2011 Goals

Here we go ...

1) Religious/Spiritual 
     A) Continue to Tithe - one of my big wins in 2010, let's keep the streak going!
     B) Start a daily religious practice - I tried to get really specific about this last year, and ended up burning out. Rather than setting up a to do list, I want to give myself 15 minutes a day where I pray, meditate, read the bible, write in a gratitude journal, sing, or do whatever the spirit moves me to do that day.  Once this is a regular activity, I'll see where my spiritual journey needs to go.

2) Health
     A) Eat within my Weight Watchers points every day - I weighed 169 lbs on the scale yesterday, which puts me 21 pounds over my "thin" weight and 12 pounds over my lifetime weight.  Rather than worry about a time line and a weight goal, I'm just going to eat right and exercise.  I'll re-evaluate in March - if I'm not losing weight, I'll worry about it then.  On that note ...
     B) i. Exercise six days a week - I have Judo 2x a week.  I'll go to the gym the other 4, even if it's just for a light, 20 minute swim.  A sub-goal, because I am this anal, is to ii. make the check-in list at my gym every month.  To get on the list, I must check in at least 17 times a month.

3) Financial
     A) Have a side business (or multiple) netting 1K a month before taxes by December 2011  I've got several ideas on this front, from farm eggs to online jewelry.  I need to just keep plugging away at it until I find something(s) that works.  More on this as events develop.
    B) Fully Fund 2011 Roth IRAs Needed - 10K, currently have 0K - see 3A
    C)  Save in anticipation of (hopefully very temporary) loss of primary income.  It's coming.  The more I can cut from the budget, and the more I can sock away, the longer we'll have before we have to make desperation kinds of decisions.

4) Dreams
     A) Get the farm books in order, facilitate farm improvements, and manage the goats.This year, I am going to take over the farm bookkeeping.  This will free up my Mom to assist the new farm manager into transitioning into his duties, incorporate the new 152 acres into the property, and work on a national lecture tour, which is one of her big dreams.  She's actually speaking at the 2011 Southern Sustainable Agriculture Conference in Tennessee later this month, her first national conference.  I also need to manage the goats more closely.  We've been in growth mode on the herd for a long time, but now it's time to maintain what we have and begin to cull the bottom 10% and replace it with better genetics.  This will require near-daily monitoring to watch for health problems, as well as miscarriages and stillbirths.  It will also require meticulous record keeping.
     B) Begin again on piano  Talked to my dad about this today and we are going to get started again.  My goal is still to be able to accompany at my church on the piano when our current organist is out of town, busy, or sick (our back-up organist is very talented, but she's over eighty, and won't be around forever).
     C) Re-connect with my Chinese friend  We got busy and it stopped happening, but she's a sweetie and I need to spend more time with her.  Also, it's fun to speak Chinese, at least until I run out of words :)

5) Prosaic
     1) Practice with my carry firearms at least once a month This was a big fail for me last year.  I was late getting my Louisiana permit application in last year (long story), so I don't have a valid carry permit and probably won't get one until mid-March at the earliest.  The silver lining is that this gives me time to brush up before I am carrying again.
     2) Consistently do Flylady routines.  Last year, I decided to give up having a housekeeper and do my house myself.  When I follow her routines reasonably consistently, my house is acceptably neat.  I am not trying for Martha Stewart neat, just reasonably not dirty.

Accountability 
In an effort to give myself some accountability, I'm going to review these goals monthly on the first of every month.  Wish me luck (and good health too, please).

Happy New Year!

I'm happy because I paid off one of my two family debts today!  It was the one that I had earlier planned to pay off in June 2011, but I decided to cash out my Roth 2011 fund (I am fully funded for 2010) to pay it off now, then use what I was paying toward the debt to refill the Roth kitty.  I'm comfortable with this - I have 15.5 months to come up with 10K in Roth money, and there's an incredible sense of relief in just getting this debt paid off as it's been hanging over my head since 2003.

Now I have one family debt and one school debt remaining.  Combined, they come to about 2/3 of our take-home income.

If our income stays reasonably steady, and we keep on track, we can pay it off in three years.  However, I have no reason to anticipate a steady stream of income; that's not how it works in the computer industry.  We've had steady income for a bit less than three years at this point, which is not quite a record, but getting close.  I figure things will change sometime in the next year, so I'm about to start socking away all extra money in savings in preparation for whatever comes next.

2010 wasn't the most efficient year ever for me due to heath issues.  I'm hoping this year will hold more accomplishments and fewer doctor visits.

Heading into the new month and the new year, I still have $7 in my toy budget.  I can't think of a better way to ring in the new year than ordering Silent Blade and snuggling down in bed with my iPhone.

More About Balance Transfers

Balance Transfers are a good way to reduce debt faster
As I said yesterday, a large part of my success in paying down my debt was using balance transfer offers.  I can't stress enough how much faster you pay off your debt when you transfer a high interest balance to a low interest one, as long as the transfer fees don't eat up your savings.

Moving from a higher fixed interest rate to a lower fixed interest rate is generally a good deal
For example, if you have $15000 on a 22% card and the transfer fee is 5% to change the rate to 10%, at $300 a month paid toward that card it would take you 136 months to pay it off at 22% and 70 months at 10%, including the $750 you will pay in transfer fees.  

