2012 Money Goals

With the first quarter of 2012 coming to a close, I will be sharing with you my financial progress report. But first, I should explain what my goals are. Listed below are my simple goals for 2012 organized by category.

Savings

  • Have two months living expenses in a savings account. I.e. an Emergency Fund. For me this would be about $1000. In the past I’ve had a much smaller E. Fund, but my income was to low one month and I have yet to build it back up.
  • Make sure I am setting back money for Taxes, I am learning this the hard way on my 2011 Taxes. My goal on this for 2012 is to owe less then $100.
  • Have a slush fund of sorts – I have a few expenses I always forget to plan for (Oil changes, web hosting, etc) My goal for 2012 is to get the big offenders out of a slush fund.
  • Finally, I want to have money saved up for a place to live. From my last post you can tell I would much rather start small and pay for the house outright. But at the moment it looks like I may have to rent until I get enough saved.

Debt

  • The only debt I have currently is a student loan. I hope to have at least $750 of the principal paid off by the end of 2012. I really wish it would be paid off by December, so I may throw some extra money into it.
  • I do have a credit card, but it’s a secured credit card with a $200 limit. It gets paid off every month if I use it and in 2012 I hope to use this card less. When I first got the card I placed $120 on it and since the start of 2012 it hasn’t been over $60.

Income

  • I own a business and I really hope to have it take off this year. In 2012 my business grossed about 10k or 11k. Almost half of that is from subcontracted services. In 2012 I want to see my business pass the $20,000 in gross sales mark.
  • I also want to┬ádiversify my income and for 2012 I want to start having passive income. I am not sure what I’ll do yet, but I would like to set a goal of having $250/mo by the end of 2012.

Expenses

  • I plan to sit down at the end of this quarter and examine all the money that I paid out and find ways to reduce it and to make a budget. I used to follow a budget but then I got a car and it just went out the window.
  • This is in relation to savings also. But the money I don’t spend on an Item I want to start saving away. I used to buy snacks and pop often and I would like to add to my savings every time I get the temptation, instead of buying.

Well that’s my 2012 Money Goals as of right now. Make sure you check back in Mid April for my first quarter financial report to see how much or little progress I have made.

 

16 thoughts on “2012 Money Goals

  1. Well that is a very vague question.Debt or Saving.Lets say your debt is a car loan @6%I would say uensls you can pay it off, there is no point in paying extra. Because you will not increase your cash flow, and depending on where you are in the loan you may be saving very little in interest. Say a 5 year loan and your in the 3rd year of payments. You already paid most of the interest.Lets say your debt is a credit card @ 15% I would pay that down immediately. Because that increases cash flow and reduces interest being paid. Say you owe $6000 on credit card. Your minimum is probaly around $150/month. but of that $150, roughly $75 is interest. Pay that down $4000 and your minimum payment drops from $150 to $50 (increased cash flow) and your interest drops from $75 to $25.Sometimes it is better to pay off debt, sometimes it is better to invest. As a rule of thumb if the interest rate is 8% or higher pay off the debt as fast as you can. If the interest rate is 6% or less take your time paying it off and invest your money elsewhere (that doesn’t mean spend it wildly on useless crap) When the interest rate is between 6% and 8% it depends how good of and invester your are and what other options you have for your money. A safe bet would be to just pay the debt because it is guaranteed return. But every situaton is different.References :

    • An alternative to a bank might be Prosper.com.Prosper is an oninle community of people like you and me that lend money to each other. Here’s how it works:You apply for the loan through Prosper. They verify your identity and pull your credit. They post your score in the form of a grade (A,B,C, . . . F) so people don’t see your actual score.On the page where you apply for the loan they let you state your case. You tell them about yourself. About what you want the money fore. What you’re going to do with it. etc. Be specific. Be personable. Explain why your credit is bad if you want and how you plan to pay the loan back.People read your application and they bid on how much they will loan you and at what interest rate (Don’t worry. There’s a cap). So Joe Smith says he’ll give you $5,000 at 10% interest and Mary Jones says she’ll loan you $10,000 at 12% interest. Once the entire balance has been met (and it might take as many as 10 or more people loaning small amounts) the loan is established.Prosper wires you the money and sets you up on a 3-year payment plan. Payments are taken directly from your bank account and paid back to all the people that loaned out the money.Hope this helps! Was this answer helpful?

      • If you have an interest only , you betetr have a plan to get it paid off before the interest only period ends. Refinance, pay it down significantly, whatever, but if the interest only period ends and you still owe the full $ 169K, you are in for a HUGE surprise.But, on to answering your question.Pay down your with some of your money, and invest the rest. On average over any 10 year period, the stock market will make an average of 10% a year. There will be good and bad years in that time frame, but over the long term, you can realistically predict around 10% growth.On the other hand, paying off your is a guarenteed return of 5.25%. That is, instead of giving the bank that 5.25%, you are keeping it in your savings.My advice is do both. The less you owe, the betetr your financial health will be. The more you have available from investments, the betetr your financial situation will be.If it was me, I would invest around 50% of my available money, and use the remaining 50% to pay down the . As the mortgage balance decreases, alter the percentages appropriately. More to the investments, less to the mortgage.

    • Yes it will help your score somewhat, but you will wait for a long time to see the insarece! I would more than double your minimum payments because a percentage of your credit rating and score is based on how much credit you have and how much is used up!Go to my website because you will learn a lot from here and after I went through ID theft and bankruptcy I still got my score up from 486 to 730 in a little over a year, so this is something I know about!It would also take a long time to post everything you should know here and you will benefit from the how credit scoring works section too!

