Blogging Through My Debt: Benchmarks and Goals

It occurred to me recently that, while I've said a bunch of times that "I want to be out of credit card debt," I've never really sat down and outlined the specific financial goals I have for myself.  Honestly, I'm not sure I've ever actually thought it through.  This journey has been a very general one for me; all I've been concentrating on is each months payment and the end result of being debt free, but I don't know that I've thought about the benchmarks along the way or what I hope to do once I am debt free.

This is that post, and here are my goals (the ones that are crossed out have been completed):

1. Establish a $1,000 emergency fund
2. Pay off my Victoria's Secret credit card
3. Pay off my Visa Platinum credit card
4. Buy an iPod - REWARD!
5. Pay off my Visa Miles credit card
6. Buy an iPhone - REWARD!
7. Establish a $1,000 miscellaneous savings fund
8. Increase emergency fund to cover 3 months of expenses
9. Begin setting money aside each month for retirement and/or buying a home
10. Increase miscellaneous savings fund to $5,000
11. Buy a Mac laptop or a used car (depending on my lifestyle at the time) - REWARD!
12. Begin paying down student loans

A note on the rewards: I'm a big believer in finding the right motivation for yourself.  Deprivation, whether it be in finances or dieting, rarely works with me so I've had to find things that do.  My iPod finally died on me last week (it was a long time coming), and I've been going back and forth between holding out and using Nate's iPod until I can afford a new one or just giving in and heading to the Apple store with my credit card.  Then I wrote this post and decided that a new iPod would be a reward for myself when I finish paying off my current credit card.  Up until this point, this card has been like a bad habit: it's been impossible to get rid of.  But now, knowing that I'll be able to start saving for my reward right after I've paid it off, my motivation has increased tenfold.  Same goes for the iPhone.  (Though, how do you all feel about using the iPhone as your iPod?  Good idea, bad idea?  This will affect my reward benchmarks.)

Also, you'll notice that I didn't add a time frame on these benchmarks because, with quitting my job and going back to school being in my plan sometime during the next year or two, my income level will definitely be changing.  I obviously hope that I'll be able to find a job during school, but I can't be sure at this time, nor would it most likely be a full time job anyway.  Overall though, I think this is a plan for the next 3-5 years, not considering things like [perhaps] saving for a wedding, etc.

The time variables have actually been something I've been struggling with lately.  It's hard to make a financial plan when you're not even sure of your plan in general.  For example, I think I know how long it'll take me to finish paying off my Visa Miles card, but that's only if I can consistently make the payments I've set out to make, and if I'm back in school next Fall (versus the following Fall), that plan completely changes.

I think the lesson learned so far has been to be flexible.  Not to be lenient, but to understand that circumstances change.  You just have to remain diligent about bringing your debt down, even if you have to rethink how and in what time you go about doing so.