Financial Goals – Year Long
Here is my second post in my Financial Goals series. If you missed them earlier, please see my Long, Long Term Financial Goals. I’m going a little out of order here, but I wanted to get my year long goal posted sometime before the year is over.
As this is my first year attempting to be financially responsible, I have no idea how these are going to play out. Nevertheless, here are my goals for 2007.
- Have $20,000 In Savings – I started the year with just under $14,000 in my account, and as of today, I’m just over $15,000. With 10 months left in the year, I’ll have to save an average of $500 per month. Part of this money will eventually be used as a down payment on a house, but in the mean time, it’s a great emergency fund. In a crisis, $20,000 could last me at least 6 months.
- Put $2,000 into a ROTH IRA – At my age, I can put $4,000 a year into IRA accounts, but looking at my salary and other goals, I don’t think I can swing it. So far I’ve contributed $0. With 10 months left in the year, it’s only a $200 a month commitment. Seems like a perfect opportunity to set up an automatic savings plan so I don’t even have to think about it.
- Get Car Loan Below $5,000 – Ideally, I’d like to pay if off completely, but that’s probably not going to happen. I’m 23 months into a 60 month loan, and I’ve paid off half the principle. I’m a little bit ahead, but there’s still about $10,000 to go. Most likely, I’ll use some of my 0% balance transfer money to pay off a big chunk early, then make my usual car payments to myself to pay back to balance transfer. Still on the fence about that move, but either way, I’m looking at $500 a month towards this goal.
- Make $2,000 in Extra Income – Who doesn’t like more income? There’s plenty of opportunities out there, I just have to go out and find them. This will come from a combination of side jobs, credit card arbitrage, selling stuff, blogging, recycling, etc.
There you have it. 4 simple goals for the year. It’s not going to be easy, but with a bit of discipline, I think I can do it. I’ll keep you updated as the year goes on.
Posted on Wednesday, March 7, 2007 @ 7:32 am by BudgetFreak
Filed Under: Goals , Personal
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on 07 Mar 2007 at 10:44 pm 1.helpful said …
Why not up your ROTH IRA contribution to $4000 instead of bumping your savings to $20,000? See reasons below:
1) Because you contribute after-tax dollars, you can always withdraw your full contributed dollars without any penalty or tax liability.
2) You can also withdraw up to $10,000 in EARNINGS to purchase a home. Up to $10,000 in earnings withdrawals are considered qualified if the money is used to acquire a principal residence. This house must be acquired by the IRA owner, their spouse, or their lineal ancestors and descendants. The owner or qualified relative who receives the “first time homeowner” distribution must not have owned a home in the previous 24 months.
3) You may not always be able to make ROTH contributions so you should make them now while you still can. As your earning power increases, ROTH eligibility fades and eventually disappear. While it may seem a long way off, you will eventually earn more than $50k a year. In a few short years, you may exceed the limits. See below:
Single filers: Up to $99,000 (to qualify for a full contribution); $99,000-$114,000 (to be eligible for a partial contribution)
Joint filers: Up to $156,000 (to qualify for a full contribution); $156,000-$166,000 (to be eligible for a partial contribution)
on 08 Mar 2007 at 7:45 am 2.BudgetFreak said …
Wow. There’s some food for thought. I didn’t know you could withdraw contributions without penalty. I had wanted the money in savings so it was accessible if I needed it, but if I could make withdrawals, there’s no reason it shouldn’t be in a ROTH IRA. Let me ponder this.
Thanks for the info!
on 15 Mar 2007 at 6:41 am 3.Opened a Vanguard ROTH IRA » Budget Freak said …
[...] employers. I’d been researching ROTH IRA’s for awhile now, and finally, after some helpful advice, I decided not to wait any longer. My biggest concern was that the money would be locked up until I [...]