Three quarters of 2015 are now gone, and it’s time to check my goals for this year.
1) Grow my net worth by $10,000 ($21,696 total net worth). Done!
2) List the house. Sold!
3) Pay off the student loan. Done!
4) Invest $3,000 in a retirement account.
5) Earn $500 in “Side Income”. Done!
6) Pay off car loan.
7) Grow my net worth by $10,000 ($31,696 total net worth).
I started 2015 off with 5 goals. It wasn’t long before I was re-evaluating, and adding more goals. I’ve spent a lot of time this year thinking about goals, and what they mean to me. When I started this blog, I didn’t have a real direction of where I was trying to go with my life. I knew that I wanted a better financial future. I also knew that, if I wanted to move forward, setting goals and pushing myself to reach them was necessary. So, I started setting goals at the beginning of each year. It was a great way of keeping myself on track, giving myself something to work towards, and measuring the progress that I was making.
I’ve always seen goals as rigid, inflexible commitments. You either reach the goals you’ve set, or you’re a failure. I’d love to say that’s a motivating way to set goals; After all, who wants to be a failure? But instead of pushing me to reach goals, the fear of failure has always kept me from setting goals to begin with. If you aren’t sure if you can do something, isn’t it better not to try, then try and be labeled a failure? In the end, you still haven’t done it, but without even trying, at least you haven’t also failed.
Despite the possibility of failure, I decided to set goals anyways. But I’ll be honest, some of my goals are a bit arbitrary in nature. Like growing my net worth each year by $10,000. In 2014, that goal was a real struggle for me. In 2015? I made it less than halfway through the year, and am working towards my next $10,000. But what’s the real point in growing my net worth by $10,000? Sure, I’m paying off debt, and growing my investments. But those are goals in and of themselves. Is growing my net worth by $10,000 (or $20,000) a year enough?
A lot has happened this year: I sold my house. I paid off my student loan. I’m a good ways into paying off my car loan. I have a fully funded $5,000 emergency fund. As I make big life changes, what I want out of life starts becoming clearer. Bryan and I have a much better idea of where our future is headed today than we did on January 1st. And as our ideas develop, my goals change. My priorities start shifting as I start to realize what I need to do in order to move towards the life we want.
At the start of this year, saving for retirement seemed like a very important goal. And every personal finance professional would agree that saving for retirement is very, very important. When I’d paid off my student loan, I could have easily put $3,000 into a retirement account, and been done with the goals I’d started off with (#1-5). But somewhere along the way, I realized that having my freedom now was more important than having my freedom somewhere down the road. Paying off my car loan was a way to “buy” some freedom now (or early next year).
I’m still saving for retirement: As of September 30th, I’d put $1,405.88 into my 401k plan. That doesn’t include the money my employer has put into the plan, or any interest/dividends/growth the plan has seen. That puts me 47% towards my goal of $3,000. I won’t make that goal this year, but I’ll still keep socking away money in the plan. I have other priorities for 2015.
Paying off the car loan took priority in the second half of this year. How am I doing? Well, I started the year off owing $18,724. At the end of September, it was down to $11,347. I’m 39% of the way to this goal. Not too shabby, considering I didn’t really start pushing to pay the loan off until June. Will I be able to make it to $0 by December 31st? No. It may be Spring before the loan is finally gone.
In the past, I would have felt like a failure for not being able to make the goal. Now? I’m super excited at how far I’ve come! Every day, I’m a little bit closer to freedom. A little bit closer to being able to design life around what I love. Does switching gears make me a failure? Not at all! Being flexible means that I can take advantage of opportunities as they present themselves. It means that I can continue growing and learning as a person. It means I can take my time figuring out what I want, and what’s important to me. I know more now than I did on December 31st of last year.
What about that second $10,000 net worth goal? Well, I ended September with a net worth of $26,303. That’s $14,607 ahead of the $11,696 I started the year with. I’d love to be further ahead, but my 401k is really taking a beating this year. And, you know what? I’m okay with that. I’m continuing to buy stock every week, which means I’m getting a great deal for the money. The money I have invested in my 401k plan isn’t money for the near future, it’s for someday in the very distant future. I’m not too worried about what it’s doing right now. It’ll be there when I need it. Do I think I’ll still be able to make my goal of $31,696 in net worth by the end of the year? Maybe.
What if I don’t make my goals? Well, nothing. It’s not like there’s some big prize for getting there! I don’t lose anything for trying. Actually, I’ve gained a lot this year. Not just in net worth, but also life experience and personal growth.
It’s been a year of lots of ups and downs. Lots of changes. And lots of possibilities. No matter what comes along, I want to be ready!
- Cindy W.