I've been thinking seriously about these--apologies for the delay. But without further ado, here are my 2008 financial goals.
Earn the full match in my 401(k)
I'm going to be switching over to the Roth 401(k), and my company's match has been bumped up to $2,000 (dollar-for-dollar!), so this will be a more challenging goal than it was this year.
Save $4,000 in the Freedom Fund, for an end balance of $10,000
This figure will just about cover six months' worth of frugal living, so it's a nice stash to have in case of life change or emergency. This means regular monthly contributions of about $250, plus saving the slack in my extra paychecks. Quite doable. If it's looking too doable as the year progresses, I may revise this goal upwards a touch, but since I may have to adjust my 401(k) contributions up, this one may be harder than it looks.
Give $1,200 to good causes
Yes, indeed, this is less than I gave this year. But a hundred bucks a month is a nice round number, and I really don't think it's ideal for me to be resenting my giving plan (and I did feel that way a couple of times this year), so I'm going to take this one in baby steps. The figure is still a chunk of money for someone of my age and income. I also need to devote some thought to creating a giving plan that makes my donations meaningful--I felt a little haphazard this year.
Earn $1,500 of non-salary income, earmarked for graduate school application expenses
This is going to be a big challenge, especially since I'm going to give up the freelance work I do through my employer. But I'm going to try to earn some money through the blog (you'll note I'm continuing to run the Prosper referral ad), and I'm going to talk to a local coffee shop about maybe doing some contract baking. And all those tiny Pinecone Research checks count, too! I'll get a goal meter up on my sidebar for this one.
Buy a friend a drink at least once a month
And not in the "I'll get this round, you get the next round" way, either. This seems like a strange goal, I know. But I want to be careful that I don't get tight-fisted, and I want to prioritize my friendships. I'm not going to be too picky about what it is I'm buying--coffee or a snack counts just as much as a beer, as long as it's bought during social time together and not reimbursed.
Achieve a $35,000 net worth
This one seems the likely result of achieving all of the above goals. I'll revisit it at the six-month mark.
You'll note that there's no goal pertaining to the Travel Fund. That's because it's not a priority right now. I'll keep up my $50/month automatic transfers, but I'm not going to be pushing this one this year, partially because it's not as urgent if I'm not taking my trip until summer of '09 and partially just because I'm going to have other things on my mind.
So onwards and upwards. May we all enjoy success in 2008.
Friday, January 04, 2008
Financial Goals for 2008
Tuesday, January 01, 2008
My 2007 Financial Progress: The Numbers
I had five financial goals for 2007. I also, somewhere along the line, developed an unofficial goal of reaching a savings goal of $5,500 in my Freedom Fund. For whatever reason, that goal was the most important to me. It represents progress towards being able to do what I want to do with my life.
And as of this very morning, that goal is met. My Freedom Fund account at ING reads $5,500, which actually represents cash savings from this year of somewhat less than $4,500 (the balance also includes a CD that matured). And I've transfered my beloved-and-generous aunt's $500 Christmas check in, so it'll stand at $6,000 for the year. And as to the rest of them?
1. Give 5% of my income.
My gross salary income for the year was $31,615.37. I gave $1,371.45 to good causes this year. That's 4.3%--short of the goal. Not by much, but still short. I copped out of giving for a couple paychecks (or maybe three?) this summer when money was tight. Had I given that money, I would still actually have been a little short (4.9%), so this goal will need a little rejiggering for next year.
2. Open a Roth and automate contributions.
Sort of. I actually funded my Roth in a lump sum, with the money my parents gave me. But the end is accomplished—the money my parents gave me maxed the thing out.
3. Earn the full employer match in my 401(k).
Big fat check, and I'm proud of this one.
4. Open and automate contributions to a travel fund towards a savings goal of $2,000.
No. But this one was by choice—I just wanted to prioritize the Freedom Fund as that goal grew in size and priority.
