I promised I would determine and publish my goals for the upcoming year by the end of the week. Giving myself a deadline motivated me to think about it. Here are my regular and stretch goals for 2007. They are SMART (specific, measurable, attainable, relevant, and time-based). I’ve tried not to include variables over which I have no control.
For example, the director of my department told us several weeks ago that no one should expect a raise this year. No matter how I perform in my day job, I am limited to what the corporation provides, and financial services companies of the type I work for are notoriously cheap. It doesn’t help to be located in a “distant suburb” rather than the city. And it doesn’t help that my department generates no profit for the company.
Without further blabbering, here are the financial goals. [click to continue…]
Before I can define my financial goals for 2007, it’s nice to review the basics. What are goals? I think Etta Mae Westbrook, a “family economics” professor, explains it well [pdf]:
* Goals state what you want to do or achieve. Goals will give your life direction. Financial goals will help you to determine where your money will go.
* Goals should be an extension of your values. If the goals are not related to your beliefs about what is important and good in life, the possibility of your achieving the goals is unlikely. If you do achieve a goal not related to the values you hold, you will probably feel unrewarded and dissatisfied.
* Goals need to be specific. The goal, I want lots of money in the bank, has little meaning. Is “lots of money” $5,000 or $50,000? When will you know you have “lots of money?” Write each goal in specific terms. Write the goal in terms you can measure.
Goals can be long-term, but they don’t have to be. The goals I want to set for myself this week are for one year from now, a short time frame. They should be in line with my longer term goals, which I’ve never really outlined here before.
Many people, especially those with business degrees, have heard this before: goals should be SMART; that is, Specific, Measurable, Attainable, Relevant, and Time-bound.
Attainability, or realism, is an important piece neglected by Westbrook’s article. I could, for example, set a goal to earn $1,000,000 in income next year, but what would be the point? It is extremely unlikely that will happen, and I’m not being a pessimist. That’s just the way it is. Montana State University has a short article about setting realistic goals.
Setting realistic goals allows success, and success breeds more success. The goals shouldn’t be so realistic that they’re easy, though. I like what Jim from Blueprint for Financial Prosperity has done: define regular goals and stretch goals. This allows you to take into consideration many unpredictable variables.
I also like the Setting Financial Goals series on the new blog, Personal Finance for Students and Fresh Grads.
I promised that I would publish my goals by the end of the week, which happens to be New Years Eve. I’m still working on them and time is running short; let’s see if I can keep the first 2007-related promise to myself.
This year for the holidays, I received gift cards for Circuit City, Amazon.com, Best Buy, JCPenney, and even Wendy’s. Besides the usual warnings with gifts cards (watch out for purchasing fees, reduction of value over time, and expiration dates), the most basic tip goes often overlooked:
Don’t forget to use them.
I’ve heard that many retail stores are offering discounts and sales right now, so it might be a good time to make the most of the money on the gift cards. Companies are encourage gift card use right now as well, so they can record the sales before the year ends.
I don’t buy stuff often, so until gift buying season, I had an Amazon.com gift certificate that had gone unused for about a year. Part of the problem is my lack of organization, but I used the gift certificate to help pay for some of the gifts I purchased.
The challenge now will be to use the gift cards, and when I do, use them in such a way I’ll be making the most out of the money. My girlfriend, A., has already used some of her gift certificates to buy deeply discounted items.
Have you used your holiday gift cards yet?
In 2007, I plan on creating an official business entity (LLC) to handle any income not coming to me from my day-job employer. As I do more work online, I’m dealing with more expenses, so I’m going to look into getting a business credit card. Having a card with no annual fee is important to me, while interest rate is not. My business expenses should remain well below income, but as a Type B credit card user, I make the most of the grace period. So here are my best options:
Discover Business Card
APR: 12.99%
Introductory APR: 0% for 12 months
Annual Fee: $0
This card offers 5% cash back on office supplies, 2% back on gas, and 1% back on everything else. This is probably my first choice card.
