000 in 2008. This will encompass several of my smaller goals. I began calculating my Net Worth in October of this year and I estimate that, as of December 31, 2007, my NW will be approximately $75,000.

    • Specific – I plan to increase my Net Worth by at least $50,000, bring my total NW to at least $125,000

    • Measurable – I will continue to track my progress at the end of each month on an excel spreadsheet that includes all of my assets and liabilities.

    • Actionable – Here are some of the steps I plan to take to reach my goal:

    o Continue to max out my 401(k) contributions (NW increase: $15,500)

    o Max out IRA contribution (NW increase: $5000)

    o Contribute $1000 per month to mutual fund (NW increase: $12,000)

    o Interest on CD (estimated NW increase less expected taxes: $450)

    o Continue contributing $1000 to emergency fund until it reaches $15,000 (NW increase: $8000)

    o Increase my student loan payments to $1000 per month to reduce principal (NW increase: $10,000)

    o Total estimated NW increase: $50,950

    • Realistic – This is a realistic goal, based on my income, and the changes I have made to my saving and spending habits over the past year. When I began calculating my NW in October, I went back and estimated by NW as of January 2007. According to my calculations, this year my NW increased from around $6000 to almost $75,000, by paying down student loans and funding my retirement accounts. This year I finished paying off my private student loan and I plan to use the money I was paying towards that loan to pay down the principal on my $42,000 consolidated federal. However, apart from retirement, I wasn’t saving as much as I should have been, because of my extravagant spending habits. In the past three months, I have gotten serious about a budget and I am tracking every penny that comes in and goes out. This has enabled me to reduce my spending drastically so I am saving at increasing rates. Since I will continue to estimate my NW on a monthly basis, I will be able to keep track of my progress and make necessary adjustments to ensure I meet my goal. These goals do not include savings account interest or ROI, so the actual NW will be higher (assuming the stock market continues to go up).

    • Timely – I have a clearly defined deadline for my goal: December 31, 2008.

  39. Nicole says

    Just to clarify, the reason why next year’s NW goal seems lower than my NW increase this year is because this year’s calculation includes interest, ROI and an $8000 discretionary contribution to my 401(k) by my employer (and also because it is a very rough estimate, since I didn’t have all the details necessary to calculate an accurate NW as of January 2007). The 2008 goal of $50,000 does not include any employer contributions, ROI or interest, since I cannot estimate those accurately at this time.

  40. Laura says

    SMART Financial Goal:
    Earn 5000 dollars by myself, not from my parents, and put in high yield savings account

    Specific: the number, 5000, is quite specific.

    Measureable: I plan to create a spreadsheet of earnings, with the date received, the amount earned, and the date deposited into the account.

    Actionable: The actions I’ll need will be to get a summer job and engage in other money-making endeavors, whether it be selling old books on ebay (something I’ve been meaning to do) or going on craigslist and looking for “gigs” for free weekends.

    Attainable: I work an on-campus job that pays 8 bucks an hour, and work that 10 hours a week for a 15 week semester, so that’s about 1200 right there for the spring and another 1200 for the fall (even if I don’t get a raise). I have direct deposit on that paycheck, so I’ll redirect it to the ING account.
    The rest, then, is completely doable with a summer job, craigslist gigs, ebay, and any other moneymaking schemes I fall into.
    Note on summer job: if I get New York State minimum wage, 7.15, for a part time 20 hour job, for 13 weeks, I’d earn 1859. And that’s only if I work part-time. If I worked 40, it’d be 3718.

    Timely: That is a very reasonable number for one year, especially considering the above math.

  41. Mike H. says

    I have a $3,000 student loan and plan to pay it off by the end of 2008. To do this my wife and I will pay $300 a month which, factoring in interest payments, will mean we make our last payment in November. We chose this goal because doing so, even though we don’t own a home, will make us completely debt-free!