5. Triple my net worth.
Stupidly (as Moom pointed out at the time), I didn't count my checking account in my net worth when I set this goal. When I started this blog, though, I listed out every penny I had, an though it had clearly come up somewhat in the next two months, even if it had been $7,000, it would be well and truly tripled. And I bet it wasn't even that high—I bet it's more like quadrupled. My net worth as of today is $21,247, which is a modest increase from last month of 2.27% and well clear of my unofficial goal of $20,000.
So I think I made some pretty good progress. And this is just the numbers.
Thursday, November 01, 2007
Dammit, ING
After the Fed's .25% rate cut, ING quietly dropped its interest rate from 4.3% (down from 4.5% before the previous rate cut) to 4.2%. I have no way of knowing how important that sort of thing is to ING's business, but I find it really irritating. Could I rely on them to bump their interest rate up immediately if the Fed were to raise rates, do you think?
I don't have nearly the kind of real understanding of these kinds of systems that I'd like to have. It's all sort of mysterious, but I definitely know that it affects my life in real ways. Just this month, my savings earned over $20 in interest from ING, and I was hoping that for next month I'd start edging in on the $25/month interest mark (effectively, my interest would be making one Freedom Fund payment for me, which would be very cool). But it looks like it'll be a little longer until that happens.
Tuesday, October 02, 2007
Freedom Fund: $4,050
I got the big insurance reimbursement check in the mail last night, and immediately (this morning) deposited it and set up the transfer over to the Freedom Fund at ING. This brings the balance up to $4,050.
Exclusive of the CD I rolled into the Freedom Fund, this balance represents 13.1% of my gross pay for the year so far, and at least two months' expenses. It represents the freedom to make decisions for myself, unbeholden to anyone. And the best part is that it's all, every penny of it, money that I earned. Even the aforementioned CD was initially funded with savings from my part-time job at college. The Freedom Fund is truly free, in the sense of independent. There are no strings attached.
Wednesday, August 01, 2007
Barriers, Again or: The Emergency Fund, Vindicated
Well, here's a mighty embarrassing situation.
I've let a bunch of medical bills pile up without applying for reimbursement. I've had this luxury because either a) my father has paid them, on the agreement that I'd pass the reimbursement checks over to him, or b) they are addressed to my father with the idea that he will pay them. My father is on vacation, not on the continent, and hard to reach by mail, so he asked me to pay a current bill out of the reimbursement checks for previous bills.
Only there aren't any reimbursement checks for previous bills, because I haven't filed for reimbursement, because I do not know how, and things I don't know how to do wig me out. This is my great weakness in almost all aspects of my life.
So.
I went to a doctor's appointment yesterday (I'm keeping the nature of my ongoing medical issue to myself, but it's nothing urgent), and she was like, "Here's something awkward we need to discuss..." and I was like, "Word," and explained how what was supposed to happen was stalled by my incompetence.
She was awfully nice about it--explained how to file a claim to the best of her ability--but nevertheless, it would be pretty hugely unfair to be like, "hey, I'm just going to leave you waiting around for money that you earned, because I'm weird about stuff I don't know how to do." So, I got to say, "I'll write you a check."
And because I've saved diligently, I can write her a check. I'll need to transfer the money out of my E-fund, but the money's there. Not that it doesn't make me nervous to let it out of my bank account and roam free, because it does, but I guess there's no way around it. And the reimbursement should quickly replenish the stores.
Nevertheless, I'm nervous.
Monday, May 28, 2007
June Goals
Following Krystal's lead, I thought I'd lay out some specific goals for June.
Finances:
1. Add $175 to my Freedom Fund balance. This is $75 over my autodrafts, and would bring the balance of the Freedom Fund ING account to over $2,200, which would set me up to hit $2,500 by the end of August.
2. Add $50 to my Travel Fund balance, to bring it to over $1,150. This is just my autodrafts, so it's a pretty low bar.
3. Cashflow purchase of the Oxford Companion to English Literature. I'd like to find this book, a resource for the Lit GRE, on one of the discount sites for a price that I can manage to cashflow from June's pay.
4. Buy sandals and Feist's new album. Planned spending is something I need to work on—I tend to nickel and dime myself out of things I want.
