For 2019, I made sure that I had SMART goals:
I wrote about it last year, and you can read more details at the link. This year, I set three SMART financial goals.
Goal 1 – Pay off my car loan
My first goal for 2019 was to pay off my car loan. I still had a few years left on it, but I just didn’t like having the debt hanging over me. The interest rate wasn’t bad, but I had bigger things I wanted to do with that money, so from the day I got the loan, I had been paying more than the minimum in order to pay it off. To pay it off in 2019, I knew that I needed to increase my payments and also apply any bonus money received towards the loan.
I met this goal in the first half of the year, earlier than anticipated. I found that after years of being very against acquiring debt, having a car loan was more stressful than I realized it would be. While I’m not bothered by my mortgage, seeing that car loan come due every month always felt painful, so it was worth it to me to get it paid off.
Goal 2 – Get to Rule 4
My second goal had to do with the You Need a Budget (YNAB) rules. Rule 4 is that you live completely on last month’s income. That way, you always have padding in your bank account if you need it and you don’t have to worry if you end up with more or less income one month.
This year, I got to Rule 4. I started the year quite far away – I was about one paycheck ahead, and wanted to be two paychecks ahead. By October, I made it to Rule 4. I was completely living on last month’s income. Unfortunately, I didn’t stay there. I didn’t budget enough for Christmas gifts and upcoming travel, so I’ve had to dip into my December paychecks for my December expenses. It’s not bad, by any means. But I have some big travel planned for 2020, so I’m going to need to tighten the purse strings and get back to Rule 4 as quickly as possible.
Over all, I’m pretty pleased. December is the month of some big expenses, including my property tax payment, so I’m happy where I ended up.
Goal 3 – Increase Savings by $5000
I completely failed on this one. I did not manage to increase my savings at all. I also didn’t take money out of my savings, even with my bike crash and subsequent medical expenses. The goal here was to have money available for my upcoming trip. So I’ve got some significant work to do. I’m working on increasing my income streams right now, got a promotion at work, and will be taking on a temporary promotion as well this year, so I have a lot of opportunities to increase my savings.
I realize now that one mistake I made here was not prioritizing this goal. I didn’t check in on my goals and just assumed they would happen if I did everything right. Clearly, that’s not how goal setting should work. I needed to remind myself of this goal and keep pushing towards it. Even if I hadn’t managed to hit the $5k goal, I still would be ahead.
I’m still working on my 2020 goals. Did you set financial goals for 2019? How did they go? Are you going to join me for 2020?
Megan is a 40-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.