Done To Zen

I didn’t start 2008 with any clear goals in mind, so it’s difficult to judge how well I did over the year. I want to have a focused, stress-free 2009, so I’ve spent most of December trying to figure out my goals for the coming year. Being a believer of positive peer-pressure, I’m posting my financial goals here:

Emergency Fund

The last couple of months of 2008 brought my emergency fund to its knees — I don’t even have one month of reserves anymore. I’m going to bring the balance up to $10,000.

Retirement

I’m going to fully-fund my traditional 401K ($16,500) and my Roth IRA account ($5,000). I’m also going to fund as much of a SEP IRA as possible.

Investment

I want to invest about $3,000 into ESPP. It would be nice if I could invest more, but that might not be possible in light of my other goals — unless I meet “side income” goal, in which case this I will be able to take full advantage of ESPP.

Debt

I have $7,370 on a 0% APR card that signifies the only “student loans” I’ve used to finance my MBA. I want to get rid of the debt in six months.

Sanity

To ensure my sanity (now that I have so many different bills to pay), I’m going to setup automatic payments for all recurring expenses.

Side Income

Goal is to earn $24,000 in income from side jobs. Every penny of this money will go to either a SEP IRA account or an index fund.

529 Plans

My goal is to dedicate at least $1,200 to three plans (total). If possible, I want to fund one of them with another $2,400.

Charity

My company matches the first X amount of money I donate to a non-profit org. So my goal is to donate at least that much to charity by year-end. If side income goal is met, I want to donate at least double the minimum.

Fun

I will spend $600 on fun experiences; this means that the $600 cannot become a recurring bill, cannot be used to purchase tangible products, cannot be used for food/restaurant/grocery purchases, and cannot be used for purchase of gifts.

Net Worth

I ended 2008 with a net worth of $40,000. After doing some proof-of-concept calculations, I think an attainable net worth goal is $115,000 $85,000. This is almost three times more than twice my net worth in 2008, and it partly depends on what I manage to earn and save in side income, but even without it, I should be able to come in quite close. (Screwed up with the calculations)

Expectations

Of all the goals I have set out for 2009, the side income goal is going to be the hardest. I’m afraid that I’ll fail miserably at this goal, which is probably not a very good way of going into it. I’m determined to make it, however, so we’ll so how it goes.

So, what are your goals for 2009?

We’re three days into November, so it’s time to look at this month’s goals.

1. Do not spend a single dime on credit card other than monthly bills. There are recurring bills of $207 and around $2000 for tuition, but I don’t want to use my credit card for anything else. This means no restaurants, impulse buys at the grocery store, movies, nothing. I’ve been a very bad girl over the last two weeks of October, buying (admittedly inexpensive, i.e., < $5) things as though I had $50K burning a hole in my pocket. So now it’s time to yo-yo to the other extreme.

2. Finish freelancing project no. 1. I got a freelancing project for this month that will take between 10 and 30 hours and should net me a couple of hundred dollars. I have to make a decision on where this money will go: emergency fund or Roth IRA?

3. Finish two freelancing project no. 2. This one will get me a couple of hundred dollars for a couple (5 - 8) of hours of work. But deadline’s kind of flimsy, so I might end up procrastinating.

4. Make a real budget. I tried to stick to a budget for the past two months, but it didn’t go too well. I think the reason for this is that I made a budget for how I wish I would spend, not how I actually spend money. I’ll try to create a more realistic budget for this month.

5. Do not look at 401K balance for the rest of the month. I log into my retirement accounts a couple of times a day. Definitely obsessing. Let’s see if I can do without it for November (this will probably be the hardest of all the goals I made for myself for this month).

6. Write 1000 words. Every day. On anything.

In a random afterword, don’t forget to vote tomorrow. You’ll have to live with Obama/McCain for the next four years, so take ten minutes to vote for the person you like the most (or hate the least).

1. Reduce a recurring bill by $7ish dollars. I have been trying for three (count that: three!) months to get my instructor to correct my contract, but he has a new excuse every single day for why he didn’t get done. He supposedly will try to get it done this week, but I’m not very hopeful that he’ll do it. Even if he does, I’m worried that he’s going to forget to take into account the 3 months I already paid.

2. Keep to budget for miscellaneous/fun spending ($123/$25). I was doing so well until 3 days ago, and then everything just went kaputz. Of the $123, $33 was unavoidable (I forgot to include a purchase that I should have seen coming), but everything else is the result of utterly indulgent moments of irresponsibility. I’ll try to see if I can be better over the next 13 days.

