2012 Financial Goals

Having goals is an important part of life. I believe having financial goals is often over looked thanks to low mortgage and interest rates. It seems that people would rather get what they want now, and waste extra money on interest over the span it would normally take to save up for the desired item or service.

I personally DESPISE interest with all my being. Actually, the one thing I despise more than interest is paying interest on interest. The last time I had to repay my line of credit, I would always pay the interest back the same day it appeared in my account so that I would at least limit the amount of extra interest that accrued. My hatred for interest is what drives my financial goals and sets me apart from my fellow bloggers.

My financial goals for 2012 are geared towards eliminating debt rather than increasing my financial investments. Here they are in no particular order:

Pay an extra $1,000 a month on my mortgage.

When I make lump sum payments on my mortgage it goes directly to the principle. Since I've started mid 2011, I've lowered my daily interest by $1.00 a day by making $1000 contributions every month. With my remaining 4 years on my mortgage term, that's $1460 that the bank doesn't get. If I can keep it up they will receive even less of my hard earned money. Wish me luck!

Contribute $5000 to my TFSA

I think TFSA's are a great investment vehicle. If I can save $416.66 a month I will be able to maximize my TFSA to its full potential and help build my tax-free dividend machine. This year in my TFSA account I stand to make $877 in dividend income, completely tax-free. If the stocks I own increase their dividend, then the amount I make will be even more.

Pay off my wife's student loan

For over the last three and a half years, we have been able to destroy my wife's $40,000 student loan with only $10,000 left to go. It will be a great feeling to eliminate this helpful yet annoying debt from our backs and there will be much celebrating to do once we make the last payment. One could only imagine the amount of interest we would have had to pay if we only made the minimum payments.

Sock away $50 a month into slush funds

 

I kept $10,000 in an emergency fund in case life happened; then I got married and it ALL went away. Then I managed to save up another $10,000 from working lots of overtime and it made me a whopping $100 in interest a year. Then I decided to put that money in my TFSA and invest it in blue chip stocks. Now that same $10,000 makes me $452 a year and is now worth $15,632.

 

I don't like large amounts of money sitting in an account waiting for an emergency to happen and get paid a dime while the bank makes a dollar on MY money. I'd rather use our line of credit if we need emergency money and pay it off as quickly as possible. Instead, this year I plan to create three slush funds instead of an emergency fund. One slush fund is for our vehicle maintenance, one is for house maintenance and one is for household purchases. I will keep adding money to each fund until it reaches a certain amount then re-direct the amount of money into each fund as it's used. Since it's only a total of $150, hopefully it will not be missed each month and will be allowed to grow fairly moderately.

My financial goals are not very exciting and may seem very boring but the last I checked, anything to do with finances was never very popular. My goals are set and in my mind can be easily accomplished with a little bit of willpower and drive. Even if I can't make all of them, at least my attempt will lead me in the right direction.

What are your 2012 financial goals? Leave a comment and tell me what you think of mine.