9 Financial Goals I’m Making This Year

1. Pay off all debt (outside of mortgage)

I remember several years ago, looking at a Google Sheets report I built that showed me exactly when I would have all my loans and notes paid off. The date on that report read August 2022. I still remember how daunting; how far away and unattainable that date felt. But I told myself that this was the plan and I was committed to sticking to it. Then, this happened!

Those of you who follow me on IG and FB know that I ended up paying off my school loans and the last of my car note this year to officially cross this long-term goal off of my list! And not only did I cross it off, I crossed it off nearly 2 years early of the original goal date (I officially made my last payments the first week of January).

2. Refinance our mortgage

This is another financial goal that we just crossed off our list. With the current interest rate environment being so low, it wasn’t a matter of “if” we would refinance our home but “when”. We purchased our home 4 years ago with an interest rate of 3.8% (which was a good rate then) and after getting a couple quotes, realized we could bring that to below 2.6% with a refi. Working with our previous broker, we were able to cut our closing costs to only $700 and forego an appraisal. The refi brought our mortgage down $160 a month, which frees up a nice sum of cash for us on a monthly basis. Doing the math we would only need to stay in this home for 4 more months to recoup our closing costs ($700 closing costs / $160 monthly savings = 4.375 months)! That’s $160 a month I can now spend on bubble tea! I kid, I’m only allocating half to boba.

3. Build up emergency savings – $41,400

In my last post, I stated wanting to increase my monthly cash savings in 2021 by 33%. But now with having no debt, I’ve actually increased it by 100%. Yes, I’ve doubled my monthly savings. Historically I’ve never liked having a heavy cash position. I much prefer putting my money to work in an investment account than keep it in liquid savings. However, COVID altered my attitude towards that. With the volatility of last year, Tommy and I decided a 6 month emergency savings wasn’t enough to afford us peace of mind. We mutually agreed we were more comfortable with having 12 months of cash on hand.

One thing worth noting is that we include our spending money when calculating our Emergency Savings amount. Our monthly expenses are relatively low at $1,450 (this includes mortgage, utilities, subscriptions, insurance, etc). Outside of fixed expenses, we spend a combined amount of ~$2,000 a month on any and every thing. So $3,450 a month x 12 months = $41,400. This is the amount of cash we want to have on hand in the unlikely event that both of us lost our jobs. This is obviously a very conservative number, considering it’s unlikely we would ever both lose our jobs. And if we ever did we would certainly never continue spending $2,000 a month (it would probably be less than half of that). Nonetheless, this amount affords us peace of mind which is invaluable to us. At the rate we’re both saving we should meet this by the end of the year.

4. Max out Roth IRA – $6,000

Same thing, different year. If you’re new here and still haven’t opened an Roth IRA (assuming you qualify), seriously DM me. Let’s get you on that.

5. Max out HSA contribution – $3,600

One of the many amazing benefits of my employer is that they pay 100% of employee medical premiums. Due to Tommy’s unemployment, however, I’ve had to pay $300/mo to cover his medical benefits for the last several months. Starting March 1st he’ll be eligible for benefits through his new employer so I’ll no longer have to pay that so you know what that means? 🤑🤑🤑

Since I’ll be freeing up an extra $300/month of tax-free dollars, I’ve decided to redirect it to my HSA. I’ve always contributed a fixed amount to my HSA every month but have never gone up to the full limit and I’m pretty salty about admitting that. As a unique investment vehicle with triple tax advantages, it should really be higher on your priority list to max out than an IRA or a 401(k) IMO. Nonetheless, I’m hoping this year will start a career-long tradition!

6. Increase 401(k) contribution by 4%

My 401(k) contributions have stagnated at 8% for the last few years while I was paying off my school loans. Now that I’ve paid those off I plan to increase it to 12%. Currently my employer also matches up to 4%, which is a nice added bonus to my retirement account.

7. Limit spending to $1,200 a month

For the last few years, my monthly spending has sat comfortably around $800 (this is inclusive of all my spending: gas, food, entertainment, travel, health, self care, gifts, etc). Because of this, I’ve been using that as my benchmark for monthly spending in my budget. I increased this amount to $1,200 in 2021 for a few reasons:

• I did the math to make sure increasing my spending on a monthly basis wouldn’t compromise any of my savings/retirement goals
• My income is much higher than in previous years (27% more than last year alone) so I can justify a slight lifestyle inflation
• See Goal #3 where I highlight how my monthly savings rate has doubled since last year
• I currently have no debt outside my mortgage
• I want to allow myself to be more generous to both myself and others. Those closest to me know how much restraint I have when it comes to EVER spending money on anything for myself. I’ve struggled with a mindset that encourages deprivation and want to spur less of that.

I’m realizing my attitude towards money has shifted as I’ve become more comfortable in my income and career. Having the freedom, now, to be more generous toward loved ones is honestly SO FUCKING FULFILLING. Just ask my little sister. She’s been reaping the benefits of free dinners for months now 😑 (Kelly, if you’re reading this I changed my front door code). I still consider myself a frugal person and financial stability will always be a top priority. So as long as I maintain those priorities, I’m going to allow my perspective on my finances to grow and change.

8. Make $200/month in side hustles

In the past I’ve found ways to make passive income by buying and selling furniture, freelancing, and occasionally doing sponsored posts on social media. I haven’t decided what efforts I’ll put forth in side hustling in 2021 but it will likely be a collective of all of those.

9. Increase donations

Piggy backing off my earlier soap box – I definitely want to be more generous and charitable this year. I’ve already been able to fulfill some of this goal by pledging to a few charities and campaigns who have really inspiring missions, but there’s still so much more I can do and so many more people I want to help. Feel free to share some ways you guys are being charitable this year as recommendations!

What are your goals for 2021?