Current Financial Goals and Plans

Have you ever heard the saying, “if you fail to plan, you plan to fail”? I'm not exactly sure who originally said this but it is one of my favorite quotes. This quote can be applied to multiple areas of your life and not just your finances. Without a plan, you have no clue where you are going or how to get there. Not having a plan is like trying to make it from the East coast to the West coast without a map (or GPS these days). You know the general direction but you don't know an exact route. Just like a map can guide you from Point A to Point B, a good financial plan can serve as a roadmap to financial freedom.

I usually review my financial goals/plans at least three times a year. At the beginning of the year, I usually make my financials plans for the coming year. At the middle of the year, I'll review my goals and add or delete goals as necessary. In December, I review my goals for the year and determine which goals I completed and one's that I need to work harder on.

Here are my current goals/plan for the rest of this year:

Cash Savings. I set a goal last year of having at least $50,000 in cash savings by December 2010. As of this post, I am approximately 80% of the way there. I know some of you may cringe at the thought of having so much cash sitting idle and earning almost nothing in interest. Yeah, I know but I feel better knowing there's a nice cash cushion for me to fall back on should I need to do so. I also like knowing if I had $50,000 in the bank yesterday, I will have that same $50,000 today. I don't have to worry about some crazy happenings in the stock market causing the value of my account to fluctuate daily. I'm not a big fan of the stock market and I only do minimal investing outside of my 401k. Once I hit my $50,000 goal, I do plan to put a little bit more money in the stock market.

Debt. Looking back at my financial spreadsheet, it appears that at the end of the month, I'm only decreasing my debt (mortgages, student loans) by about $700-800 a month. My goals is to decrease the principal balances on my debt by at least $1000 a month. I'll only need to make minor changes in my monthly budget to accommodate the additional money. I usually get a nice bonus at the end of the year and I plan to apply most of it towards my debt.

Expenses. At the beginning of the year, I've been using a zero-based budget based on expenses of $4000 a month. Basically, at the beginning of each month, I transfer $4000 to my checking account for that month's expenses. Once that $4000 is gone, I can't spend anymore money for the month. (If an emergency pops up, that money comes from my short-term savings account set aside specifically for infrequent expenses. So far, this has worked great and I've had $200-300 left over each month.

Do you have a financial plan? What are some of your financial goals? How often do you review your goals?