2008 Goals...for now

After much thought and procrastination, below are the things I will be able to say at the end of 2008/beginning of 2009:

-*-$10,000 of my pre-tax salary went into my 401k.

-*-My 401k portfolio is aligned and balanced towards my long-term goal of aggressive growth and diversity.

-*-I've evaluated carefully whether or not to keep my Roth IRA with my bank or move it to another broker like Vanguard or T. Rowe Price. In the end I made the best possible decision that aligned with my long-term goal of growth and keeping my overall retirement portfolio diverse.

-*-I contributed the full amount of $5,000 to my Roth IRA.

-*-I've stayed out of debt.

-*-I reached $10,000 in my unemployment fund, then put it in a CD-ladder.

-*-My health care/deductible fund reached $1,500. That's enough to cover my deductible for the year and one hospital copay. Let's hope I don't need it! I choose to save my money this way instead of going with an FSA because if the funds go unused by the end of the plan year, I would have to forfeit them. This way, if I don't use them, I can put them in a high-yield savings account to earn interest and will be the seed money for the following year's deductible. Makes sense in my head, anyway.

-*-I set aside $1,000 for travel this year. Just in case. The only thing that may come up would be an extended weekend to visit a friend. If that money doesn't get used this year, it will be seed money for next year's travel fund.

-*-I saved $7,000 towards the purchase of a new computer and kick-ass monitor.

-*-While I have more goals and dreams that I want to fulfill, I'm far better off this year than I was the year before.

Taxes: Done

I believe this is the earliest I'd ever file my taxes. I also did them for free! Since my adjusted gross income for 2007 was below $54,000, I was entitled to file for free with various online preparers. I went with TaxACT. I would have gone with TurboTax, however you had to have less than $30,000 to file for free with them. TaxACT is easy enough to use, it's just that it's unnecessarily lengthy. What takes multiple screens with TaxACT is done in one with TurboTax.

While I'm getting back $622 from the feds, and I had to pay $1 to the state. Overall, not bad. However I believe I can do better. when I get to work tomorrow, I'm going to set about changing my federal withholding from 1 to 2 as I believe I need my money more than my government does.


Health care fund
Pay day was Friday and I was able to update my HC Fund up to 72%. It will be fully funded by the next paycheck.

And in other news
I'm getting close to posting my goals for 2008. I'm feeling a little better since I'm making a bit of progress. I'll have everything detailed sometime this week.

Oprah saved my financial life

Back in January of 2007, a coworker and I were chatting about money and how we could never quite figure out where ours was going. She mentioned an episode of Oprah's Debt Diet and if I had seen it. I'd never even heard of it so I went to the site and was impressed by all the information. I can see you rolling your eyes, but stay with me and remember, this was at the beginning of my fiscal journey.

So yeah, I watched the videos, read the stories, but it wasn't until I got to Step 3, Part 2: Lower Your Interest Rates that the ball really started rolling for me. I printed Jean Chatzky's script for talking to the credit card company and called them up. Don't know that not only did they lower my interest rate from 18.24 to 15.24, they gave me 1,000 flier miles! That was the trigger that got me motivated to get out of debt and move to financial independence.

My financial accomplishments in 2007

  • Paid off $8,200 in credit card debt within six months.
  • A two-week luxury vacation to Quebec: $4,000. Paying it ALL off the day you get home because you saved the money beforehand: Priceless.

I've contributed:
  • $9,000 to my 401k.
  • $1,000 to my emergency fund.
  • $3,600 to my unemployment fund.

2007 was the first year in a long time where I didn't wake up every morning feeling like my life was a waste. I had a goal of getting out of debt. I lived and breathed it every day. Not only did I accomplish it, I flew past it and was able to set and accomplish new goals. I feel like I'm taking good care of myself by managing my money and feel thankful and lucky to be in the position I'm in. Granted, I'm not wealthy by any means, but I am far and beyond more secure than where I was a year ago. With planning, focus, and luck I'll be saying the same thing this time next year.

December 2007 net worth update

My net worth increase by $3,500 over November. My YTD rate of return for 2007 was 10%. Um. Boo. One of the things I need to do soon is readjust my 401k assets. I could do the target date fund my employer set up, but you have to pay a fee on top of the fees for the funds themselves. I'm thinking, why can't I mimic the same thing myself?

I messed up. Bad.

I haven't posted in a while for two reasons:

I'm having trouble nailing down my after-tax saving goals for 2008 and a plan of action for them.
Here are my tentative goals, in no particular order:

$1,500 Health Care Fund
$3,600 Additional three months to Unemployment Fund
$5,000 2008 Roth IRA contribution
$2,000 Travel
$5,000 New computer (to be purchased in 2009)

I went back and forth about exactly how to save this money. Should I save for each goal in monthly amounts, or should I focus on individual goals until it is met, then move to the next? It's mainly the Roth that has me thinking about this. Is it better to pay $416 a month for the year, or save up the $5,000 within three months then dump it into the Roth as a lump sum? I'm not really sure how to handle that. I'm also considering moving the Roth from my bank to Vanguard, but that's something to consider later. There's a bigger issue that's throwing a wrench in my plans...

I spent too much money last month. Way. Too. Much.
To the tune of almost $800. And it's on my credit card. Now, I have the money to pay it off right now. That's exactly how much I wanted to put into my savings that will instead go to this credit card payment. To say that I am unhappy about this would be the understatement of the year. As much as I'd like to chastise myself for getting into this situation, that's not going to get me any closer to a solution. The good news is that this credit card has zero interest charges until May. Even so, I find having that much debt on there dangerous and only invites more frivolous spending.

I'm going to pay the entire balance. It's going to cramp my savings, but so be it. I can look for ways to make up that $800 through overtime, my tax return, project gigs, whatever.

Oh! Another thing I have to do!
Create a new budget for 2008. I wanted to wait until I get my first two paychecks for year before I wrote this up, however I know that I'd like to be more aggressive with my after-tax savings. I easily saved $1,300 a month in 2007. I'd like to up the ante in 2008 to $1,500 with a stretch goal of $1,600. To do that, I'm going to look at my budget to see what I can work on.

Everything still feels up in the air and unsettled
Not all my goals (except for the Roth contribution) are written in stone. I believe there will be some changes to come. Plus some other non-saving goals. I just wanted to stop avoiding this unpleasant financial hiccup. :)