I thought I had goals. But it turns out, I have mostly hopes and dreams when it comes to personal finance. Paying off our mortgage in the next 10 years isn’t a good goal. Staying out of debt isn’t a good goal. Increasing my net worth isn’t a good goal. They’re undoubtedly important aspirations, but they’re not measurable. They’re also quite vague.
For someone as fond of spreadsheets as I am–I love them, I do, I do, I do–you’d think that I’d be all about SMART goals. The more specific the goals, the more observable the metrics. Hello, spreadsheets. For too long, I’ve let fears prevent me from setting specific goals. Fear of failing and fear of investing have kept me locked in a holding pattern of saving but not really allowing our money to work for us. So here’s to shaking off the fear and setting some real goals for once and for all.
Debt Pay Off
Last year, I finally fessed up to the fact that we paid not $18,000, but $24,000 towards our debt. That included our six-figure mortgage and Mr. P’s car. Now that we own both cars free and clear, we’re comfortable doubling our mortgage payment every month. Even so, that won’t take us to $24,000. Still, if we came up with $24,000 last year through trimming our budget and side hustling, I’m hoping we can do the same–if not a bit more. So, I’m going to set this debt repayment goal at $24,000 by year’s end.
Investing – Roth IRAs and Beyond
For the past two year’s, we’ve maxed out both of our Roth IRAs. Prior to that, I would put some money in mine…and Mr. P didn’t even know what a Roth was. So, we’ve made progress. I also plan on fully funding both of our Roth IRA’s this year. The catch is I’d like to do this in increments. Because I’m still the type of investor that holds her breath and tries not to pee her pants whenever she logs onto Vanguard, I’ve waited to make the fateful “transfer money” click once a year. This is really stupid. I don’t know how much I’ll be able to part with every month, but I’m determined to part with something. By the next IRA deadline, we’ll have to sock away $11,000. Since that’s over a year from now, I’m going to aim for steady, consistent action in whatever increments we can fund. Since I’m not doing the vague, loosey-goosey thing anymore, let’s say I’d like to have $4,000 put towards these accounts by December.
By my birthday, I’m going to open some type of investment account outside of my Roth IRA and deposit $1,000. I was pretty well set on Betterment or Wealthfront, and I’m still thinking I’ll go that route. However, I did just have a fascinating conversation with my parents about money, and my mom waxed poetic about bonds. Then Vanguard announced this. Coincidence? Yeah. But, still. I have some thinking to do. For simplicity’s sake, the easiest move is probably to set up a small account with a robo-investor. Then, I can either keep adding to it, or I can venture into other possibilities. Of all of my goals, this is the one that I feel least comfortable with. As a result, I’m making myself take action on this goal the soonest. By the end of next month, expect a report on this move of at least $1,000 into an investment account.
So there you have it. One specific goal for debt repayment and two more goals for investing. Hopefully, this is the start of me adopting the practice of setting measurable goals that will move us further along our financial journey.
So Tell Me…What are your goals? How do you track them?