Goals

2010 Goals

Below are our primary financial goals for 2010.

1) Increase net worth to $105,700
We finished 2009 with a net worth of $68,437.63, $7,162.37 short of our net worth goal. We’ve missed our net worth goal that past two years, so hopefully we can hit our 2010 goal of $105,700. We’re starting off a little behind the 8 ball because we didn’t hit our target this year, but based on my rudimentary forecast, this is a reasonable goal, and we should reach it if we stay focused.

2) Increase savings account balance to $20,000
We weren’t able to hit our savings goal in 2009 because we paid off our 6.5% auto loan instead. While we are starting 2010 with just a $2,492.73 balance in our savings account, I think we can reach $20,000 in savings if we make this a priority.

3) Contributing at least 15% of income to company 401(k)
This one is a gimme. My wife is already contributing 15% to her 401(k) and I’ve completed the paperwork to increase my 401(k) contribution from 8% to 15% in January. Now we just need to make sure we keep this up throughout the year.

4) Decrease debt by $1,000
After paying off our auto loan in 2009, the only debt we have left is $4,148.46 in student loans. We plan to pay $40/month extra to the student loan ($100/month total) so that we can reduce our debt by $1,000 in the next 12 months.

5) Increase tithe $25/month
We have been very blessed, especially since we began to be more faithful with our tithing, so we want in bump up our monthly tithe a bit. We consistently tithed $800/month in 2009 and plan to tithe $825/month in 2010.

It will be fun to look back in a year to see if we were successful in achieving these goals.

Goals

2009 Goals Review

3 Comments

2009 gave us a wild ride and we feel very blessed to have had as great of a year as we did. Below is a table compiling our net worth data for 2009 (click on table to enlarge). We set some goals for ourselves this year and overall, did pretty well. Below are each of our goals and the progress we made.

1) Increase net worth to $75,600

This goal looked doable, but we had a couple of challenges that kept us from hitting this goal. First, we missed our 2008 net worth goal by $5,716.31, so we started 2009 a bit behind. Second, we did not take into account short selling our house. The costs of the short sale and getting a rental unit were set us back a couple of steps. In the end, we got within $7,162.37 of our 2009 net worth goal, with a total net worth of $68,437.63. God willing, we should hit a net worth of $75,600 by February.

2) Wife to get a new job

My wife absolutely nailed this goal. After being laid off, she quickly got a job in the same industry as her last job, and with an even better pay structure and benefits. She received a company car, laptop, monthly phone and internet reimbursements, stock options and 401(k). Go wife!

3) Increase savings account balance to $20,000

Our short sale and moving into a rental unit hurt our chances of hitting this goal, but it still would have be possible, but we decided to pay off our auto loan instead. Our savings account balance at the end of 2009 is $2,492.73, $17,507.27 off our target. Now that the auto loan is paid off, we have $450 extra each month we can put into savings or invest.

4) Max out Roth IRAs ($5,000 each)

I’m surprised we were able to achieve this goal. We made up a lot of ground the last couple of months and were able to get $10,000 total ($5K each) into our Roth IRAs. This is a great feeling.

5) Contributing at least 5% of income to company 401(k)

We blew way past this goal. My wife began contributing 5% in April and increased it to 15% in August. I started 2009 contributing 5% and increased it to 8% in July. Our total retirement contributions (401k & Roth IRA) was $19,437.41, or 15.87% of our gross income. This sets a new benchmark for us.

6) Decrease debt by $8,000

Overkill. If you remove our $326,675.82 mortgage loan (since we short sold), our debt in December 2008 was $20,603.66. Our debt in December 2009 is only $4,148.46, a $16,455.20 reduction. Paying off our auto loan (loan balance in January 2009 was $15,586.49) was the key to smashing this goal.

7) Draft wills

Not done. We’ve decided to hold off on this goal until we have kids.

I will be posting our 2010 goals very soon.

Income Statement

December 2009 Income Statement

December was another strong income month and low spending month too (click on spreadsheet below).

In addition to our regular paychecks, I received a 3rd “extra” check and my wife received $330 in reimbursements from her company (3 months worth).

Our expenses totaled $5,174.03, a bit over our budget of $4,724.98/month, but not bad.

Not much else to report. The new year has begun and January looks like it may be an expensive month for us. We took a trip our of state from 12/30-1/2, we have payments due for our 6 months of life insurance, and I have a large 12 month gym membership bill due. We’re also going to see a bit of a drop because my 401(k) contribution increase from 7% to 15% begins in January.

Net Worth

December Net Worth Update (+$4,787.45)

2 Comments

December was a strong end to 2009. Our net worth in December increased $4,787.45 from last month, to a total of $68,437.63 (click on spreadsheet below). We missed our 2009 net worth goal of $75,600 by $7,162.37, but I’ll be reviewing that in another post.



What Worked

With the end of the year here, we were happy to be able to finish maxing out our Roth IRA contributions this month. With a final contribution of $800 to each of our Roth IRA’s, we hit the $5,000 per person maximum for the year. We contributed a total of $2,911.66 to our retirement accounts (401k & Roth IRAs) this month and saw our retirement accounts increase to a total of $4,854.55!