    • Depends on if you are even able to refiHow long have you had the loan?How old is the car? mileage?What irsenett rate?How much do you owe?Is what you owe more than what the car is worth?Most times, if you have a car loan with a high irsenett rate, you are going to be underwater with the loan for years which will make it near impossible to refi it. You would owe more than it is worth, and no lender is going to see that as a good deal!

      • If you’re not applying for ceridt, then it doesn’t really matter whether you have good ceridt or bad ceridt as long as you are paying your bills on time now. The difference comes, though, when you want to establish a new line of ceridt (house, car, new ceridt card, etc.). Someone with good ceridt (low balances, always pays on time, high ceridt score) will get a better interest rate than someone who hasn’t always been responsible with their money. Simply put, your ceridt rating reflects how good/bad a risk you are to loan money. Lenders would demand a higher rate of interest if they were more concerned about your ability or willingness to pay your bills on time.

    • if you want a good interest rate stay away from used cars it used to be you could buy a used car cphaeer but the interest rate will really hurt you now if it was me i would buy new trust me you will come out alot better

    • It’s a tough situation. Basically, you syaing that you aren’t in a good position to repay a loan (bad credit history) but you’re looking for someone dumb enough to lend me money instead of somebody else with good credit.For me, I built my credit first with a retail card, like a department store. I bought some stuff, then paid it off in full. That history told the credit reporting agencies that I could repay a debt, which made the credit cards have lower interest rates. But if you’ve already got a bunch of cards that you can’t afford, it’s a bad situation. You borrowed money that you can’t pay back. They best thing to do is see a credit counselor, and plan a real budget and stick to it.

  2. pay off your debt. Paying off debt will help your credit score. Also debt gacrhes higher interest rates than savings does. In other words your Visa may be charging you 10% interest. For every $100 you owe they charge you $10. But the bank only gives you 3% interst (if you are lucky). So for every $100 you save they give you $3. So you do the math would you rather pay off debt and save $10 or put money in the bank and save $3? Pay off your debt!If you want more on this pick up a copy of The Total Money Makeover by Dave Ramsey. Get it at your library. Its a great and easy book about getting out of debt. It really helped me a lot.References :

  3. the answer to that ddeneps on your current credit score and the factors affecting it. you need to meet with a reputable mortgage loan officer, have your credit run and go over your finances (income and assets) with them. if, with the scores the way they are, you qualify for a new mortgage while carrying the debt then the choice is yours. if not, the loan officer should run a program called a credit analyzer which will tell you what debt to pay down and how much to pay and approximately what difference you can expect in you credit score. the goal of raising your score is to have you qualify for ALL future credit (your new mortgage, future credit cards, car loans and leases etc) at the lowest rate possible.keep in mind, many lenders are now eliminating no down payment and small down payment programs and many of the ones that are left require higher credit scores so the meeting with the loan officer and determining how best to use your money is a must. sometimes even a slightly larger down payment can make a big different in your rate / payment.

    • Yes and no. Credit scores are like plmpies, they come and go. The only way to improve your credit scores is to not use it and when you do use it, use it wisely.I HIGHLY recommend you pay off your debts. When you do pay these off, ask politely for a Pay for Deletion . By this ask your creditor that you agree to pay in full and that you wish to ask for them to delete to negative account from your credit reports. If they don’t do this, don’t worry. A paid in full is better than a collection or charge off.To best serve your credit score use the following simple logic:* If you don’t have the money don’t buy it.* If you use your credit, use only 30-40% of it. When you get anywhere near your over all limits your score will go down.* Don’t apply for credit more than you need to. It costs you points everytime you apply.If you need credit for a car/mortage or financing do the shopping on your own and get a pre-approval. Shopping for cars at dealers and letting them run credit reports can be vary costly because in most cases they run willy nilly often pulling hard credit requests for up to 10 different people causing a huge credit drop.Again, taking care of your debts will help however it will take at least 3 months before you see anything noticeable. On the flipside of being patient if you satisfy everything today you will be rewarded with credit lines of 8-15% rates instead of 22-25% rates and you will save tons of cash in the long run.Check out for a all you could ever want to know (and what they don’t want you to know) about credit.

  4. There are several banks and other lnenidg institutions that refinance cars. Lending Tree is one of them. Just be sure to research carefully to validate a company’s credibility.Your interest rate may not improve by too much because of your score, but you still may be able to save some money. As I understand it, your car must be worth more than you owe on it to be eligible for refinancing. You should probably estimate your car’s value using the site below.Good luck.

    • well i think around 675-720 is good.. anhtying over 720 is great 550- 674 is above average 400-549 is about average anhtying lower then 400 is bad.. but i would say still salvageable unless you go below 200 then it would be really hard i say this because my score has all ways hovered around 669 due to an old account but recently i had a payoff which upped me to 678,, at which time my interest rate dropped about 8% to10.5% and i was able to get 2 5000$ cards at 8.9% fixed interest wich i think is awesome.. don’t know if i could get lower on that.. hope that helps you some

  5. I always reoenmcmd a credit union. Check locally to see if you are eligible for membership at any local credit unions or even at your workplace. Credit Unions usually have better rates than banks and much better rates than finance companies. They are also more understanding of past credit mistakes than banks are. Good Luck

  6. Pingback: Progress on Emergency Fund | Staying out of Debt

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