3. Contribute $1000 - $2000 to Roth IRA account ($898). How much I contribute depends on how the market is doing. I’m not trying to time the market or anything (too much). As the amount is coming from my emergency fund, I want to make sure that the benefit of buying stocks at a bargain outweighs the lost liquidity/additional risk.

4. Open a 529 Plan to take advantage of the bear market ($50/$50). I opened a 529 Plan for a family member to take advantage of the bear market. I was kind of amused (jealous?) to see that of everything I purchased so far, I managed to buy shares at the lowest (so far) in this account.

5. Research efficient lighting. Not done. I’ve been thinking for a long time that the lights in the kitchen need replacing, not because they aren’t working but because they always seemed to be turned on. There’s also the light in the “hallway” leading to the front entrance that may also require more efficient lighting. Finally, a light blew out in the basement landing, but I’m wondering whether it’s something I can get by without replacing.

6. Apply for tuition reimbursement for the current class. Not done. It’s something of a pain because I have to ask my manager for the form for every class after I pay for it, because I don’t have access to where it’s stored on our Intranet for whatever reason.

7. Identify November’s goals. Not done.

8. Identify November’s 30-day trial. Not done.

Something I noticed over the past couple of months is that I’m getting more and more frustrated with my financial life despite the fact that I’m improving my net worth every month. Maybe I just remember bad feelings more easily than good feelings. At any rate, the lack of concrete goals left me with no clear understanding of how a month went. Net worth went up, but was it above or below expectations?

So, from this month on, I plan on creating goals at the start of each month, so I know at any point in time how I’m doing.

The goals for September:

In other areas in my life, I try to give myself 1 really hard, 1 medium, and 2 easy goals, so I’m going to go with that here, too. Can you guess which of the stated goals are going to be hard for me?

1. No purchasing anything other than fixed expenses. The reason for this is very simple. About a week ago, I once again upped my 401K contribution. This resulted in an extremely tight budget with maybe $10 left for whatever spending. Of course, I would rather that I put the $10 towards a better use. There really is no reason why I should be eating out every day or buying books for the heck of it.

2. Meet emergency fund goals. I have a fixed savings amount that goes to my emergency fund every month. I want to meet it despite increasing 401K goals. Note: if this proves to be impossible, then I’m going to lower my 401K contribution to the previous levels. It’s good to have retirement savings, but not at the expense of liquidity and financial security, IMHO.

3. Purchase bonds. I finally turned in the confirmation application for my TreasuryDirect account, so I should be able to start buying Is it a better idea to save the (insignificant) amount into emergency fund? Maybe, but I want to commemorate my successful battle against procrastination by actually buying something.

4. Maintain my 401K contribution limit for at least 4 pay periods. From past experience, I know that I often think that it’s absolutely impossible until I stick with it for 2 months, at which point it becomes habitual. So I’m going to wait at least until October 31 to make any changes. We’ll see whether I’m right: maybe I just got use to wasting money and require time to adjust.

Stretch Goals for September:

1. Earn income from freelancing: any amount I earn is obviously going to be a plus, but I have a specific dollar amount in mind. To encourage myself to meet the goal, I’m going to give myself 10% of the money to spend as I see wish (the rest is going to go to savings, naturally).

Difficulty Ratings

Ratings are from 1 to 10, with 1 being super-easy and 10 being super-hard.

Note: a stretch goal isn’t automatically a 11 and normal goals can sometimes be 11s.

Stretch Goal #1: freelancing: 11

Goal #1: No unexpected purchases: 10
Goal #4: 401K: 5
Goal #2: Emergency fund: 4
Goal #3: Bonds: 1

There are no 4.5ers this time, but that’s OK. I feel that my hall of famer will more than make up for the loss.

Final Notes

1. I finally have enough in my emergency fund that I’m making more than just cents over the course of the month in interest. What to do with this??? Should I include it in the budget or simply let it accumulate in the e-fund? At this point, the money is small enough that it doesn’t make any sense to expend the effort, I think, so I’ll leave it to accumulate for now.

2. My AC appears to be broken. Though I know nothing about it, it looks like the engine is running fine, but no air is coming out. My home is a fairly new construction, so I can’t imagine that the AC broke down, but I’m wondering whether maybe it did. I’ll have to deal with that, but a broken AC obivously throws a monkeywrench into financial plans.