What Didn’t Work

Everything went perfect.


Next Month

January starts a new year and new goals. I’ll be reviewing how we did with our 2009 goals and outlining our new 2010 goals within the next week. Happy New Year!



401(k)

Rebalanced 401(k)

3 Comments

I just finished rebalancing my 401(k) to move our current asset allocation back in line to ouroriginally planned asset allocation.

The percentages weren’t off by much, but I figure this is a good habit for us to get into at the end of each year. Here’s what the 401(k) looked like:

Here’s what it was rebalanced to:

My wife’s 401(k) was opened mid way through the year and is a much smaller balance, so we’re not going to bother rebalancing it this year.

401(k)

Increased my 401(k) Contribution

10 Comments

We’ve wanted to contribute at least 10% to each of our 401(k)’s for a while now. My wife just increased her 401(k) contribution to 15% in August, but mine was only at 8%. I’m happy to say that I’ve now increased my 401(k) contribution to 15%, effective my 1st paycheck in January.

If we’re both able to keep our jobs throughout 2010, we’ll contribute a total of $18,366 to our 401(k) accounts from our regular paychecks. My wife also has 15% contributed from her quarterly bonus checks. God willing, we may be able to break $20K in total contributions to our 401(k)’s in 2010.

Roth IRA

2009 Roth IRA’s Fully Funded

3 Comments

We have fully funded our 2009 Roth IRA’s; $5,000 to my wife’s Roth IRA & $5,000 to my Roth IRA!

It feels good to hit this goal, especially since we only contributed $3,125 to each of our Roth IRA’s last year.

Once our planned 401(k) contributions go in this month, we’ll have contributed a total of $19,437.41, or 15.87% of our gross income, to our retirement accounts (401k’s & Roth IRA’s) for 2009.

Career, Income

This Is Only Drill (at least for now)

5 Comments

My wife found out yesterday at 30% of her company received an email that morning explaining they were laid off. We feel terrible for her coworkers that were laid off, especially right before Christmas.

Thankfully, my wife kept her job, but it was certainly a wake up call. So, I ran through the numbers to see how we would have been affected if she would have been part of the lay off.

The 1st negative impact would have been losing the $2,770/month income she takes home and her quarterly bonuses. Next, would be her company car and $110/month in cell phone and internet reimbursements. Finally, she’d lose her insurance and 401(k) plan (which she contributes 15% to).

We took a look back at what unemployment paid her before she found her current job. I was surprised it was a little over $400/week after taxes. That more than I remembered and supplements ~60% of her regular paychecks. Cutting back a bit on our retirement contributions and unnecessary spending would make up the difference. Losing the company car would be tough, but since we just paid off our $450/month auto loan, we’re in a better position that ever to take on another (small) auto loan, if necessary. Health isurance is very important, and since my wife is young and healthy, she easily qualifies for good health insurance that only costs $80/month.

Working through this drill was reassuring. Should her company do another lay off in a few months, and if she is let go, we should be fine. One possible wrench is my job. Sales are starting to soften a bit at my company, but we’re introducing innovative new products in February that should increase sales. Worst case scenario, I believe I’d be keep on until at least May. In the meantime, we’ll start socking away cash for added security. And of course, say our prayers.

Income Statement

November 2009 Income Statement

2 Comments

November was a strong income month and reasonable spending month (click on spreadsheet below).



Our expenses totaled $8,434.66, but $2,925.74 of that was to pay off our auto loan. That brings us down to $5,508.92 in other expenses. Not to shabby when you consider we purchased Christmas gifts, took a road trip to see my family, and went over budget in our “Goceries” and “Household Items”.



The big boost in income in November came from a $4,872 ($2,255.97 net) quarterly bonus my wife received. In other good news, my company increased my salary another 2.1%. We also earned $75.00 in credit card cash back rewards and $0.63 in interest income from our online savings account.



December is here already and it’s an “extra” check month for me. Plus, we’ll be receiving $330 worth of reimbursements that my wife is due. Our expenses should be pretty normal, with the exception of a trip out of state planned at the end of December.



Net Worth

November Net Worth Update (+$9,438.27)

1 Comment

This was our best net worth increase month ever. Our net worth in November increased $9,438.27 from last month, to a total of $63,650.18 (click on spreadsheet below). Our previous record increase was September 2007 with an increase of $8,496.14.

What Worked
We got a lot done this month. Thanks to my wife’s $4,872 ($2,255.97 net) quarterly bonus, we paid off our 6.5% auto loan! Now we have an extra $450 to save/invest each month. We also contributed a total of $4,257.22 to our retirement accounts (401k & Roth IRAs), a large portion of which was contributed to our Roth IRAs in an effort to reach the $5,000 max contribution by the end of the year. We saw our retirement accounts increase to a total of $6,178.11! On top of all of that, we socked away $500 into our savings account.

What Didn’t Work
Nothing, everything went WAY better than we expected.

Next Month
God willing, December should be another strong month. We’ll likely miss our $75,600 net worth goal for the year by a good margin, but we’ve made great headway, all things considered. I’ll be posting a review of our 2009 goals next month.

Our path to financial independence and retiring early.