2008 Goals

Well we are well into March and I haven't updated My Financial Odyssey with my 2008 goals. Can you blame me? With so much uncertainty in my job situation and moving to one of the most expensive cities in the country, I felt like any goal I set in January without my living and job situation nailed down would have been in vain.

With that said I have thought long and hard about this year's financial goals. Due to extenuating circumstances I was not able to achieve any of the goals I set out in January. However, this year I am employing the SMART Goal system.

For those of you who don't know SMART stands for...

Specific

Measurable

Attainable

Realistic

Time Based

On that note here are my 2008 Financial Goals:

Goal #1

What: Establish a $1,000 E-Fund

How: Based on the $325 currently in the account (I took some money out to help pay for the move to NY) with $100 monthly contributions I should easily achieve this goal.

When: By 2008 Year End

Goal #2
What: Repay parents the $2,500 loan that was taken from them in November.
How: Pay $500/month which will be matched by my girlfriend.
When: May 2008

Goal #3
What: Save $5000 for engagement ring and proposal.
How: Save $500/month till May (when parents are paid back). Then increase saving to $1000/month.
When: September 2008

Goal #4
What: Save 6% of salary in my company's 401K.
How: Starting in July (when I am eligible to enroll) set up automatic paycheck deductions of 6% of my biweekly pay. By year end contributions should total $2,250.
When: By 2008 Year End

And now for the STRETCH GOAL!

What: Pay down $8,000 in Credit Card Debt! This will more than but my credit card debt in half!
How: Pay $500/month till September (totalling $5,000). Then contribute the cash I was contributing to the engagement ring towards the credit card debt for the remainder of the year (totalling $3,000).

When: By 2008 Year End

I think that the first four goals are very attainable assuming no major expenses arise during the year.


Cheers,
TMac

[Photo Credit]

Evaluating the 2007 Goals

Well with one month left in the year I think I can say with utter certainty that I will reach none of my financial goals that I set out to achieve in March. As of right now I am 43% of the way towards my goal of paying down $5,000 in credit card debt; I am 20% of the way to saving a $2,000 emergency fund; and I am still 100% of the way from saving $3,000 towards my 401K.

Why will I not even reach one of my goals? Well, simply put....$hit happens!

1. When I drafted those goals last March most of my circumstances were different. I had a roommate that I was splitting rent and utilities with. At the time the plan was to live together with him, ma boo, and his wife in a larger yet more cost effective apartment. I am currently footing the bill for an apartment on my own as well as all utilities. Things change.
   
2. They were aggressive stretch goals to begin with. These goals would have required me to really hone in on my spending and trim alot of unnecessary spending.
3. The annual raise wasn't as high as I was expecting. I was expecting 10% and got only 8.5%. While only amounting to couple thousand dollars, this still helps!
4. I failed to regularly review my progress towards the yearly goals. Also once the underlying assumptions changed, I failed to update my assumptions and expectations.
   

Am I disappointed about not hitting my goals? Hell yeah I am. Am I going to throw in the towel because I failed to reach them? Hell No!

I have a few goals in store for next year that are even more aggressive than those I had for 2007. Will I hit them? Who knows but I promise I will learn alot in the meantime.

Tune in next time - same time, same station!

Cheers,
TMac

[Photo Credit]


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2007 Financial Goals

Since I decided to start this blog after the new year I never had a chance to discuss my financial goals for 2007. They are (in order of importance):

• Reduce Credit Card Debt by $5,000.
  

I am in the process of transferring most of the balance of my credit cards over to 0% cards so when I make a payment all of the payment will be going towards principal. I have a couple of concerns about this like how many is too many cards to open up and what do I do with them once I have paid the balance off of the card? Do I leave them open or close them gradually. I am currently planning on paying $500 per month towards these cards. Unfortunately I am seeing a couple of kinks in this plan - roommate's bachelor party, wedding present, travel to the wedding in Michigan and a weekend trip to Tampa in May. How I plan those trips will directly impact whether or not I reach this goal.

• Bolster Emergency Fund to $2,000.
  

During the time I was unemployed, I wish I could have tapped into an emergency fund. Unfortunately there was no such fund. At my current cost structure $2,000 will last me just about a month. I plan on aggressively attacking this goal next year.

• Contribute $3,000 to my 401K.

This is definitely my stretch goal. It is going to require alot of planning and luck to achieve. Why will it be tough? Two reasons - 1. Open enrollment in my company's 401K isn't till August. 2. Any raise or bonus that I get does not go into effect till August either. Right now the initial plan is to contribute the % increase in pre-tax salary to the 401K and live off of the same "net salary" or "take-home" pay that I have now. Essentially, adjust the pre-tax 401K withholding so that I end up with the same amount of take-home pay as I enjoy right now. Unfortunately I am not expecting a bonus - it is rare that first year associates get bonuses.

If you are reading this site in a browser you will notice that I have included my 2007 goals in the top left pane of the website. This will serve as a simple dashboard to measure my progress against these goals.

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