2008 Financial Goals

I've been working on a set of goals for 2008. I first started thinking about the categories I want to improve. The first of course is debt reduction (Credit Card debt specifically). In addition, I want to improve our Net Worth, Retirement and our Cash Position (checking and savings balance).

I tried to choose areas that need to go together. I don't want to just focus on the credit card debt and eat away our meager cash and retirement. Doing that wouldn't help our net worth either as we would be using assets to pay off part of the liability. So, below are the goals spelled out along with what our expected starting balance will be and why I chose the amount for our goal. I'm trying to stretch all of my goals a bit past my budget plan to encourage me to not slack off the budget and to find more ways to make money to increase the income line.

• Credit Cards: Balances down to $30,000. I expect to have total balances of about $39,000 at year end and I have $800 a month figured to pay on those. That means, with interest charges, that budgeted amount won't get me there completely.
• Net Worth: Balance to $0. Yes, I want to be out of the red at year end with this category and we are currently a -$16,000 or so. That's a big step, but paying off $9,000 in credit cards gets me over half way there. The increases in retirement and cash listed below should easily get us the rest of the way there (even neglecting any changes in other asset values such as car and house).
• Retirement: Balances up to $15,000. I'm expecting to be right about $6,000 by year end with my last couple of pay check contributions. With my contributions and my employer matching the last 9 months of next year, that should add about $8,000 to it. Of course, that is still a little shy of my goal, but hopefully we'll have an okay enough year in the market to get the rest or I'll be able to stock away a little extra (pun intended).
• Cash Position: Checking and Savings total balance up to $10,000. This is pretty aggressive if you ask me, but I need to go for it. We are currently bottoming out at about $3,000 in our accounts at the end of November. December might be a wash, but January should be a good start. By taking better control of our money and keeping us on a budget in the checking account, I hope to transfer any money we didn't spend every 2 weeks back to the E*Trade savings account and only rely the next 2 weeks on my automatic paycheck deposit for our budgeted amount ($575). That way we will have to plan ahead for big extra expenses to pay cash by moving the money ahead of time while still getting the benefit of interest as well.

Well, that's what we'll be shooting for by the end of next year. Each month next year, along with my net worth update, I'll share our goal status as well. Keeping us honest and on track will be something new to deal with each month, so wish us luck!