Well, 2013 is in full swing. The economy is still suffering, but prices on goods are still rising and fuel prices are edging up. Everything is going up, and the general financial state of a whole lot of people is yet again going down. It’s time to dig in, buckle up and make a plan.
I have prepared some goals, readied a plan, decided to put a stop to my financial slide, and see if just maybe I can become debt free in 2013.
Create a Budget
One of the first goals that I will implement in my lifestyle will be a zero-based budget. This type of budget is one where you spend every dollar you anticipate to make on paper before you have the money in hand. For example:
- This bi-weekly paycheck I will receive should be for $1357.53.
- I will sit down to calculate all the bills due, cost of groceries, social and entertainment costs, miscellaneous costs and so forth.
- After bills and groceries, whatever is left over I will use to pay extra on my debts. That brings me to the next goal.
Become Debt Free
My second goal, after creating a budget, will be to become debt free, or as close as possible. I have roughly $3,300 in credit card debt, a toy loan (for an ATV I rarely use!) of $5,500 and various small medical, personal and outstanding debts totaling $1,200. The rough total of all my debts adds up to $10,000.
To become debt free, I will:
- Pay the minimum payment on my biggest debts while paying the minimum plus anything left over from my zero-based budget on my smallest debt.
- After the smallest debt is paid off, I will pay the minimum payment from the paid-off debt, the minimum of the current debt to pay, plus anything left over from the zero-based budget on what is now the smallest debt.
- Continue on rolling all previous debts minimums, the current minimum plus anything left over.
This is sometimes called the “snowball method.” Any extra money I make will be put into this debt snowball, which leads to the next goal.
Earn Extra Income
To earn extra income, I plan on picking up odd jobs (I am a pretty handy mechanic when it suits me), selling some of my old and unused things on craigslist and other online sites, as well as trying my hand at writing. All the extra income I earn will be put into the debt snowball thereby reducing the total time required to become debt free.
My financial goals for 2013 are a fairly simple yet powerful way to improve my finances.