Thinking about 2008

Now that 2007 is quickly coming to an end, I’ve started thinking about my financial goals for 2008. I’m trying to set goals that are attainable, but not goals that are a given.

One clear goal is that I want to again fully fund my Roth IRA. I don’t plan to actually fund it until the end of the year, however, as I’m not sure where my income level is going to be, and I don’t want to deal with excess contributions. I do, however, plan to set aside the full $5000 and then put whatever I can into my Roth at the end of the year. Along with that, I plan to very carefully track my taxable income month to month so I will know where things stand.

I discovered that during three months next year, I will be receiving three paychecks a month. This is not an uncommon phenomenon – if you’re paid bi-weekly, you will likely see something similar. I budget as if I only get two paychecks a month, of course, so the plan is to put those three extra paychecks directly into my long-term savings account. This is the account that I automatically put money into every month. I don’t necessarily have a purpose for this account – it’s just money that I don’t touch. I might use it for a large purchase, perhaps towards a down payment, or maybe for a vacation, or just about anything. It’s just another “pay yourself first” account.

I want to increase my monthly contribution to that account by $50 as well, possibly $100. I will have to crunch the numbers on this first.

I plan to continue to contribute to the match to my retirement account through my employer. That’s an easy one. I will finally be eligible for the match sometime this spring, and it will be nice to see those contributions hitting the account.

I expect to get two raises this year – a cost of living increase at the beginning of the year and then a promotion of sorts at my anniversary with my employer. The goal is to try to continue where I am with expenses and just bank the salary increase. The COLA increase will likely only be an additional $100 take-home, if that, what with changes in my health plan and such. So it shouldn’t be tough to just bank that. Every dollar helps!

I’m also considering setting a goal of increasing my net worth by a set percent. Right now, the number I’m toying with is 25%. That seems scary, but I think it’s doable.

I will finalize this list in the coming weeks. What are your 2008 financial goals?

Megan Smith

Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.