Teaser rates can also help pay down your debt faster
I realize that most offers nowadays aren't a fixed rate forever, they're usually a teaser rate, then a higher rate later.  For instance, today Discover is offering 0% for 18 months, with a 4% transfer fee, then a rate that ranges from 12% to 23%, variable.  If you can pay off your balances in 18 months, then it's a savings on any rate 6% or higher.*

If you can't pay off your balance, then it's a bigger savings at rates of 6% or greater until the rate resets.  Therefore it is a good deal if (a) you can pay it off rapidly after the 18 months or (b) you can transfer the balance again before the higher rate kicks in.  You can calculate (a) by taking the current balance of the loan, subtracting out the payments you will make over the next 18 months, then running that number through a balance calculator that shows you total interest paid, using the number of months after the 18 month period is up that it will take you to pay off the loan as the number in the debt free deadline.  (b) is pretty much a matter of looking at your credit score and guessing.

If you can pay off your balance in less than 18 months, it may or may not be a savings.  You can calculate whether it is a savings by running it through a credit card calculator like this one, using your current interest rate and the time it will take you to pay off the loan.  Then compare the total interest paid to the cost of the balance transfer fee.

It's no fun, but it helps in the long run
As I said, I did this pretty much constantly for the first two years that I was paying down debt, until I got a 3% for the life of the loan offer from Amex and could transfer all of my credit card debt there.  It got really tiring; I can't tell you how happy I was to pay off my last revolving debt on that Amex .  But it saved me a ton of money over trying to pay down the cards at the original rate.

* Because the balance transfer fee comes out of the original total, and credit card rates are compounded daily or monthly based on the debt at the time of calculation, you don't pay more in interest until you reach a 6% interest rate.  (It's actually a number greater than 5.5 and less than 6, so I rounded up).

Debt Organization

The Next Steps to "Out with the Old, in With the New" are to clean up your debts and to create a debt repayment plan.  I've been working at this debt repayment thing since 2005, so my debts are pretty consolidated at this point.  I've got three left - 2 interest-free loans from family members, and my student loan consolidation at 1.65%.  So there's not much cleaning left to be done.

As far as repayment goes, I've decided to throw everything at the family loans first, because it bothers me way more to owe money to my family than it does to owe money to a big bank.  Basically, I'm putting aside enough each month to pay family debt #1 in full in June 2011.  Then I will start paying down family debt #2, but I don't anticipate being able to pay it off until July 2012.

In August 2012,  I will start on my student loan, although my plan for it is a bit different.  Since the interest is only 1.65%, I anticipate being able to make more than that, risk free, on a savings account when I can start throwing money at it.  So I plan to save extra money until I have enough in a savings account to pay it off in full, then make that my account for automatic withdrawals and leave it be for the next twenty years or so.

But the reason that my debt is so manageable now is that 5 years ago I did everything on the Simple Dollar clean up list, multiple times.  I played the card transfer game all the time.  Basically, I would find a card that would give me 6 months or more interest free, transfer my debt there, and then pay it  down as much as I could before it was time to transfer it to the next 0% offer.  Eventually, I got a 3% for the life of the loan offer from Amex, transferred all my balances there, and then didn't use the Amex card for years until I had the loan paid back (this was back in the bad old days when credit card companies were allowed to pay off your lower interest rate loans first).  I was always careful not to pay more in fees than I was saving in interest when I did balance transfers.  And it worked: I paid those loans back far faster than if I'd continued to pay off my original balances at the original rates.  So, if you have credit card or other high rate debt, I encourage you to spend some time on bankrate or a similar site and see if you can do any better than you are now.

Net Worth Calculation

Per day one of The Simple Dollar's out with the old, in with the new, I calculated my net worth today.  I'm afraid that I'm a bit like Babci when it comes to hard numbers, so I'm not going with exact figures - but although my net worth remains negative, it is about 3% of the negative number I got when I first sat down in 2005 and figured out just how much trouble we were in (answer: a lot).  Basically, since then, we have improved our net worth by paying down debt and saving for retirement.

Paying down debt
This is pretty obvious.  As the debt goes down, the negative side of the net worth calculation goes down, making the positive side count more.  

Additionally, that nasty interest that makes the negative number go up every month, even when you are not adding debt, becomes a smaller and smaller factor.  When we started this journey, we had debt on which we were paying 22% variable .  Now our highest interest rate is a fixed 1.65%.  We got there through a combination of paying down high interest debt and transferring it to places with lower interest. 

Saving for retirement
We are a long, long way from retirement, so the smart place for our money to be is in equities.   Because we didn't panic, and kept our money in (and kept putting money in) through the 2009 crash, our retirement accounts have actually grown past the value of the money we originally invested in them by about 6%, even though we had 2/3 of our money invested before March 2009.  Naturally this number fluctuates every day, but I am comfortable that it will continue to reflect a broad upward trend over the years.

Because most of our net worth is in retirement savings, we also have a big pile of debt remaining.  But I am comfortable with my decision  to put money into retirement accounts rather than debt repayment for two reasons.  First, because the interest rate on our debt is low, so the cost of paying it off over time is low.  Second, because Roth IRAs (where all of our retirement money is located) are a very good deal if you believe that income tax rates will be higher for your tax bracket in 35 years, and putting money into Roths is a use-it-or-lose-it deal every year.   So I am paying the taxes and interest now for the comfort of knowing that, in retirement, my income tax rate on this money will be 0.

Anyway, it has been a while (at least 6 months) since I calculated our net worth, and I was pleasantly surprised by the result.  If we are able to keep up our debt repayment at our current level, we will have a net worth of $0 in 3 months!  This will a huge milestone for us; we have had a negative net worth since day one, as I brought a ton of student loan debt into the marriage. 

Have you calculated your net worth recently?  Was it a surprise or not?