2008 Financial Resolution

So this is the resolution I made over at Cash Money Life's blog back in November. He was running a contest with an IPod as the prize.

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By Brian on Nov 29, 2007

Not too surprisingly, my goals and plans ring true with many other posters.

Currently, I owe $525.00 to Wells Fargo @ 0% for a couch my wife and I bought. We love the couch, but really didn’t need to replace the old one yet. There’s 4 months left before the 0% interest goes to 28.90 %.

I am currently overdrawn on my chequing account to the tune of $950. An account with a major Canadian bank that charges $13.95 a month in fees plus interest on the overdraft.

I have 2 credit cards with a total balance of $2860.00. A line of credit with a balance of $7,900.00 and a consolidation loan with a balance of $13,500 owing.

Step 1: Stopping buying things, I want as opposed to things I need.

Step 2: Analyze my income versus my expenses. Create a budget. After minimum payments on credit debt and living expenses I have $270 to use to pay down debt.

Step 3: Pay off the Wells Fargo debt. This will take two payments and will be retired by the end of January.

Step 4: Apply that $270 to my over draft until I have built up the chequing account to a positive balance of $1000.00 to act as my emergency fund. That should be in August of 2008.

Step 5: Sell the shares I bought as part of an employee purchase plan and put the money towards our emergency fund. This should put $800 -$900 towards the emergency fund.

Step 6: Work all the overtime I can get at work and put everything over the regular pay towards the emergency fund. Due to OT availability this might be $100 - $300 dollars extra a month. Assume $150.
Steps 5 and 6 should mean that the emergency fund will be fully funded by the end of March.

Step 7: Get down to ebaying that stuff sitting in the closet.

Step 8: When the emergency fund is fully funded, close the chequing account and move the money to the no fee President’s Choice bank account that I have set up.

Step 9: Apply the $270 plus all OT moneys towards the credit card debt. Hopefully the cc’s will be paid off by September or October.

Step 10: Start applying the $270 plus the OT $ plus the $110 minimum cc payments towards the Line of Credit. This should put me close to having the Line of Credit half paid off at the end of 2008.

In 2009, continue paying off the Line of Credit and then pay off the Consolidation Loan.

Thanks for the opportunity to make my 2008 financial resolution. I certainly hope that I win the Ipod because I won’t be buying one in 2008!

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Well, I didn't win the IPod, but I did get one as a Christmas bonus at work!

A month and a half later and somethings have changed, the Wells Fargo is payed off and we're consolidating the other debts but the general plan is on track! Next step, build up that Mini Emergency Fund.