Wednesday, February 01, 2012

12 in 12 in 2012

I’ve decided to copy my friend Amanda who recently came back to life in blog-land (yay!). She’s working on making 12 changes over 12 months. There is always that list of things hovering in the background that you never get to. I’m quite efficient at work cranking through project after project, but when I get home, I seem to lose momentum and focus. So besides having a catchy title, this is really a way for me to focus on tasks at hand. I don’t quite have each month planned out but am tweaking the goal to knock out projects not necessarily behavior (although that might be in the mix).

Well, month #1, what did I get accomplished that I’ve had hanging over me? Loans. I hate debt. I was brought up to not buy anything you can’t afford, with the one exception of the mortgage. I’m proud to say I’ve never had credit card debt, and until this century, never had any loans. But college number 3 (or 4 depending on how you count), pushed me into student loans. And then a few years back I decided to get the car I wanted with the assistance of a car loan (I struggled with this one for a long time).

I sat down this month and put together a plan to accelerate the payoffs. I just finished all the paperwork implementing the new plan. And boy does it feel good. I wrote the check to payoff the balance of the car loan – yay! I wrote another check towards the student loan – yay! And I just doubled my monthly student loan payment. If I did the math right, the loan will be paid off by year’s end! I’m on a super tight allowance but it’s doable – I’m good at economizing and this is not the first time. This 12 in 12 in 2012 helped me get out of limbo. All the guidelines say to keep the low interest loans and work on your savings. But in today’s market, with such low returns, it just didn’t seem right. So I finally went with my gut feeling. I may not have a lot in the savings account but being debt free will feel so good. I’m glad I have a plan finally and look forward to seeing the loan balance quickly reach zero!

Next up for February? I think I’ll stick with finances and work on my retirement. I’ve accumulated a bunch of 401ks and can’t remember the last time I rebalanced. My goals for February:
- Consolidate retirement into two accounts
- Update Retirement Record Book
- Determine portfolio allocations (30% mid-cap, 10% bonds, etc)
- Determine best balance between savings and retirement (how much can I manage to put away each year)

2 comments:

Amanda said...

Cool, welcome aboard! Believe me, the day you write that final check for the student loans is a glorious day, indeed.

Anonymous said...

I think you're right in choosing to pay off the loans as quickly as possible and to let the savings sit a bit.
The interest on savings, is, as you say, ridiculously low, low, low. And I'm sure the interest on your student loans was higher before you paid them off. Same for the car loan I expect.

- Mom