As we are getting closer to ending this hellish year and starting fresh with 2021, I have been thinking about what my financial goals should be in the new year.
I know I want to get out of credit card debt.
I know I want to complete a $5000 savings challenge. (This would probably be conucurrent with getting out of debt.)
I know I want to increase my 403b contributions.
I know we want to continue monthly contributions to our church.
But other than that, I don't know what we want to do or accomplish. Even those are vague. We need to sit down and flush out our financial goals. We can't achieve them if we don't define them.
Goals are always so hard for me because I feel pulled in so many different directions. I want to get out of debt. I want to save for short term goals. I want to save for long term goals. I want to give generously. But there never seems to be enough money to do it all.
Last year, I had 20 financial goals for 2020. It was too many! We met about 65% (13 out of 20), but it was too much to keep track of and to try to meet them all. This year, I know I want to pare down my goals and focus in on what is the most important to us.
I'm looking forward to seeing everybody's goals and hoping maybe they can inspire mine.
December 17th, 2020 at 11:52 pm 1608249127
What does your debt cost you each month in interest? Get rid of the debt, that money flows to your available cash.
Does retirement savings have a ‘match’ element? Meet that, and that money adds to your savings.
Are you saving for retirement pre tax? Depending on you tax bracket, you could get $.12 - 25 cents in tax reduction for every dollar you
save.
Are you taking advantage of an HSA or FSA accounts? Again, based on tax bracket, you get an automatic tax benefit on money saved.
And make sure you aren’t giving the government an interest free loan by over paying income tax. Your goal should be to not owe, or owe a small amount in April. If you get a big refund, you have wasted money.
For savings, which goals are needs and which are wants? When will you need to replace cars/appliances/roof?
Get out of debt, then save for those based on cost divided by time - need $1200 in a year? Save $100 per month.
Money after that can go to wants.
This assumes you have a six month emergency fund, and the necessary insurance for your situation.
December 18th, 2020 at 09:39 am 1608284368
December 18th, 2020 at 04:24 pm 1608308670
Of course, the market will fluctuate, but the match and the tax savings are guaranteed. You have to look at the full financial picture. Some companies don’t match. But some people are in higher tax brackets - their tax savings might be 25%. Paying off a 6 percent car loan instead of investing for retirement leaves money on the table.
December 18th, 2020 at 05:01 pm 1608310871
My goals in 2021 are to continue to max out my TSP & IRA, pay off my remaining credit card debt - I’m almost there!, and to build back my emergency fund savings. More abstract are to apply for promotions, increase my income, & sell my home.
I would limit goals to 10 & they don’t all have to be financial.
December 18th, 2020 at 08:50 pm 1608324652