The state of my finances

Part of goal-setting involves monitoring your progress. I do this mentally on a regular basis, but sometimes it’s good to step back and actually write out the bigger picture as well. I believe that it’s good to do that at least annually. Here is a checkup on the money-related goals I am currently working toward:

1. Create enough income to continue to pay all bills on time and in full. This is a goal that will likely remain in the status of “ongoing” for quite a while, at least until I reach my passive income goal. Currently my methods of creating enough income include a job, my businesses, various side jobs, surveys, Treasury bonds, and interest.

2. Have $300,000 or more earning 5% or greater interest for passive income. I’ve got a loonng ways to go on this goal. Currently my passive income comes from Treasury bonds, interest on online savings accounts, and a tiny bit of writing that’s been sitting for months on Helium. For now my only related mini-goal is to buy one Treasury bond every 3 months. I also have the vague “save money every month” idea, which needs to be clarified. I need to set some additional, smaller goals to help me achieve this in a timely manner.

3. Continue following the YMOYL program. I re-read portions of the book at least once a month, visit the Simple Living forums, track my expenses, chart my income & expenses, and keep track of my net worth. I’ll be concentrating more on the life energy aspect of it, because I think that is the most important part.

4. Reduce expenses and increase income. Our grocery expenses have gone down quite a bit for the last several months, although I’m not sure why. But I’ll take it ;) We’ve also cut out bottled water, both for monetary reasons and for the environment. I joined a gym, which averages out to just under $19 per month. Obviously that’s an increase in expenses, but hopefully it will end up a decrease since I will probably start eating out less as I exercise more. I’ve also cut one of my significant business expenses by two-thirds.

5. Pay off our mortgage by December 2011 or sooner. We’re making progress toward this. We paid an additional $545 toward principal this month, and are increasing it slightly every month. (Plus of course we’re paying less interest each month, which results in an additional amount going to principal each month.) We’ll be increasing this more significantly as we increase income & reduce expenses.

6. Teach my son good money habits. I’ve gotten my son set up with a regular savings account, an ING account, and gotten him using Quicken. (Although he’s pretty reluctant about doing that.) He has learned how to use an ATM card. He’s learning how to manage his cell phone minutes. I’m in the considering stages of adding him as an authorized user on my American Express. We talk about money openly, which I think is a good thing. I’m considering increasing his allowance dramatically (we’ll see if he’s reading this!) and having him take more responsibility for his purchases. I need to be better about saying no.

7. Fund part of my son’s college education. I’ve been saving a minimum of $50 per month for this. (I did say PART!) Occasionally I save more, and I will match whatever he saves if I possibly can.

8. Fully fund my IRA each year. I have sent in $1000 so far, so that leaves $3000 to go. I intend to continue sending in $500 per month which means I will reach this goal by December. I also completely funded my 2006 IRA in April. Next year will be a lot easier, since I’ll only have to fund one year’s worth during the year.

I’ll be adding some new money goals as well, such as:
– Increasing my 401(k) contribution by 2%.
– Opening a non-retirement investment account. (Probably an index fund, which means I need to save up $3000 for that.)
– Continuing to save regularly for vacations. (That’s so much a no-brainer for me that I didn’t even have it listed as a goal before — I just did it.) Won’t hurt to write it down though.