Every year, I have shared my family's Financial Goals, then updated them each quarter, both to hold us accountable and also to inspire you to write out and achieve your own goals.
With our big accomplishment last year (paying off all debt except our mortgage), we're focusing our 2014 Financial Goals on savings–both emergency and retirement. Since we were socking away so much towards debt all last year (over 40% of my husband's take-home pay), we are optimistic that we can achieve all of this year's goals. Just keep that in mind the next time Murphy hits my house! Because you know it's coming…
1) Create an emergency fund with 6 months' worth of expenses by March 31st.
Between the scrambling over no-cash-flow we did after our debt payoff and the government shutdown last October, this emergency fund is first-and-foremost in our minds. It's very hard to set aside this much money and not be working towards our other goals yet, but we know how important it is. Since there's a third paycheck in January, it can go directly to this goal, and our only known obstacle right now is a huge tax bill (we didn't change our withholdings and with the debt paid off, we don't have as many deductions–oops).
2) Max out husband's retirement contribution at work (ASAP) and open an IRA for me (by December).
While we know that putting money into husband's retirement account at work keeps us from accomplishing goal #1 as quickly, we have been losing out on the matching funds that it offers, so we went ahead and signed him up to start with the first paycheck of the year. Since opening an IRA for me is less time-dependent (we can deposit the maximum of $5,500/yr anytime between now and March of 2015 for it to count for 2014), we'll start that later in the year and just work our way up to that maximum.
We did make the decision NOT to put any money into a 2013 IRA for me (which can be done up until Tax Day this April), because we just don't have the cash for it.
3) Work with a lawyer to get our will, trust and guardianship done by April 1st.
We did our will and guardianship right after we had the twins, but now we'd like to set up a trust for our children per the suggestions in this post about writing a will. Now that our kids are older, we have a lot of thoughts about how we'd prefer they use our money, should we not be here during that time of their lives. If you haven't done a will yet, I strongly recommend you make it a 2014 goal!
4) Stick to our monthly budget to stay debt-free while covering expenses like taxes, a new couch, and trips.
Now that we're debt-free, it has been challenging getting used to it. We've both been fighting the urge to splurge, instead sitting down frequently to talk about our monthly expenses and how we're using the money that went towards debt this year in a different way. Unfortunately, we're still not “seeing” it; the money now goes to savings instead of to our wallets, so it's still no fun. However, having those large debts gone makes a difference to us psychologically, and they let us move ahead with our family goals.
Since I budget our months on two bi-weekly paychecks, the two “extra” checks each year are truly extra–January's will go towards the emergency fund while August's will be for a family vacation (barring major house repairs or other disaster, obviously). My husband and I are attending a wedding in California in September, too, so we have some unusual things happening this year to plan for financially. And we never did get a new couch last year; our 12-year-old hunk-o-junk is still bursting springs and smells pretty funky. Not sure what month that will happen, but it does need to happen. It's goals like the couch that make skipping meals out and entertainment in the short term worth it in the long run.
Original image by Carly Jane1 at Flickr