  42. Angela says

    SMART Financial Goal: Save $17,000 in 2008, equivalent to 50% of my pre-tax income, while continuing to contribute 15% of my pre-tax income to my 403(b). As I did in 2007, I will also take a two week to 1 month vacation in Africa or South America either as a tourist or volunteer for no more than $2000. $750 of the $17000 will go to the graduate school application process.

    Over the past 12 months, I saved 13,285, about 39% of my $34,000 gross income. I would like to increase this proportion to 50%, or $17,000. My expenses will be lower in 2008 because I will not own a car so I will save $2120 in transportation costs. I would also earn about $809 more in 2008 in interest from a high-yield savings account. I’m going to sell a lot of my unused things–according to, some of my used textbooks are selling for about $275 total, so I’m hoping to reap at least $350 for clothes, books and never used academic software. I’ve gotten a job offer within my department with a promised raise which could increase my savings by at least another $2000. Finally, my participation in research studies is paying off, as I am becoming eligible for even higher paying studies, which should hopefully net me at least an additional $2000 in 2008.

    With these steps in mind, I think I can achieve my $17,000 goal without decreasing the quality of my pleasant but frugal lifestyle.

  43. Craig says

    I know we’ve spoke about this before but the extra income stream is huge, and killing me that I can’t be part of that right now. I really hope that over time I can save and invest in a small % of an online company to make a little extra. Anything helps. I am trying to save this holiday season and nightlife is expensive. I realized I think I need an emergency fund for an emergency fund. There are so many little stupid spendings that come up that I don’t anticipate but it adds up quickly. For example, a parking ticket, friends bday. Those little things add up.

  44. Frugal Grad says

    It really makes my heart ache to see a credit card statement on one hand and the list of Christmas gifts my family expects of me. I have been disciplined enough to reduce all of my credit card debt to a more comfortable level but if I decide to make every one happy this holidays, I will be in a hole again. What a dilemma. May be sometimes you just have to say no, but is it too cruel? I mean it’s Christmas for God’s sake.

  45. Ryan says

    Craig: It sometimes takes a lot of work to generate reliable additional income, at least of a passive or semi-passive nature (such as an online business or website). You can always work a part time job, but that is just trading time for money. It’s fine for a short term goal, but you’ll have better returns in the long run if you build an asset.

    Frugalgrad: It’s never cruel to say no when you have a reason. Taking on too much debt can harm you and your family much more than a few little gifts. The important thing here is communication. Let your family know as much of your situation as you are comfortable sharing, and let them know how important it is for you to stay out of debt. They will understand, after all, they are family.

  46. Bill says

    You hit the nail on the head concerning the need to create and maintain a budget. The first budget I ever did showed me that I had a $400/month surplus that I was spending on non-essentials. Would you pay yourself $400/month to create and maintain a budget for you?

  47. the moneygardener says

    Alternative income is awesome and most people can likely think of ways to make sustainable alternative income throughout their lives. Growing this in tandem with growing your employment income is a great way to earn more money as we age.

  48. Ryan says

    moneygardener: I couldn’t agree more. That is why I am trying to grow my alternative income as well as my salary at my day job. I’m also reading books and websites about dividend income, which is one area I want to start getting into in the near future. Right now I’m still taking baby steps. 🙂

  49. Ryan says

    Melissa: I think that all depends on the situation at hand. Many people are high performers and are extremely profitable for their company or they have a specialized skill. Many companies would much rather give a worker a raise than allow a skilled or profitable worker go to a competitor.

  50. greg group says

    This is a great article. I like to focus more on the income side while keeping my debt level stable. This creates more incremental income that allows me to build more future income streams. Thanks for sharing.

  51. Crystal @ Prairie Ecothrifter says

    I love ING subaccounts. We have 8 of them. Granted, we are sort of combining most of them and using them all up for the downpayment on a new home right now, but after that, we’ll be building towards our separate goals again.

    • Ryan Guina says

      they are very convenient. I used one for my daughter’s first savings account, until I opened her own. 🙂

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