Financial Goals For 2009

This year – for the first time ever – we met all of our financial goals for the year. This makes us all the more motivated to stretch further in 2009 and see what we can do. Here’s our list:

$5000 into my IRA
$5000 into my husband’s IRA
$5950 into our HSA
$200/month into our car savings account
$300/month into our solar panel savings account
$100/month into our son’s 529 plan
$100/month into our emergency fund
decrease our mortgage principal by $20,000

The first seven things on the list are pretty much just a continuation of what we’ve been doing. We put $5000 into each IRA this year, and put $5800 into our HSA (the IRS increased the limit for 2009, so we will increase the amount we contribute). We have been putting $100/month into our emergency fund for two years, and have been contributing to our solar panel fund, our car savings account, and our son’s 529 since the middle of 2008.

It’s that last item that will be a stretch. I am not sure if we’ll be able to reach that goal, but what’s the point of setting goals if you know that you can get there easily? Having such a large number in our minds will force us to live very frugally next year. And even if we don’t get to $20,000 (I can’t even type it without swallowing hard), we’ll be a lot closer to owning our house by this time next year if we make this a major focus for 2009. Right now our total mortgage balance stands at $154,861. If we live very frugally (which we’re pretty good at), I think we can make a major difference in that number over the next year. We won’t be spending much of anything on things that aren’t on the goal list, but that’s ok – we like it that way.

Last updated by Frugal Babe at December 5, 2008.

http://www.sensetosave.com Kacie

Great goals! I wish you all the best in achieving them.
http://www.grovesfamilyhappenings.blogspot.com/ Kelly

I was just telling my husband the other day how we needed to sit down and have a big financial discussion. We definitely need to lay out some goals for next year, as well as make a budget and – here is the kicker – stick to it. I wish that I could have goals that included so much saving, but in reality, I think our goals need to be more in terms of paying off consumer debt and discerning our wants from needs. Good luck!
http://naturaltwenties.blogspot.com/ Naturally Frugal

What do you think about keeping a small mortgage on your home as a line of credit? I’ve read a little bit about not paying off your mortgage completely, but I’m not sure about the reasoning and wanted to know what you thought.
Great job on reaching the goals this year!
FrugalBabe

@Kacie: Thanks!
@Kelly: Set whatever goals work for you. As recently as 2004 we were not saving anything at all – everything we earned was going towards debt repayment. We racked up about $40,000 in debt during the first couple years we had our own business, and there were some very lean years after that while we paid back all our debt. For about a year, we didn’t even put anything in our retirement accounts. Then we started with baby steps, and began putting $100/month into our IRAs. It was a long slow process to get to where we are now, with our only debt being our mortgage (we paid off the last of our non-mortgage debt in the summer of 2007). Now that the mortgage is all we have left, and especially since we’ve chosen to stay in our “starter” house with a relatively low mortgage payment, we’re finally able to focus on growing the savings that we had to neglect during the years we were paying off debt. I do think that writing down specific goals helps add a sense of focus. Good luck!
@Naturally Frugal: We have two mortgages. We have a fixed rate 30 year mortgage for most of it, but we also had to get a second mortgage when we bought our house. It’s a home equity line of credit, and has an adjustable rate. We had planned to start paying back the HELOC as quickly as possible, but with the state of the economy right now, the interest rate on our HELOC is actually lower than our primary mortgage. So our focus is on the primary mortgage for the time being. Our plan is to work at paying the HELOC down nearly all of the way and then let it sit there as a back up emergency fund, until we have our real emergency fund built up to a significant level (this will probably take several years).
http://www.movetoportugal.blogspot.com Laura @ move to portugal

Excellent achievements especially as you’ve kept it going all year.
We need to concentrate on going the whole 12 months in 2009 as the last couple of months all we seem to have done is spend, spend, spend
Well done, inspiring
Bill Stevens

You have done incredible for your age.

Have you considered something like a normal investment account called “Son’s Investment Account”, instead of the 529 just in case your child doesn’t go to college and wants to open up a business instead? What would be the ramifications if he doesn’t go to college after all those years of contributing to a 529?
FrugalBabe

@Bill Stevens: That’s a good point, and one that we did briefly consider before we opened his account. But we do get a state tax break for having a 529, and I honestly cannot imagine a child raised in our house not going to college or at least some sort of higher education/training program (529s don’t just have to be used at traditional 4 year colleges). My siblings and I were all valedictorians, and all have college degrees. My husband’s parents and sisters all have masters degrees and are or were teachers in the public school system. My husband’s focus since he was a little boy was to open a business (and we would encourage our son to do the same if he wanted), but before he did that he went to college and got a degree in business with minors in marketing and finance. Education is a top priority in our house. We know that our son isn’t going to grow up to be a carbon copy of us (nor would we want that), but we hope that we’ll be able to pass on the most basic of our values to him. And the importance of education is one of those values.
We don’t plan to completely pay for college for him. But we want to be able to provide some of the funds needed, and saving a small amount each month seems to be the most painless way to go about it.
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http://dave-lucas.blogspot.com Dave Lucas

I don’t know much about you but it seems like you folks have plenty of money. Anyone know of a blog directed toward the working poor? Somebody making / surviving on $30K a year?
Kriswithmany

Great job! The nice thing about paying off a mortgage – as time goes on, you’re paying less in interest, so it’s easier to pay off more principal.
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Financial Goals For 2009

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