Good afternoon and welcome.
My New Years
resolutions intermediate goals come a bit later in January because I want to have a clear picture of my 2013 results and my 2014 capabilities (e.g. salary) so that I can make my goals realistic.
Today, I’ll list my more direct finance goals. In a later post, I’ll list other goals as they relate to finance in categories that include career, relationships, and public service.
Today, let’s talk numbers
2014 Goal #1: Debt paydown
I will pay off $27,000 in student loan debt by the end of 2014, by taking the following steps, in order to work toward being debt-free:
- Automatically sending $1,200 with each paycheck
- Sending all windfalls straight to debt
By automatically sending money with each paycheck, it prevents me from the temptation of spending it on other stuff and sets a high baseline. By sending 100% of windfalls — including bonuses, rewards, gifts, and money left over due to frugal living — I’ll both prevent the temptation of spending that money on other things and take a big, satisfying bite out of my student loan debt. That’s great for motivation!
Refinancing is more complicated because my loans are federal and thus ineligible for lender refinancing. This will require using more creative options including peer-to-peer lending such as that done through Prosper and Lending Club and balance transfers. My goal is to have the research completed by the end of January, necessary applications complete by the end of February, and my refinancings complete by the end of March.
The breakdown I’m aiming for is $24,000 from salary, $2000 from found money and $1,000 from refinancing.
2014 Goal #2: Retirement savings
I will contribute $17,000 to my retirement savings by the end of 2014, by maxing my Roth IRA and contributing to my 401(K) to my employer match, in order to work toward having enough for retirement.
Note that my goal here has to do with my contributions, not the final amount. My retirement accounts saw huge gains in 2013 thanks in large part to the performance of the market, but I understand that I can’t expect the same results this year.
I will contribute to my 401(K) up to my employer match before I see my paycheck and will aim to send $700 per month to my Roth IRA so that I will hit the $5500 maximum out by August.
I also have the goal of contributing $1500 to my Health Savings Account after switching to a high deductible health plan. This isn’t necessarily retirement savings (although my intent is to stack it as a younger, healthy person then use it in retirement), but I thought I should include this here.
Anyone have an interest in hearing about the research it took me to land on an HDHP with HSA? That seems like it should be its own post.
2014 Goal #3: Savings
I’m doing the 52-week savings challenge, y’all! That’s $1378 by year’s end. More on this in a future post.
2014 Goal #4: Cutting my spending
I will average less than $300 per month in food spending in order to send more money to debt paydown.
I became much better at bulk cooking in 2013 both for packed lunch and dinner, but still ate out (and drank out) more than I needed to, giving me a monthly average close to $430.
I will also switch to a prepaid cell phone service by the end of July in order to send more money to debt paydown.
I would not have believed that a fate worse than hell exists, and yet that is how I feel every morning waking up into a world where I send $90 a month to a big service provider to use a smart phone and data plan.
It takes all my strength to leave the house knowing that I’m playing so dangerously close to a triple-digit phone bill and I’m on a contract.
You might expect that the only escape from this living hell would be the sweet release of death!
As tempting as that idea had become, a number of providers of pre-paid cell phone service have emerged with another option.
More specifically, my goal is to spend less than $100 to make the switch, cut my monthly bill in half, and end up with a phone that I’m proud to show over social media.
And there’s the end. What are your financial goals for 2014?