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Happy New Year!
With 2016 in the rearview mirror, it is time to start planning for a new year!
While most people are making resolutions about going to the gym more often and eating healthier, I am setting goals to focus on my finances.
After a successful year of increasing my net worth, I have decided to focus this year on paying off debt. I know that I can make changes to my spending habits in order to free up some additional cash to put down on my loans.
Related: My 2016 Net Worth Report
My 2017 Goals:
My first goal is to build a small emergency fund, which according to Dave Ramsey, should be $1,000. Typically an emergency fund is held in an account that is separate from your regular chequing accounts. By having this money separate from your spending money, you will be less likely to dive into it for everyday purchases.
Related: The Rules of Zero-Sum Budgeting
An emergency fund is an important step on your financial freedom journey. Life can be unpredictable! An emergency fund is your safety net to ensure you don’t blow your budget the next time your car breaks down or your pipes spring a leak.
Goal: $1,000 emergency fund
Currently, I have $350 set aside as a mini emergency fund. In order to increase this fund to $1,000, I will need to save $133 per month.
My second goal is to generate income from my blog. At this point, I am only setting a goal that will cover my costs of operating this blog. In the future, I am hoping this blog will generate enough income to help me pay off my debts; however, I don’t see a reason to focus on this right now.
Goal: $100 in blog income
Currently, I have not earned any money from my blog.
Now for the loftiest of my goals. I would like to pay off my line of credit.
Why is this a lofty goal?
This past year I was paying $250 per month towards this debt. In order to reach my target, I will need to DOUBLE (yes, double) my debt repayment. I have no idea where this money will come from but I plan to stick to this goal as much as possible.
Goal: $0 on my line of credit
My current balance is $(6,571). In order to reduce my amount owing to $0, I will need to pay $550 per month towards my line of credit.
What are your goals for 2017?