Reflecting on my financial wins and losses in 2008

As we head into the last month of 2008, I am spending more time thinking about my financial intentions for the year to come. This past year, I experienced some ups and downs with regards to my financial situation. Midway through the year, I started a new job with a hefty pay increase yet when I take a look at where I stand financially today, I find myself in a tighter situation then a year ago. What happened?

For one, I experienced that bug that most get when they experience an increase in pay-an increase in lifestyle. I honestly could say that I I felt like I had the complete right to spend every additional cent that came in simply because I had it. When I reviewed my Emigrant account a few weeks back, I was amazed at how the balance had not moved. But how would it have moved, I wasn't putting any money into it.

So now as we endure through this uncertain economy, I have come to a solemn realization about my financial situation. I now realize that even though I earn what some would consider a decent salary, I have been living the typical paycheck-to-paycheck diet of the typical American.

The good news is that knowing is half the battle. Now that I find myself in a position of having the knowledge, I have no choice but to take action. I also know that action without forethought is of little value so I begin with identifying my goals and the possible barriers to my goals. One goal that I seem to be always chasing is to amass a full six months of living expenses. Because I receive the majority of my income in the form of a paycheck, I know how important this emergency fund will be in the event that I find myself without a stable income.

Diminishing my debt is another goal of mine. This month I've been able to pay off a $950.00 credit card balance with a 0% interest rate. The no interest rate offer was set to expire in a few weeks and, rather than transferring to another card, I opted to get rid of the debt once and for all. Debt is not a good thing to have in times like these. The more of your income you can hold on to, the better. With that large chunk of debt paid off, I'm left with even larger chunks of debt in the form of my student loan and two mortgages. I'm not letting the size of these obligations get to me. I still intend to remove them from my life like the debt that came before them.

Removing debt and saving is not an easy feat. One has to operate with a razor like focus with both objectives. It can be done. Achieving this goal is much easier if you have an ample amount of discretionary income. If you are convinced that you have not extra money. Think again. Gas prices are such now that you practically are experiencing abundance every time you fill up. Even if you decide to wait an extra day to fill up, you will save money.

So there is the overview of what my two main objectives are financially for 2009. I'll elaborate more on which methods I'll use to accomplish these goals in my upcoming post.