Thursday, January 28, 2010

Financial Goals for 2010

John Wesley said "Gain all you can, save all you can, so you can give all you can." As a result we need to frame our financial goals with God's plan for us.

Here are some of our GOALS for 2010:

GIVING
Increase Giving Goal of 15%. We were pretty consistent with our tithes but we were a little slack with other charitable donations. With the Haiti earthquake, we are going to give a little bit more. We've been listening to some sermons about being a good steward of God's resources. The question shouldn't be how much should I give, but how much does God want me to keep for ourselves. So giving should be number one priority for financial goals in 2010.

MORTGAGE
We are at about 86% of our mortgage which means we are still paying PMI, about $100 extra a month. We need to be at 80% which means we have about $13k to go from $185k to $172k.

LOAN REPAYMENT
We took out a 14k loan from my TSP last year when we were doing renovations on the house. Since this money is mine, I decided to pay this off first since this is money that goes into investments. For 2010 I will be putting in around $500 a bi-week or about $1000 a month. Since we have about $12k left on this loan, we should be able to pay this off this year (God willing).

So for the house and PMI, we are paying an extra $500 each month to pay down principal. At this rate, it will take about a year and a half to get to the golden 80%. We'll see if this is wise. Dave Ramsey says to pay down your smallest debt first. Then attack the next one. This is the debt snowball plan.

BUDGET
As for our budget, I am making about 80k which includes salary, bonuses, and investments. After taxes we are bringing in about 4k a month. So for budget goals, we hope to spend about:
  • 45% $1400+500 Mortgage
  • 15% $600 giving
  • 10% $400 for food
  • 7.5% $300 utils (phone, gas, electric, internet, water)
  • 5% $200 auto (gas, insurance, etc)
  • 12.5% $500 loan repayment (which most will go to TSP)
  • 5% $200 savings/investment
Hopefully as things progress, we'll decide what to get rid of first, but it looks like our mortgage payment of around $2k a month is a bit excessive in terms of our financial goals. But I personally really want to get rid of the PMI payments. Tell me what you think.

What can a budget do for you?

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