Financial Goal Planning

Those are three words I never thought I’d put together in one sentence. However, on our ride to Green Bay last weekend (the 4 hours it was), Bill and I get to talk.  The kids watched a My Little Pony Movie.

A couple of weeks ago, our bank that holds our mortgage called us.  I know — freak time!  However, it was for something good.  They want us to refinance our first mortgage.  Yes, we are up to date on our payments which is why I guess we got picked for this program.  No appraisal, no closing costs, and they would drop our mortgage 1 percentage point.  It sounded like a no brainer for us, so we did it.  Oh yeah, it saves us money on our monthly mortgage payment too.  So how does this go into financial goal planning?

Well, when we took out our mortgage, we also took out a second mortgage (used some of that $ to fix our basement) and did it to get rid of PMI (which at the time was NOT tax deductible).  That second mortgage has a high interest rate and an interest only payment.  When we took out that loan, I figured out a monthly payment that would have us pay that off at the same time we were suppose to pay off the mortgage.  Well, at least I thought I did.  Idiot here (that would be me), somehow messed that up pretty good.  Instead of paying it off when the mortgage should have been paid off, ummmm, — if I keep making the payment I am now — we will pay that thing off in 6 years.  Whoops!  Granted it is a whoops in our favor.

This is where goal planning takes place — what do we do with the money we will save each month?  Well, we are putting it the second mortgage of course!  Our goal is to get as debt free as we can.   I’d love to not use the money I make to pay Madison’s school tuition.  I’d love to start a retirement fund for me.  I’d love to start college funds for the kids.  However, we’ve been planning all along.  Before we make big purchases like my husbands big screen tv or living room furniture or even dining room furniture, we set aside the money.  If you can believe it, we hide money from ourselves.  I go with the out of sight, out of mind theory.  If the store has financing (like Best Buy with the tv), we take it and make interest on the money (I love 3 years no interest!).  We use a credit card that takes 1% of whatever we charge and applies it to the principal of our mortgage.

Now, I had the bank figure out how long it’ll take if we take that extra cash and put it on the second mortgage.  They said about a year and half to pay that off!  Needless to say, we are excited.

Now, last week, we got the statement for the van.  The van we bought in 2006 for 0% interest.  (Like I said, though we spend a lot, we try to be smart about it). We have six months left of payments and that baby is paid off.  We’ll then take that extra money and hopefully through that on the second mortgage too!  So as long as nothing else goes wrong in our lives (and we all know it will), we are looking at maybe paying off the second mortgage in a year or year and half!  At that point, we’ll probably start working on paying off Bill’s Prius and a Menard’s bill if I don’t have it paid off by then!

(Note:  As I wrote this, Daisy started pooping blood and had to take her to the vet.  She’s just got a parasite, but it goes to show you how the best laid plans can go to crap — pun intended — in a heartbeat).

With all this being said, it is a great feeling seeing the light at the end of the tunnel.  If we can really buckle down, we can maybe do this even quicker!  (However, Christmas is coming up and that will mess up the money savings).  What financial goals do you have for your family?


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