I’m very fortunate to work for a company that rewards me generously for my hard work on an annual basis. After my year-end review, I decided to write down my financial goals for 2018. Like many of you, realizing a pay raise almost always immediately titillates my excitement for all the things I’ll soon be able to afford. However, this time around I asked myself ‘how can I live on the same net income as I do now and allocate the excess income more responsibly?’ This question became the premise of my goals.
How can I live on the same net income as I do now and allocate the excess income more responsibly?
- Increase My Roth 401K Contributions By 2%
I currently put 6% of my gross pay into my Roth IRA. For the obvious reason of “I’m trying to live good when I retire”, being able to increase this amount is vital to that cause. And while my employer contributes a very generous amount on an annual basis my goal is to increase my personal contribution by 2%-5% each year.
- Put Money Into My FSA
My current health plan allows me to be eligible for a Flex Spending Account. I had been eligible for this through previous employers and am embarrassed to say I had never taken advantage of it until last year. An FSA is an account that sets pre-tax money aside from each paycheck for any medical related expenses for you or your dependents. Anytime you are able to escape the evils of taxes and lower your taxable income (legally, of course) – DO IT! I opted to put my full deductible into my FSA for 2018 because if I’m going to have to pay that amount anyways (which I anticipate I will between health/dental) I might as well be able to pay it fully pre-taxed!
- Plan Ahead For All Foreseeable Costs in 2018
In 2018 Tommy and I have 2 trips planned so far, including an international one in March. I always like to give myself as much time as possible to plan for our trips. This includes creating a budget and estimating all costs involved because I want to make sure we’re well prepared and able to enjoy ourselves while traveling. This is not to say I haven’t indulged in the occasional ‘spur-of-the-moment’ getaway but I certainly don’t encourage that as it can stimulate irresponsible behavior. Planning for trips and other large costs (i.e. home renovations, new car) in advance has helped me save hundreds if not thousands of dollars in the past (like that time I paid for our Asia trip with all supplemental income) and has also helped me avoid unnecessary stress.
- Pay Off My School Loan
I made payments toward my school loan while I was still in school and also took advantage of my employer’s tuition-reimbursement program so my outstanding debt for school is currently $2,347.59. And because I don’t believe in spending a penny more than you ever have to I’ve decided to pay that off before the grace period ends in July. I’ve done the math and between now and the first due payment I will have been paid 13 times. $2350/13 = $181 per paycheck. I got this!
- Devote 25% Of Each Paycheck To Savings
In a previous post I talked about how I set aside $1000/mo for savings in order to practice paying for a mortgage. Well, now I don’t need to practice because in case you missed it we bought a house in March. Recuperating financially after our wedding and home purchase was tough. However, I’m still an advocate for saving aggressively so I’m committing to allocating 25% of each paycheck into savings.
Personal Finance was something I got heavily into after reading a few great books and stumbling across some awesome finance blogs. Now that school has concluded, this should allow me more time to catch up on some overdue reading. A couple books on my short list are The Index Card by Helaine Olen and Your Money Your Life by Vicki Robin.
- Blog More About Finance
I was a bit insecure about including finance-related posts on my blog at first because not many people knew it was something I had grown increasingly interested in. However, after I wrote my first Finance post a handful of people reached out to me – people I would never have guessed even read my blog – to tell me how much they appreciated the post and how it had inspired them. And while I don’t write with the intent to yield endorsements, it elevated my confidence in writing honest posts like these about my financial efforts (mistakes and all) and has motivated me to pay closer attention to what I’ve done right and wrong in my experiences.
I’ll update my progress as the year advances. What are some of your goals in 2018?