Tag: Goals

July: End of Month recap

So at the beginning of the month I decided it’s time to say see-ya to our home mortgage. I gave myself the timeline of a year to completely get rid of just over $90,000 in mortgage. Whilst I still need to dedicate some time to working out exactly how to achieve that I worked out roughly where we need to be each month. Well the numbers are in and in this first month we are a mere $700 outside of where I would prefer be (after paying $300 in interest!). I’m pretty happy with that for a first attempt considering I didn’t decide on this goal until a week into July.

We did well getting $300 for scrap metal this month, I brought in $240 in surveys and $330 in catalogue delivery. So in all an additional $870 – which will help towards $10K additional for the year if we can keep this momentum up.

I also got a great deal on 4kgs of strawberries and 16 small pineapples for $20 from my local fruit shop. The strawberries have all been devoured with the pineapples being the current target. I have intentions to use them in curried sausages, pancakes and fruit salad, with the ability to chop and freeze extras for later cooking/smoothies. We also have avoided needing to pay crazy prices for tomatoes as all the self-sown ones have been ripening at a wonderful pace. I need to plant a bit more lettuce to sustain us, but we’ve also been eating broccoli leaf, garlic leaf and silverbeet reducing our grocery bill somewhat in the veggie department.

There are some big bills heading out way for August as there always is so I need to work out some extra ways to bring in extra funds – namely surveys, scrap metal and selling goods. I’ve just begun listing things for sale over the past few days (I was really slack on that one). I’m currently taking advantage of accruing more flybuys points through an offer that will get me another $30 in points for doing my usual shop over 3 consecutive weeks. That will give me $120 in flybuys for grocery shopping.

FID (frugallyinclineddad) is away for the first 2 weeks of August for work which will mean reduced expenditure for food as his work covers his meals as well. He also will receive additional pay during his working away.

In all I’m still feeling really optimistic towards our goal. Our daily interest will continue to go down ($20 this month compared to last month) which will continue to gradually give us money to put towards the mortgage.

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The Importance of Setting Goals

goals

OK, so you’ve got some debt, or you are struggling to save money, maybe for a nice outfit or to break into the housing market. I cannot stress enough the importance of setting goals whatever your financial situation. Goals give you drive and motivation to do, or abstain  from certain habits.

For example as I’ve previously mentioned, we had a somewhat insane sounding goal of paying off the remaining $88,000 of a mortgage in one year, a goal that was completed 5 months early! Yes this had extraordinary circumstances as there was a rather large bonus we were banking our goal on, but having the goal helped massively. I know this because after that mortgage was paid off the amazing payments didn’t automatically cross onto the remaining mortgage. I didn’t instantly set a SMART goal for the remaining mortgage during our celebratory stage and the initial few months following paying off the first mortgage reflect that.

Once I set a SMART goal for our remaining mortgage suddenly I could see results as the mortgage began decreasing rapidly. So what is a SMART goal? “Paying down the mortgage” is not a SMART goal unfortunately. “Getting the mortgage down to $100K by June 30 2017” is a SMART goal. Let me explain. SMART is an acronym that goes as follows

Specific
Measurable
Attainable
Relevant
Timed

Looking at my latest goal it fits into each of those 5 categories. It’s a specific goal rather than the vague goal of paying off the mortgage. It’s a measurable goal by using money as the measurable unit. Its attainable, but not too easy, something that I still have to work at to achieve. It’s relevant because paying the mortgage down will release some financial stress, basically the “why” factor of the goal. And finally its timed to have an end date.

In order for a goal to remain a SMART goal you cannot simply create a goal and then walk away from it and expect a brilliant result. Part of it being measurable requires actually measuring it. The frequency of measurement is up to you but for the time being I measure our goal twice monthly. Once on the first of the month, another on the 15th of the month. Others may choose to measure weekly, or even monthly. I suggest monthly as a minimum frequency to look at your finances as a goal can get off track a lot in more than a month.

To me an ideal SMART goal is an A4 (or larger) piece of paper and consists of the following.

  •  The goal statement
  • A measurable chart (almost always a line graph)
  • A list of things I intend to do to reach the goal.
  • Optional: a specified reward once the goal is reached.

Spend a bit of time looking at your income, allow a portion to be set aside for living costs and bills and then from that get a rough idea of what your attainable goal might be and what needs to be done to make it possible, such as reducing your grocery bills or making extra side income. Then be sure to place your goal somewhere you can see and reflect on it frequently.

Have you created your SMART finance goals yet?