Setting goals of any kind is an important practice to force yourself to do something. I’ve found that it can not only motivate me, but change my perspective towards the goal – for example, now I look at financial goals as quite fun. It’s exciting to see progress being made and once you realize that, you can use this strategy to your advantage.
This is the main reason why I set four goals at the beginning of this year. This year has been quite the roller coaster for us with moving, getting a dog, and lately, Mrs. 20s leaving her job without a new job. While these changes have made accomplishing our goals that much more difficult, our goals help keep us on track, even if they are close to impossible to reach.
My 2014 Goals
For those of you who don’t remember, or started following this blog sometime in this year, here’s a list of the goals that I established at the beginning of the year.
- Contribute $11,000 to our Roth IRAs (maxing them out)
- Save over 10% of my wife’s income in her 403(b)
- Save $20,000 more towards our future home down payment
- Increase our Net Worth by 30%
As you can see, these goals are not only measurable (which is a sign of a good goal), but they are also focused around two topics: real estate and retirement. All of them focus on prioritizing the future over the present, another good indicator of a solid goal.
Update on My 2014 Goals
Since it’s been several months since I last updated you on these, and it was time that I re-focus on my goals, it’s time to give an update on these goals.
Contribute $11,000 to our Roth IRAs (maxing them out) – Waiting
While we have made one small contribution to Mrs 20s Roth IRA this year, this is almost completely unfinished. We have some cash sitting around to where we could probably max out our Roth IRAs, but I am waiting to see what happens in the next few months. We have until the end of the year (actually tax day of next year) to meet this goal, so I’m not concerned about this.
What would I do with this money instead of putting it in our Roth IRAs? I’m glad you asked…
Save $20,000 more towards our future home down payment – Done!
Another goals our ours is to get ready to buy a condo. We hate the idea of throwing money away by renting and believe it or not, we are paying more in rent for a 1 bedroom apartment than what we would pay for a mortgage on a 2-3 bedroom condo, including HOA fees.
Coming to grips with this reality, as well as discovering that we may qualify for a Mass HUD no mortgage insurance loan because of our low income (a side benefit of having two nonprofit professionals), means that we’re motivated more than ever to buy our own home. Starting with a condo would allow us to still prioritize retirement as well as not have to do a lot of upkeep on the home.
All of that to say that we’re contemplating not maxing out our Roth IRAs this year so that we can use that money towards a down payment for our home. I’d say it’s a long shot for that to happen, but you never know what will happen until it happens – and it’s better to keep our options open at this point than have to pull the money out of our Roth IRAs in a couple of months (although my Roth IRA guide details how/why you can do this).
This goal was originally a lower priority than the Roth IRAs because it seemed a 2-3 project, but now that we are thinking differently, I’d say that we’ll reach this goal. We still want to have 20% as a down payment, but depending on the loan that we are approved and what comes on the market in our area, we may go in with less than that. Either way, this goal is pretty much accomplished. Boy, does that feel good!
Save over 10% of my wife’s income in her 403(b) – Fail
This goal is pretty much done for since Mrs. 20s no longer is an employee. She’s currently working as a contractor, but as such, she doesn’t have any benefits – including a 403(b). We were putting in over 10% before she left her previous job, so we’re not too far behind; in theory, if she were to get a long-term job, she could increase her contributions to reach this goal, but again, we’re probably going to prioritize saving a down payment for the short term. Our retirement will take a small hit because of this, but we’ll just ratchet up our savings rate after we buy to make up for it.
Increase our Net Worth by 30% – On Pace
While there are only 4 full months left in the year, I’m feeling pretty good about this one. I’ll have to wait and see what happens the rest of the year, but our net worth has been increasing steadily each month.
I’ve been using Personal Capital to track our net worth for the entire year now, and I have to say that there is no easier way to do it. I have the app on my iphone and it takes me about a minute to login with a secure password and for the app to update the balances from all of my accounts. As I’ve mentioned before, I also have Quicken, a known budgeting software and the investment accounts are much more accurate on Personal Capital than Quicken – for some reason Quicken has trouble with investment accounts. Having it on my mobile device allows me to check the balances frequently, which protects us from fraud and so forth.
While this year has been a bit of a whirlwind, especially with Mrs 20s leaving her job, we are doing surprisingly well when it comes to meeting our goals. I’m excited to see what happens in the next four months and strategize about ways I can work on accomplishing most or all of our goals.
You’d be paying less per month for the 2-3 bedroom condo, but if you stayed where you are, you wouldn’t need a large down payment and that money could be put to some other use. Depending on how much the down payment is, that could be a really significant amount (I live in LA, where a down payment would be a MINIMUM of $100,000. If I remember correctly, you’re in the Boston area now, so I doubt it would be quite as much, but definitely still something to consider.