Financial Goals for 2011

With the New Year right around the corner, I thought I would compile a list of what I would like to achieve financially.

1. Be rid of all credit card debt.
2. Earn $5000 in extra cash from side jobs.
3. Have $10,000 in non-retirement accounts.
4. Have $80,000 in retirement accounts.
5. Get total loans/debt below $200,000.

This will require some work on my part. We have to reign in our extra spending and work on creating some side income. I have some thoughts on the latter that I will share in the future.

New Goal for Paying off Auto Loan and Others

Back in April, I laid out our goals for paying off our debt. In there, I figured that after paying off the credit card debt, we could put all our resources towards the auto loan. The earliest I figured we could pay that off was August of 2014. Well, now that we have paid off the CC debt earlier, I believe that we can tackle the auto debt earlier. If all goes to plan, we will have it paid off by December of 2012. That would be welcome news, as we would then begin to tackle the 2nd mortgage.

By then, the mortgage will have about $56000 remaining. I would give us 3 years of accelerated payments to finish off that loan. That would be December of 2015. All that would remain now would be the 1st mortgage with $115000 remaining in principal. By throwing all that extra dollars($1350) into the principal every month, I see us paying off this debt within 3 more years. This means by December of 2018, the house will be all ours. This is one lofty goal, but if we can get back to two incomes next year, it will be totally doable. Also, I plan on working in some extra hobby income as well.

Mid December 2010 Update

It has been some time since my last update. I have been super busy and not had much free time to think about a post. Lots of stuff happening between work and home. We have made a big decision to use some of our retirement savings to level our debt. I know that this is number 1 on the list of things not to do financially, but with our situation (one income, mounting debt payments, chronically sick child), we felt this absolutely necessary.

Doing this is actually saving us money now, since we don't have a that 6% finance charge every month anymore. It is one less expense that we don't have to account for. Also, we are not having to set aside $380+ towards debt payment. It eases our monthly overage quite a bit, almost putting us in the black when we get some extra income in.

So with that said, here is our latest new worth statement.

So we see that our retirement accounts have taken a hit, but we have the up-tick in savings. Half of those savings will go towards finishing off the remaining credit card debt as well as another outstanding one. From here, we will see where our tax return and next years bonus put us. I would like to eliminate the auto loan next. Also, we hope to bring in some extra income with some ideas that I will go into later.

Rising Prescription Costs are Hurting Us

Our little one, requires a high dosage of vitamins that are compounded so that she can take them orally. She has feeding issues (not able to chew well) so we give them by oral syringe. There are 8 separate vitamins that are put into 5 compounds of varying tastes. These are to make up for her genetic/metabolic vitamin deficiency. She has been on the cocktail for a year and has shown improvement.

The problem is that the cost of the vitamins and compounding has gone up drastically in the past 6 months. At the end of last year, it was $10 per prescription, with 3 being twice a month. At the time, there we a total of 9 refills per month. That comes to a total of $90/ month. Then in January of this year the co-pays went to $30 so the grand total went to $270/ month. We worked hard with the pharmacist and neurologist to cut the total prescriptions down to 5 a month and the total was $150/ month.

Well, this month our health provider decided to upped the co-pays to $50 a month. That makes the total $250.00. I think they are trying to make our live miserable. We are currently working with the pharmacist and neurologist again to try and bring the cost down. Otherwise we are gonna go on the canned beans diet.

Dividend Play: Altria

On Friday, I decided to add to my position in Altria. I could not resist the 7% dividend this stock now offers. I was actually looking to add Chevron or Exxon Mobil, but settled back on Altria. The stock is down 10% since April, and I believe this to be unwarranted.

So, now I am done with my initial dividend portfolio. This portfolio currently makes up only 5% over my overall investment portfolio. The other are in mutual funds. The dividend portfolio includes Fifth Street Corporation (FSC), McDonald's (MCD) and Altria (MO). The later to are setup in DRIPs, so I look forward to seeing the shares grow over time. Also, when finances offer, I will add to these positions.

I am actually contemplating increasing this portfolio's value in my overall investment approach. I would like to to be at least 50%, so that it will produce a generous income when the time comes to live off our investments.

Net Worth Update: Ugly May

Here is my first net worth update. It just happens to be on the end of a bad month for the stock market.

The auto category comprises 2 cars, one which is paid out right. We plan to keep both fo many, many years.

As you can see, I paid off quite a bit this month on the credit cards. I am not sure how much I a can keep that up.

The taxable accounts comprise emergency funds and some misc savings.

Dividend Play: McDonald's

Yesterday, I started a position of McDonald's stock in my Roth IRA. It is only 15 shares at the moment, but I plan to use the dividend reinvestment plan there and let the shares grow over time. The company has been raising it's dividend each year at a pretty good rate and I don't see it stopping that anytime soon.

I am studying up on some other stocks to add, as I have left some dollars in my Roth account to make one more purchase. The sectors I am looking at are utilities, energy, consumer goods and some others.