Dollar Jane

Although it’s already March, I did set financial goals at the beginning of 2008. My goals are:

1) Fully fund my Roth IRA. In 2007, I contributed about $3,500. My January, February, and March contributions all counted towards 2007, so beginning in April, I’ll be making my 2008 Roth contributions. I recently bumped my automatic contributions up to $500 per month, so I’m on track to finish my 2008 contributions in 10 months. This is my easiest goal and I’m not worried about reaching it.

2) Payoff all credit card debt. In 2006, I took on two big credit card debts. First, I bought a new laptop. I think it was a reasonable purchase, because it had been six years since I got my last computer (an iMac desktop), and the CD drive on the desktop broke. I did get a new drive but after a while the incompatibility of the old machine with all the new software meant the desktop had to go. The laptop cost me about $1,500, and happily, I have paid it off since (for those of you interested, I did use a 0% APR offer card to pay for it, so I wasn’t racking up interest charges). The second debt is a private student loan that did not qualify to be refinanced. It had a variable interest rate that was hitting 9% by the time I used a credit card offer to pay it off. The terms of the card are such that I should pay 5% on the debt for the life of the balance, however, with the way the market is right now, I think I’m better off making aggressive payments to completely eliminate this debt. My 2008 goal is to pay off my credit card debt by my birthday in June.

3) Build up my emergency fund and save for a down-payment for a house. This one’s going to be the hardest. Right now, all of my spare cash is going towards the credit card payments and the Roth. I think once the credit card is paid off, I’ll move those payments over to the ING Savings. At this point, I’m not differentiating the two goals–I have one savings accounts for all goals. Which brings me to my next goal…

4) Visit Italy this summer. I usually hate spending money on vacations, which is why I haven’t left the East Coast in five years. But my painter friend is going to be there for 3 months over the summer on a fellowship, and getting to visit her in her Italian villa will be a chance in a lifetime. Airfare looks like it will be about $1,400, and if I include food, shopping, and “fun” money, I’m going to budget $2,200.

So, the plan is to pay off the credit card debt, then head to Italy in late June. In July, I’ll turn my focus to building up my savings. If the Italy trip doesn’t happen, I’ll leave the savings account untouched. If it does, I’ll leave $500 in the account, and use the rest on the trip. Either way, from July to the end of the rest of the year, I intend to save about $600 per month, so, by the end of the year, I’d like to have saved $3,600.

Since the beginning of the year, I’ve been putting $500 per month in my Roth. The credit card got the minimum payment in January, and a $700 payment in February. I should be on track to pay it off by June.