Happy March!
Since I was busy packing for our Asian adventure in December, travelling most of January, and then playing catch up at work in February, this is my first opportunity to plan and set my 2018 goals. It doesn’t bother me to be setting goals even after one sixth of the year has already passed, I strive to adjust goals throughout the year as circumstances and inspirations change. Since 80% of people have fallen off of their 2018 New Year’s Resolutions by now, March is a good time to review, tweak or re-commit to goals set on January 1 anyway. Setting my financial goals now also makes sense since Joe is about to start his new job the first week in March which will almost double our income. So it’s a great time to establish our plan for managing everything and make sure our ducks are in a row.
So here they are!
My 2018 Financial Goals:
Goal #1 Make an extra $15,001 to remain the primary wage earner, the one bringing home the most bacon, the top dog, the woman improving the statistics for women everywhere. Joe and I have combined finances so it doesn’t really matter who brings in the most, but I’m competitive and I prefer contributing an equal amount or more to our finances. Who doesn’t prefer a gold medal over a participation ribbon? I’ve been the breadwinner for the last 3 years and I want to see if I can push myself forward, up a step, to win the most bread again in 2018. We will both be salaried and his annual amount is $15,000 more than mine, for good reason; he has a masters degree now and is freaking brilliant. That 15K is well deserved, but I’d like to see if I can out work it.
Goal #2 Save 50% of our gross household income from March through December. One concern anyone would have with doubling income is lifestyle inflation. By keeping our costs comparable to 2017 expenses, this will help us keep our spending in check. Also, there were times on the farm when we saved more than 50% of our income in a year and I would like to get back to that percentage. While Joe was in grad school we were closer to 30-40% savings, which is decent, but an area for improvement. Our income will be higher but we pay a ton in taxes so this will be a challenge. Doable, but a challenge.
Goal #3 Max out everything. Both 401Ks, both Traditional IRAs and my HSA. These are all of the tax advantaged accounts that we have access to. I realized in December that I could have maxed out my 401K in 2017. I had planned all year to increase my contribution % when a correction came but as we know, one never did. I realized too late that maxing this out would have saved us about $3000 on our taxes. I won’t be making that mistake again!
Goal #4 Improve our asset allocation.
Here is our current asset allocation:
17% Income producing assets
83% Non-Income producing assets
These percentages haunt me at night. The bulk of the difference here is our house. Although it is likely that it has appreciated significantly since we bought it, it is doing nothing from a cash-flow perspective. Transitioning our net worth to more income producing assets will accelerate growth and help us get to our early retirement goals sooner.
Here is my goal asset allocation by 12/31/18:
30% Income producing assets
70% Non-Income producing assets
This is still lower than my desired ratio but I want to set a realistic goal. Although I’m much more comfortable with investing now than I was 3 years ago, trying to invest large dollar amounts (more than $1000 at a single time) is still intimidating to me. Also, it can take some time to sell/move assets and research investing options so I anticipate continuing to work on this through 2018 and beyond.
Goal #5 Spend 100 hours providing financial coaching. Currently I spend about an hour a week providing financial coaching on online sites and discussion boards. I want to increase this commitment substantially. I’m looking into volunteering with local agencies and working on networking to connect with more people in need. The amount of financial stress in the world really bums me out so I want to see if I can make a greater impact.
Goal #6 Set financial boundaries and communicate them to family members. Ok, this is a tough one. I believe that families should help each other out in times of need but I also have seen the damage that providing long-term, unlimited financial support can have on a person’s life. It’s human nature to choose easy survival over difficult survival so if you are always bailing out your family, they might stop trying to improve their lives, or worse, they might never learn to stand on their own feet to begin with. They might never learn how to make their own safety net. Getting to feel independent and strong financially is one of the best feelings. I swore to myself a long time ago that I would never rob my brothers of this opportunity. They are all grown adults now and I need to work on staying out of their business and letting them fix their own problems.
Goal #7 Monthly net worth updates. I started doing this midway through 2017 and I didn’t realize before what a great way it is to keep up on big picture financial information! I do weekly reviews of our spending to categorize our expenses and look for fraudulent charges so being in the detail all the time, it doesn’t seem like we are making much progress. Seeing the our net worth total improve every month is very motivating.
Overall, I’m really excited for the next 10 months. These are the most detailed and ambitious financial goals that I’ve ever set and I think that achieving them will improve our finances greatly.
What are your 2018 financial resolutions?
What changes are you making to your money in 2018?