American Express Blue Cash for Business
APR: 11.24%
Introductory APR: 0% for 6 months
Annual Fee: $0
This American Express card also offers up to 5% cash back. Purchases in AmEx’s “Open Savings” plan qualify for 5% cash back, but all other purchases receive 2.5% cash back. They do lower the cash back rate once you’ve charged over $15,000 during the year, but this is still significant. This card is a good second choice, but I don’t know if I’d be making purchases in the “Open Savings” program.
American Express Platinum Business FreedomPass
APR: 14.24%
Introductory APR: 0% for 12 months
Annual Fee: $0
This card isn’t for me, but for small businesses that require a lot of travel, this might be a good choice. For every dollar charged to the card for purchases, the holder gains 1 point, which never expire. The rewards are good for use on any flight (regardless of airline), hotels, car rentals, and cruises. They’ll start you off with 5,000 bonus points after your first purchase.
American Express SimplyCash Business Card
APR: 8.25%
Introductory APR: 0% for 12 months on purchases
Annual Fee: $0
American Express seems to lead the market in cash back business cards. This one offers 5% cash back on gas, office supplies, and wireless services, as well as 1% cash back on everything else. There is no need to make purchases through any network of retailers in order to qualify for the highest cash back amount, so this might be a great choice for small businesses. What’s convenient is the cash back is automatically credited to the account; there’s no need to request a check.
Here’s one more card to round out the collection.
Chase Business Rebate Visa Card
APR: 14.24%
Introductory APR: 0% for 12 months on purchases and balance transfers
Annual Fee: $0
If you entertain clients, which I do not, this may be a good choice for your small business. Here you get 3% cash back on purchases at restaurants, gas stations, office supply stores, building supply stores, and hardware and home improvement stores. Everywhere else, the card offers 1% cash back.
In some cases, the best solution may be a combination of cards. For example, I might use the Chase card when paying for dining out and filling up the tank, the Discover Card for office supplies, and either for everyday purchases.
I plan to use my time this week to review my financial progress in 2006 and set some concrete goals for 2007. I’ve never been a fan of concrete goals because so far, unexpected surprises have had effects on my progress every year for my adult life, sometimes positive, but sometimes negative. This unpredictability has discouraged me from setting specific short-term goals, for fear of coming up short or rendering the goals irrelevant.
By the end of the week, I will have some specific goals that I will hope to attain one year from now. I’ll also use them as a measuring stick throughout 2007.
Feel free to share your own goals for 2007 in the comments, or if you’re a blogger and have published an article about your 2007 goals, feel free to add a comment with a link. I’ll add links to the main part of the post as I find them.
* Investor Trip: Investment Goals for 2007
* Wealth Junkie: My Goals For 2007 – What are yours?
* No BS Finance: 2007 Financial Goals
* Moomin Valley: 2007 Net Worth Goal
* The Financial Oracle: Goals for 2007
* Million Dollar Journey: Goals for the New Year (2007)
* General Finance: My 2007 Financial Goals
* Blueprint for Financial Prosperity: Regular and Stretch Goals for 2007
* Alpha Guy: 2007 Goals
* Save Money: Some Stuff to Look at for 2007
* Erasing My Debt: My 2007 Goals
* Many more links are listed in the comments, so take a look!
Leave some comments with your goals or with a link to a post containing the details. I’ll publish my goals by the end of the week.
Got Tips for Consumerism Commentary?
by Flexo on December 31, 2006
in Administration
I have some exciting things planned for 2007, but I’m always looking for fresh things to write about. I’ve set up a new email address to take suggestions from readers. If you have something you’d like to share, or if you have a question you’d like to see answered — keep in mind I’m not a financial professional — send an email to tips at this domain name, consumerismcommentary.com.
Feel free to suggest topics or anything else relating to the website.
By the way, I do promise to finish up the series on my experiences with the University of Phoenix Online. I’m in the process of going through the papers I have written to recreate what I’ve learned. I apologize to everyone who is still waiting for the series to wrap up.
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