My dad always tells me “what gets measured gets done.” I find this is entirely true for me. When I was in school, I always did really well, partially because there were always set assignments that needed to get done by x date. Unfortunately, the real world doesn’t often have those kinds of hard deadlines and accolades when you do well, unless you enforce them yourself.
I’ve done a lot of reading about financial independence / early retirement, but I’ve never put concrete goals in place. I recently looked very generally at numbers and figured it would be reasonable to reach FI at 45 (15.5 years from now), but then didn’t drill down into the day to day details of how to get there. When I had a concrete goal (pay off my student loans), I really focused on throwing every last bit and could to get it paid off as fast as I could. It helped that it was an 8.5% interest rate so every day early made a noticeable difference.
Since paying them off, I’ve been floating because I haven’t had an easy concrete goal to strive for, but it’s past time that changed. I just did the calculations, and we saved 22% of our household income last year, which means there is a lot of room for improvement. By writing these goals down, I will be much more likely to follow through and make them happen. My type A self hates to fail, sometimes to my detriment.
Year end goals:
- Determine real milestones on the track to financial independence (FI). My husband does better with short-term planning, whereas I’m perpetually looking 5-10 years out, so I need to find a way to track that motivates us both.
- Track husband’s work tools/supplies/clothes purchase diligently. I know we left some money on the table at tax time last year because some of this got missed. I’d like not to give the government more of our money than we absolutely have to.
- Pay off remaining $4,950 on our real estate investment (we have a very small % ownership of a larger apartment community).
- Begin next small real estate investment (payoff will start sometime this fall).
- Research and finally decide on a 529 plan for our son. We know we do not want to use the Washington GET program and we live in a no income tax state, so our options are open. I’m leaning toward either the NV or UT 529, but I want to do a little more research first. The other option is to simply open a custodial investment account in his name instead, which is a lot more flexible long term.
- Be intentional about charitable donations. This has been something I feel is lacking in our budget, and one I want to do better on. I’ve made sure this year to find at least one charity each month I want to give to, and I’m finding the more that I give, the more I think to give. While this isn’t going to help us reach FI, we are in such a blessed situation being born to educated families in the United States and need to acknowledge this better and help where we can. This also means finding a way to give with my time as well as cash.
- Spend more quality time with my son to remind myself why financial independence is such an important goal and how it is already making my life better in the short term.
- Continue running to work once a week and find a way to ditch the car more days a week. I also want to do an analysis of the cost of busing versus driving since it is less than 10 miles including daycare drop off (and 6 miles on the day my MIL comes to our house). Environmentally, taking the bus will be better every time, but at $2.75/trip, I’m not sure if it is financially.
In writing down my longer-term goals, I realized my list of short term goals keeps getting longer and longer because they aren’t “urgent.” In order to push them up my priority list, I’m adding them here as well.
Short term goals:
- Call insurance (USAA) to see if we can get a better home insurance rate. Maybe life/car insurance as well.
- Open up separate credit card just for work purchases – there have been a lot lately and it hasn’t been the easiest to track, and I think we actually spend more money personally as well because our credit card balance is pretty high each month already (always paid in full though).
- Find an affordable dental vet option for our dogs – they’ll be 7 and 6 this year and really need regular cleaning, but our vet charges $1000+ per cleaning. Ouch.
- Move husband’s TSP and my old 401k to an active account so we have more control over their investments (both are just sitting right now).
- Open up a new IRA (my old one is a grandfathered plan and frozen so cannot contribute more to it). Help my husband set one up as well and get auto deposits up and running.
Along with these goals, I need to keep focused on the little $5 and $10 purchases that sneak up on me and become big purchases over the course of the year (I’m looking at you, easy pick up work lunch).
Lifestyle creep has gotten to me more than I would like to admit since the early days of our marriage – the military and part time retail don’t pay very well – and we found plenty of things to do and be happy with while pinching pennies. Now we’ve been pinching dollars and letting those pennies fall through our fingers.
While I don’t expect our spending to get down quite to that level again because we’ve since added a number of pets, a house, and a child, we should definitely be saving more than 22% of our income. Here’s to heading into our 30s with smarter and more intentional choices in all areas of life. We’ll be happier for it.