"A goal without a plan is just a dream." - Dave Ramsey
I shared why I still make resolutions in January. Although I do tend to love to make goals, actually accomplishing them is another story. My plan this year is to make specific baby steps, or smaller goals that lead to the overall vision I have for the year. The steps must lead to peace, although I know that the journey will contain stress and sacrifice, and hopefully not too much anxiety. The goal to financial peace is worth it and I need to keep that foremost in my mind.
So here are my goals for financial peace in 2012 and written underneath are some baby steps I have identified that (hopefully) will help accomplish these goals.
1. I would like to open a savings account, and have money in that account.
a) Go to the Superstore with Tim, by February 15th (mid-month, random day). Discuss which kind of free savings account to open and make the plunge.
b) Work toward having $500 in that fund. Any extra money each month will go toward the fund, as well as all of my teaching piano money. (Hope to have reached this goal by May 31, 2012.)
c) Don't touch the money, unless it is a real emergency!
2. I would like to make a significant dent on our debt this year.
a) Create of list of all of our current debt, interest rates and minimum payments.
b) Once the savings fund is complete, start by paying back our smallest debt first. This is regardless of interest rate, and called the debt snowball. The debt snowball basically means that you pay off the smallest debt you have first, regardless of the interest rate. You still make minimum payments on all other debt. When your smallest debt is paid you take the money you were using for that debt and throw is all onto the next largest debt amount. That way, you build intensity as you go. (I may switch around the rules a bit and pay off my personal Mastercard first. It has an incredibly high interest rate, far more than our student line of credits and student loans.)
3. I would like to complete the "Financial Peace University" course.
a) There are 13 lessons in the course, and I would like to work through one lesson every two weeks. This means making time to do this and do to the coursework. I would like to listen to the first lesson (again) on Sunday February 5th, which would mean that we would complete it by July 31st 2012. (That gives me a buffer week as well.)
b) Each lesson includes reading from "Financial Peace Revisited" by Dave Ramsey and homework such as creating budget worksheets etc. I hope to work together with Tim on this and touch base every Sunday evening on our finances and how we are doing with homework.
4. In order to work on all of the above, I need to create and stick to a budget!
a) We will work through this with the course above. In the first week the homework is to create a mini-budget.
b) By April 1st I would like to evaluate whether we need an online tool to help track our finances. That may be My Total Money Makeover, YNAB, Mint or Pear Budget.
I love Bari Tessler Linden's approach to think about your money story, re-name some of those budget categories that you dislike, eating a little chocolate, and body check-ins. I had access to her Introductory Video Course when it was first released (for free) and I still think about some of her concepts and ideas. She approaches things from a financial therapy perspective and has a wonderful, gentle tone.
Here we go! I have no idea how long this journey will take, perhaps years? If you are in a difficult financial situation, take comfort and know you are not alone. Muster the courage to look (by Bari) and begin to take baby steps to change.