Over the past few days, I’ve been thinking about my 2009 Goals. My 2008 Goals did not go so well. Partly due to the market, partly due to some poor goal setting, and partly because my goals changed as the year progressed. That’s what happens with goal setting though, and I don’t see too much of a problem with changing direction as you acquire new information.
So this year’s goals are improved, and allow for a little flexibility.
1. Increase savings by 10%.
Last year’s goal was tied to a total net worth increase, and the market totally thwarted that goal. Because I can’t predict the market, this year’s goal is related only to my savings accounts and CDs, something that I feel I have much more control over. While the ultimate goal is to increase my net worth, I want to be sure to set a goal that I can control.
2. Fully fund Roth IRA for 2009.
It pains me to think about this, to be honest, given how much my Roth IRA has plummeted over the past year, but I’m going to dollar cost average this year and hope for the best.
3. Save at least half of this year’s “extra” paychecks plus half of any work-related bonus checks.
I will receive a third paycheck in two months this year. I budget as though I get two paychecks a month, so the third paychecks feel like a bonus. Rather than bank all of the extra paychecks, I want to save at least half (probably closer to two-thirds) and put the rest towards my longer term savings goals (a new computer, etc).
4. Place a minimum of 10% of my after-tax income directly into savings.
This goal is very contingent on my roommate staying for the entire year. If I have to cover her part of the rent, I won’t be able to put quite as much money into savings.
5. No YNAB overages for at least 6 months.
As I have discussed many times, I budget using YNAB, which means living on last month’s income. Unfortunately, I am often going over that amount in any given month and spending in to this month’s income, meaning that I have less to budget the following month. It’s a compounding problem. Spending too much last month means less to spend this month, which makes me that much more likely to go over this month and have less to spend next month. Most of this has been due to unexpected expenses that I couldn’t prevent. This year, I want to plan better, try to build up a buffer of sorts so that I don’t have to deal with these kinds of overages.
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.