My Personal Finance Strategy

As part of my entire personal financial management plan, I have been looking at some of the debt and emergency reserves that I have and want to take action immediately. I have been thinking about it for some time now, but this post over at It's Your Money really got me thinking about it again. The issue however is that my dividend investments will have to take a bit of a hit to do so.

Every pay period, I put 5% of my gross income from my job in my ESPP account. My original plan with this money was to sell the company stock when it comes due, take the 15% gain I receive through participation in the plan, and simply invested it into one of my CSA accounts. Instead, I have developed a more comprehensive plan for this money that now includes the following personal financial goals:

1. To build up a $1000 emergency fund by December 31, 2005
• Action Plan (currently have $100 in Emergency Fund):
• Deposit $156 per month to ING Direct account
2. To pay off entire truck balance by August 1, 2007
• Action Plan
• Continue to make regular monthly truck payment
• When monies become available through ESPP (every 6-months), sell stock and use proceeds to pay down loan
3. To build up an $12,000 emergency fund by August 1, 2010
• Action Plan
• Continue to deposit $156 per month to ING Direct account
• When monies become available through ESPP (every 6-months), sell stock and deposit into ING Direct account

As a result, I am going to remove the ESPP values from my listing to the left as it will not be contributing to my dividend paying investments for some time. All other contributions (pension, 10% of additional income earned, etc) will still be invested. It hurts to see this drop in value but I know that the money is going to a good cause - increasing my net worth and cash flow through debt reduction and securing my family's safety through a substantial emergency fund.

To keep track of my progress, I have created a little Excel spreadsheet that will highlight my progress.