Friday, May 9, 2008

Frugal Friday: Financial Goals

Are you setting financial goals for yourself each month? Each quarter? Each year? It's been studied and proven many times over that if you will WRITE DOWN YOUR GOALS you will be more likely to achieve them.

Earlier this year I set a goal of accelerating the payoff of our mortgage. My husband received a raise at the end of December that netted us $65 per month so we started putting that money on the principle of the mortgage each month. Then in March I saw that the interest rate on a 15 year mortgage had dropped to below 5% so I contacted a local mortgage broker about doing a refinance. We had a 30 year mortgage fixed at 5.75% so we didn't have a bad deal to begin with. About 2 weeks ago we completed the refinance and are now the proud owners of a 15 year mortgage fixed at 4.875%. Yes, it raised our monthly payment by about $200 per month but we will save tens of thousands of dollars on interest and will have the mortgage paid off so much sooner. We hope to be able to accelerate this mortgage, too...maybe next year we can start that depending on our finances.

My next goal is to shop around for better prices on insurance (car, home, and life). We are currently spending about $300 per month total on all three of those insurance policies and I think I can reduce that without compromising the levels of coverage we have. Speaking of insurance, do you have adequate life insurance? Even if you are a stay-at-home mom? Think about what it would cost to "replace" you as a mom if your family were to lose you. In my case, my husband would want to continue to homeschool so he would need a nanny/tutor for our kids. That's pretty expensive! And make sure you are getting the best value for your money by buying term insurance and not whole life.

One financial goal I have for this year is to start making money through some sort of home business. I've got several ideas I'm working on right now and am planning to use some of our stimulus check to pay the start up costs. When I decide exactly what I'm going to pursue I'll let ya'll know.

So what are your financial goals? What are you doing to achieve them?

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