It’s time for a 2017 quarterly update! At the end of 2016, I laid out my financial goals for this year. Here’s where I currently stand with my goals:
Pay off all my student debt. As of January 1st, I had about $4,000 saved up towards the last $10,000 of debt. I’m now at $1,300 (after just making a payment last week). With a target date of July 1st to be completely paid off, my savings account should actually be at $1,600 right now, which means I’m just a few hundred dollars shy of being on track with my target date.
Max out 401K and IRA contributions. Like the goal above, this is also a little behind right now. While I am maxing out my 401K, I had to cut back on my savings rate for my IRA — I’ve only saved up $600 so far toward this goal. I should be at $1,375. My plan is to redirect much of my student debt savings towards this goal after this summer, and I should be able to catch my way up to $5,500 be the end of the year without a problem.
Have $10,000 in my personal investment account. Because I’m putting away $100 a month into this account, it’s hardly grown since December. My account hasn’t even broken $4,000. The money I don’t reallocate from my student debt repayment into my IRA funding will go toward investments. After that, I tend to take 100% of my post-tax increase from my recent salary increase into this account. Maybe I’ll get it up to $10,000 by the end of the year.
Reduce my average monthly living expenses to $1,700. Well, shit. It’s a good thing I revisited my goals because I completely forgot about this. Yes, I’m constantly trying to reduce my expenses, but I’ve been putting all my energy into growing my income rather than significantly cutting down on my expenses. My average monthly expenses for the first quarter of the year? $1,986. I can definitely do better.
Build an actual emergency fund. Until my debt is paid off, this is a low-priority goal. I currently have a little over $1,000 in my emergency fund, which covers surprise expenses. I suspect that this part of my update will get more exciting towards the end of the year.
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Including retirement, I have an investment/savings/debt repayment total goal for this year of $41,500, which is more than half my take-home income. For the first three months of the year, I’ve put away $8,300. I’m 20% behind schedule! A difference of $2,074 is a lot to make up, but doable, so long as I up my game the rest of the year. This will mostly require hitting my average monthly expenses goal of $1,700.
Looking at these numbers, I fear that I may have been a little too aggressive with my goals. Hopefully, with my new increase in salary, the small monthly boost I get will help me meet them, but I don’t think I’ll surpass $41,500 by the end of the year. That said, it would be silly of me to be disappointed with what I’ve accomplished so far in three months. Eight thousand dollars! That’s more money than I’ve put away in any other three-month period in my life. The majority of that may be via my 401K, but that doesn’t matter. It’s incredibly rewarding to see that money grow in my accounts. I often get frustrated by how slowly I save, but that frustration is definitely exacerbated by how spread out all my funds are. This update is refreshing in that I actually have a solid number to grasp on to in terms of my progress.
It’s hard to believe that this year is already a quarter of the way through. Hopefully, you’re more on track with your goals than I am at this point. There’ll be another update in roughly three months!
Comments
Great progress! It’s awesome to see how close you are to hitting some of your goals. I think it’s a mistake, though, to prioritize paying off debt before building an emergency fund, even if you’re closing in on maxing out your retirement contributions and paying off all your student loans. In a dire situation, I’d much rather be able to pay for food, rent, or medical expenses than take comfort in how little I owe creditors. Both are important, but one is far more pressing than the other.
$1,000 is a slim buffer, even if it is more than most people have tucked away for unexpected situations. Something I’ve often heard, and which makes sense to me, is that one should always strive to have three to six months of expenditures saved up. Until the U.S. has stronger social safety nets it’s mostly up to each of us to prepare for disasters, and it’s a responsibility that is underestimated in this post.
https://www.nerdwallet.com/blog/banking/life-build-emergency-fund/
http://twocents.lifehacker.com/decide-how-big-your-emergency-fund-should-be-with-the-3-1771069246
I still think you’re doing a wonderful job with your goals! It’s easy to be too hard on yourself, but it’s important to note that you’re acting on the goals and reaching for them. 🙂 And great job with that repayment/investing/savings number!!! Nearly half of your take-home pay is kickass. 🙂
Thanks, I appreciate the support! Writing about it definitely makes me feel better about how much I’m putting away. Otherwise, it just constantly feels like not enough.
Can’t wait until you reach your goal! 42k is Hulk-level savings, especially in NYC, so I think you should feel OK about dialing it back a little. And yes, seeing net worth increases makes my day. I literally check Mint every.single.day.
Maybe you can combine your EF and the personal investment account into one bucket? Or maybe I like to live dangerously…
Haha yes, I guess I can technically count my investments and EF as one, which would give me 3-4 months buffer. Eventually though, I’d like my EF to have 6 months stand alone that I can draw from, without needing to touch my investments.
high five! You’re killing it! Have you thought about putting the after tax investments through your 401k and then doing an in-service roll over to a ROTH IRA rather than directly to your personal investing account? It locks the principle up for 5 years, but the funds will grow indefinitely tax-free! It’s the mega-backdoor strategy the MADFIentist is always talking about. I’m planning to test it out the second half of this year.
I think you’re doing awesome, Jane. It’s really exciting to see another blogger so close to hitting some of their financial goals. I think while your goals are ambitious, your numbers are awesome so far.
Gonna post a vid of you doing your debt free scream or nah?
A debt free scream? I totally forgot that was a thing! I’ve never thought of my debt as something to be sad or frustrated over (more like, it’s just a fact of life), so I didn’t considered doing one. I may reconsider in a few months, when I actually finish…
Great job! Setting challenging goals is the way to go. If you always achieve all of your goals, you aren’t trying hard enough.
You could treat your investment goals like debt: use the snowball method. Put a certain amount towards it per month, and “everything else” goes towards the easiest goal to achieve. When you got that, use all that extra money and throw it at the next easiest goal. I wonder how that would actually work.
Oooo, I like that idea! I think that’s the general concept behind saving up an emergency fund first, but I like the idea of a savings snowball.