Friday, May 25, 2007
Freedom Fund Adjustments
I'm bumping the goal for the Freedom Fund up to $5,000, from $4,500. This is partly because I have a round-number fetish. It's also partly because I'm not totally confident that $1,500 per month quite covers expenses.
My current balance is $1,850 in the ING Freedom Fund account, with about $1,030 coming in when my despiséd Bank of America CD matures in August—by the end of this month, it should be $1,950. To be on track to save the extra $500, the balance in the ING account needs to be about $2,335 by the end of August (not counting the CD). I don't think that will be a problem: it means saving about $130 per month during June, July, and August. I've been saving more than that anyway—I've been making at least one extra $50 payment per month lately, and I don't anticipate a problem continuing to do that. If I did that every month through August—contributed $150 a month—I'd have a balance of $2,400, not including interest. Just to set the bar a little higher, I think the goal for the end of August is $2,500.
My hope here is that I can hit the $5,000 mark by the end of the year (again, this assumes that my beloved and generous aunt continues her tradition of $500 checks to her nieces and nephew at Christmas). Then I can let the Freedom Fund percolate while I focus on other savings goals.
Tuesday, May 22, 2007
Stasis
So, the money thing is just kind of puttering along. I'm on track to meet my Freedom Fund savings goal for the end of August ($2,000) by the beginning of June, which is nice. I may or may not have an extra $25 or $50 to save at the end of this pay period, but it'll be fine either way. One thing I am noticing is that with summer's advent comes increasing difficulty with keeping myself within the bounds of my budget. There are a couple of things I need--like a pair of sandals--but mostly there are suddenly just more things I want than ever: cold drinks and summer-blockbuster movie tickets (I recommend Black Book, which is not being marketed as a summer blockbuster because it is subtitled, but is basically a big, thrilling war melodrama) and lots and lots of fresh berries and iced coffees and restaurant dinners at the tables set up on the sidewalks and all sorts of things. The problem with a lot of these things is that they are that most insidious of money drains, the Little Things That Add Up, so I am going to have to remain vigilant.
The real-life thing is in a bit of flux. If I'm applying to grad school this time around for real, I probably want to stick it out in my current job until then, just so as not to add the stress of a job change. Problem is, though, that while I work here I rely on my current income (plus the freelance gig) to get me through the grad school application process, which is an expensive one. I may have to ask my parents to help out with that a bit, much as I hate that prospect.
In a way, this is a nice place to be. I feel like I don't have to work too hard at money right now--I still have to put in the effort at not spending too much of it and saving enough of it, but mostly, it's sort of on autopilot: 401(k) contributions and savings autodrafts and accounting systems are all humming along nicely, which leaves me free energy to deal with the more important questions in my actual, as opposed to financial, life.
Thursday, May 10, 2007
What I Want to Be When I Grow Up
All this talk of job satisfaction around the blogosphere makes me think about what I want to be when I grow up.
Some days I really want to be a stay-at-home mom, with a gift box and a deep freezer and a crockpot. On these days I want to make lunches in brown bags and stock from scratch. I want to shop yard sales and drive carpools and swap recipes with the other moms.
Other days I want to be an MBA, sleek and besuited and bountifully compensated. I want to buy an apartment and a beautiful dining room table for that apartment. I want to invest like a busy investing bee and have millions of dollars. And then I want to quit and write a novel or something.
Yesterday I looked at jobs on Idealist.org. There's a position open at one of the organizations I tutor with, and I thought about applying for it. The organization is badly run at present, which is both a concern and a challenge. I thought about how the problems I solve at my current job mostly involve bureaucracy and overnight shipping and formatting things and how the problems in that job would involve far more interesting things, like making a volunteer program work well. I thought about being able to walk to work in the morning, and never having to take the rush-hour train. I thought, too, about the fact that I'd be able to negotiate a new starting salary, one which even from a non-profit would almost undoubtedly be higher than my current salary. I thought about my vague plans to go to grad school, and what that timeframe might be like, and how much of a chance it would give me to try the new job (for which I think I'm a strong candidate, actually).