3. I’m expecting a small payment (around $100) but I don’t know whether I’ll get it in a lumpsum later on or broken up into pieces throughout the rest of the year. Anyway, what should I do with this money? Put it in e-fund or buy bonds or pre-pay mortgage?

Wow, where did all the time go? It feels like July 4th just went by and all of a sudden, it’s July 15th. Anyway, since we’re halfway through July, it’s time for me to look at how I fared so far and what, if any, adjustments to course I should make over the next 15 days.

Finances - what I did right

1. I paid off July’s gas bill in June and decided to save the amount instead of wasting it on something or another.
2. I haven’t used my credit card for an entire 15 days, which is awesome.
3. I’ve successfully completed my 30 day trial of not eating out, and I plan to continue over the rest of the year, but maybe not so stringently. Maybe I will allow myself to eat out a couple of days a month; I don’t know yet.
4. I saved the full amount for my emergency fund.
5. Though I really wanted to work with a personal trainer, I forewent one as he was so expensive. For a while there, I thought I would be going for it despite the cost, but I fortunately decided otherwise soon thereafter.
6. I upped my 401K to 10% of my salary in June, and despite (perceived?) financial hardship, I kept it there through today; I don’t plan on changing it over the course of the year, but who knows? Thy mind is a very fickle thing.
7. Paid off all bills without procrastinating. I rarely ever pay bills late (and only when we have the roll-over functionality) but I for whatever reason keep waiting until the last minute to pay them.

Finances - what I did wrong

1. Haven’t been accurately tracking all my cash spendings. I know I spent around $60 on groceries, so far, but it’s a guesstimate.

Finances - what went right

1. I learned that I will be getting a bonus. Kill me if I touch a penny.
2. I landed an unexpected freelancing job that will earn me a couple of hundred dollars.
3. I landed another unexpected freelancing job that will also earn me a couple of hundred dollars.

Finances - what went wrong

1. There is an expense coming around December (where I do either an atrocious one-time pay or more reasonable monthly payments) that I knew about, but they are offering a pretty significant discount if I do it right now. But it means I have to cough up between five hundred and a couple of thousand dollars right now, depending on how I want to do it. Just so happens I have just enough in my emergency fund to cover this expense, but it will kill me to have to use it. I’m still struggling with what to do.
2. I really wanted to work with a personal trainer but his fees ended up being way too high and so I had to not do it and now I’m feeling bad.

Update on trials

I successfully finished my “stop eating out” trial, like I mentioned before. I also, and I continue to wake up at 4AM every day, though there was this one day when I didn’t because my alarm decided to not work.

I also did an unofficial trial over June that I haven’t listed anywhere (I think?): I stopped reading news; mainly, I stopped reading any and all political blogs that I was subscribed to. I used to be something of a political junkie, but I stopped depressing myself every day with, well, depressing news (it is far harder to find something positive on political blogs than it is to find even in news, if you can believe that).

Though I wasn’t really thinking about it, I also fell into the habit of not reading any “real” news (yeah, I go to digg and read some technology/finance stories occasionally). I realized it after maybe 10 days and from then on stayed away from newspapers consciously.

Another habit I wanted to try unofficially — which means that it’s OK if I slip up — is stop purchasing ice cream at Cold Stone. Having come upon it accidentally, I’ve been going to it pretty regularly the last two months or so. Yesterday marked the end of this trial, and I can’t say that it was particularly hard. Not getting to use my credit card for 15 of those 30 days might have helped. ;-)

On July 10, I’ve also quietly celebrated my 6 months of chocolate fasting with a big chocolate cake. Just kidding. I actually didn’t celebrate it at all — I didn’t even realize it until yesterday. I do think this is the longest I’ve ever went without eating chocolate. I still get the urges, especially when I’m blind-sided by pictures of and/or actual chocolate manifestations, but it’s hard to give up after so many days of staying strong. :-) My biggest fear is that I will accidentally eat something that has chocolate in it.

You might have remembered that I once upon a time (well, 15 days ago) informed you that I would be running/writing in the morning. This failed to happen. I haven’t written a single thing this month (on my book) and I did run a couple of times, but it was in the evening and not in the morning. This isn’t too great, but that’s life sometimes, and I’m OK with pushing them back to August. We shall see.

So: I completed 8 trials so far this year (chocolate and vending machine fastings, making my bed every day/morning, karate, waking up at 4AM, restaurant fasting, political blogs fasting, news fasting).

Ratings

Objectively-speaking: 9 out of 10
Emotionally-speaking: 4 out of 10