Blog Master G

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Savings Goals

Thursday, March 23rd, 2006 · 1 Comment

Sparked by my Tuesday post, Jane wrote a post about mortgages and financial goals, to which I added the below:

Although Jen and I are good about saving/investing every month, we’re also guilty of having slipped back into debt with this great little invention called the HELOC — it even comes with its own checkbook!

Psychologically (and credit-wise), we’d rather carry a balance on a HELOC than on a credit card… plus, the interest is tax-deductible. But it’s still debt, and we want to pay it off.

It takes a lot of discipline to stay debt-free, and our consumer-driven society makes it all too easy to charge, charge, charge away! In fact, the system is actually designed to work in your favor for borrowing vs. cashing out assets (the perfect example is that we can write off the interest on our HELOC but get slammed on paying interest on gains should we sell any stocks/funds). Also, when was the last time you actually SOLD something (on eBay, a garage sale, etc.) vs. buying non-essential goods or services?

Of course, debt is, to some degree, inevitable, if you want to enjoy life while you’re young. For example, we’d rather finance international travel now while we’re still (relatively) young and kid-free, and worry about paying it back later.

I think your goals are good ones, Jane, and you’re probably in an elite club if your primary financial goals are not related to debt reduction.

I’d say our goals would be these (and I hope Jen agrees):

1) Enjoy life without stressing too much about finances (but making good decisions).
2) Pay off HELOC.
3) Save more in ING safety net (so HELOC isn’t safety net).
4) Increase monthly investment/ESPP contributions.
5) Continue to live mostly under our means and (try to) stop slipping back into debt.

# posted by Gabe : 10:40 AM

This time of year (tax time?) seems like the time when everyone is reflecting on financial goals. It was a year ago yesterday when I last wrote a blog entry of the same title, Savings Goals (and I posted the above comment to Jane’s blog yesterday… how ’bout that?).

Tags: money

1 response so far ↓

  • 1 claire // Apr 8, 2006 at 4:39 pm

    The catch with HELOC’s if I recall is that they are secured debt loans, so if you got too far in debt, the bank could take your house whereas credit cards are unsecured debt so the bank can’t take anything from you.

    Suze Orman has a great book called “The Money Book for the Young, Fabulous, and Broke” that has lots of useful info on finances, ways to lower interest on credit cards and the like…