In the past, I used to list all the things I wanted to change about my finances at the beginning of the New Year. And then become instantly frustrated as I tried to do too much, and then ended up giving up by March and accomplishing nothing.
A few years ago, in order to break that cycle, I decided to focus on one or two big money goals each year. Instead of trying to fix everything all at once, I started identifying one or two major goals, and then working to accomplish them. The result was that my finances improved appreciably — and the change was more permanent.
This Year’s Big Money Goal: Prepare for a Possible Move
In the past, I’ve done things like pay down credit card debt  (that was goal that took multiple years), boost retirement account contributions , and build my emergency fund . All of these big goals require some planning and sustained effort, and required that I break it down into doable actions.
This year, though, I’ve decided that I need to get things in order for a possible move. My husband is an adjunct professor right now, but he’s considering other job options, and plans to begin applying for full-time positions next year. But we’re not quite ready to move, and here’s why:
- We are upside down on our mortgage. Thanks to declining home values in my area, we are $3,000 underwater.
- To sell, judging from the recent home sales in our neighborhood, we’d have to discount our home by $15,000 to $20,000 from our purchase price. (We had a small down payment, and now it’s haunting us.)
- Even though we’ve gotten rid of quite a bit of stuff, there’s still quite a bit that we’d have to move with us. And we’re not excited about that prospect.
- We don’t have as much as I’d like saved up for a down payment on another home.
Luckily, my job is something I can do from anywhere. Additionally, we have enough money available that we can afford to pay for my husband to travel for interviews if needed. And, even though the stuff thing is annoying, it’s something that can be dealt with fairly easily; I can take a few minutes each week to go through rooms and donate unwanted items to the thrift store.
Chances are that we won’t buy something upon immediately moving to a new city (if we do, indeed, move), so the down payment isn’t urgent. What’s really pressing on my mind is our current mortgage. Our equity situation, and my self-employment has made it difficult to refinance the home. But the real challenge is that we need to drastically reduce the mortgage balance before we sell — especially since I’m not fond of the idea of trying to force my way through a short sale .
So, for the coming year, I will probably focus my efforts on reducing our mortgage balance. That means putting extra money toward the principal each month. In order to do that, I will likely break it down, and look for ways to divert some of our disposable income into mortgage payments. It probably means fewer trips (I’m not giving up FinCon, though), and less eating out. My husband my have to reduce the number of action figures he buys.
And I’ll probably take on an extra project or two, while my husband has already been offered an extra class during the summer. If we take it a little at a time, we will likely reach our goal of reducing our mortgage principal, and preparing our finances for a possible move in the next year or so.
What about you? What’s your big money goal for the New Year?
(Photo: F. Montino )