I don't like my job that much. I just...don't. It's not challenging and it's not interesting. I have one project that I'm invested in, and that's it. But I've built so many plans on top of the platform of this job that it's difficult to seriously contemplate leaving before those plans are completed--before I've saved the amount of money I want to save this year, for example. And I hate, hate, hate the thought of using up the emergency fund I've worked so hard to build.
But the other name for my emergency fund is the Freedom Fund, and the whole idea is to let me do things that are good for me even if they cost money.
So I think I am on borrowed time at this job. Ideally, some new and fascinating job will pop up around September, when I'll reach the one-year-served mark and can respectably quit. But should I be worried about when I can respecably quit? Shouldn't I be more worried about the way I feel of a Thursday afternoon (to wit, drained, bored, and frustrated)?
Tuesday, April 24, 2007
Savings Projections
By my calculations, I should have 3 months' worth of expenses (which I estimate at $1500/month) in my ING Freedom Fund by the end of this calendar year.
The current balance is $1,300.
I also have a CD at Bank of America, which will be rolled into the Freedom Fund when it matures at the end of August. By then, it will be worth about $1,030. (Running total: $2,330)
I have two "extra paycheck" months still to come. Each will allow me to save $300 above what I usually do, for a total of $600. (Running total: $2,930)
I have 18 paychecks left this year. If I save $50 from each of them in the Freedom Fund, that adds $900. (Running total: $3,830)
Hopefully, my beloved and generous aunt continues the tradition of $500 gifts to her nieces and nephew at Christmas. (Running total: $4,330)
I can definitely find $170 over the course of the year above and beyond my normal savings. I'm pretty sure I can't come up with $670, so if my aunt's gift changes this year, I may fall just short of the mark, but I should be able to make it to $4,000.
That's pretty serious savings, actually. $3,000 (the amount I'd be saving out of this year's earned income) is about 9.7% of my projected pre-tax W-2 income for this year. Disregarding my Roth (which, in this scenario we should, since it's mostly money I didn't earn and it's all money I didn't earn this year), consider that I also save 8% of my (pre-tax) salary in my 401(k). A 17.7% savings rate? I'm no slouch.
My newfound enthusiasm for the Freedom Fund leaves me neglecting my travel fund, though. Its current allotment of $25 per pay period will bring it to $1,500 at the end of the year, substantially short of the $2,000 goal. I'll either have to resign myself to prioritizing the Freedom Fund to the detriment of the travel fund, or find some way to step it up a little.
Tuesday, March 27, 2007
The Emergency Fund, Reconsidered
So, after receiving my most recent paycheck, I transfered $60 above and beyond my normal savings allocation into the ING account that holds the Mini-E, my little emergency fund, to bring the total balance to $1,000. Saving this $1,000 was not a goal I initially had for this year, but recently, it's become pretty important to me--I think I'm reevaluating my thinking on the emergency fund (I see that Wanda's been doing some thinking on the same topic, which is part of what led me to verbalize that reevaluation).
See, it's the emergency part that seems unlikely to me. I have health insurance. I'm employable. I'm totally lacking any financial dependents (including cars). The likelihood that there would be an actual emergency that would exceed my current financial preparation is pretty small--I talked about that in the earlier post on this subject.
Two things, though, present good arguments for fleshing out my emergency fund anyway:
1) I really, really don't want to increase my reliance on my parents, even temporarily. I like having my own life.
2) While I am unlikely to experience a financially demanding emergency, I am extremely likely to experience a financially demanding life change.
Number two is the important one here. I don't really know what I'm doing with my life. I regularly think about leaving New York in favor of the small city in which I went to college. Grad school, of course, is a big (and expensive) likelihood. The point is, though, that I want to have the freedom to pick up and go wherever it is I decide to go, or do whatever it is that I decide to do, or both. I don't want to have to ask my parents' permission. I don't really want to have to ask anyone's permission.
So I think I may be amping up my goals for this savings pot (more dicussion to follow on that, probably), but changing its stated purpose: it's not so much the Emergency Fund as the Freedom Fund.
