I can hardly believe it’s already the first week of 2022! As we enter a new year, I always like to spend some time reflecting back on the last year and reviewing the goals I had set out to see how much progress was made. I had laid out some pretty ambitious money goals. Some goals we met, and others we fell a little short. But overall, we were able to save and invest more in 2021, than we had in any previous year.
I’ll call that a WIN!
Money Goals
Save and invest $70,000.
As I mentioned several times, this was definitely a stretch goal. I had hoped that we would be able to meet it. But due to some unexpected costs (medical, dental and car repairs) we weren’t able to fully meet this goal.
While a little disappointed, I am trying to stick with the mantra, “progress, not perfection.” I will still celebrate that we were able to meet 80% of that goal. Five years ago, I had a ton of student loan debt, and was barely saving anything. So 80% is great.
Progress: Reached 80% of this goal having saved/invested about $56,000.
Here is where that money was directed to:
Max out 401(k).
I had 12% automatically taken out of each paycheck. Plus my employer contributed 7.5% of my salary in one payment during the year so this equated to contributing 19.5% of my salary to this account until I maxed it out.
My Contributions: $10,184
Employer Contributions: $9,612
Total: $19,796
Goal: $19,500
Progress: Goal exceeded by nearly $300!
Max out both of our Roth IRAs.
The maximum amount a person can contribute to their Roth account is $6,000 per year. For more info about Roth accounts, see my post, A Powerful Tool to Reach Financial Independence: The Roth IRA. We maxed out both of our accounts early on in the year so once we fill those buckets we just sit and watch them grow.
Total YTD: $12,000
Goal: $12,000
Progress: Goal met!
Open up investment account for our son and contribute child tax credit.
At first, we were just sticking this money into our HYSA with Ally until I figured out the best option for where to put this money. I looked into a few different options, including a regular taxable brokerage, 529 savings plan and UGMA/UTMA accounts. I decided to open up a separate taxable brokerage account in our name and invest that money into low cost index funds for Henry. It offers the most flexibility and I can give him this money whenever I decide to.
I personally don’t love the 529s as I have no idea if he will want to go to college in the future or what college tuition will even look like. But many people love the 529 plans and they have some great tax benefits.
I also hesitated on the UGMA/UTMA account because once the child turns 18 or 21, all of the money goes into the child’s name. To be honest, that makes me a tad nervous. So for now, I put it into a taxable brokerage account through Vanguard. Perhaps down the line, I’ll open up a 529 and also a UGMA/UTMA account.
We are learning as we go!
Goal: invest $1,200 into an account for Henry
Progress: Goal met! Invested $1,200 received from the child tax credit into low cost index funds (VTI & QQQ) in our Vanguard taxable brokerage account.
Max out HSA.
An HSA is the holy grail of investment accounts for FIRE. It You can only open up this type of savings account if you have a high-deductible health plan (HDHP). If you are unsure about whether you have that, check with your benefits team at your place of work. The reason I love it is because it offers you a triple-tax benefit. This means you can (1) contribute to them on a pretax or tax-deductible basis, (2) your savings grow free of taxes over time and (3) you can also make tax-free withdrawals to cover qualified medical expenses.
Goal: Contribute $3,600 to HSA. We could actually contribute a total of $7,200 for family coverage but for this year, I wanted to focus on just maxing out the individual contribution to start.
Progress: So far I have contributed $1,400 to this account. I have until April 2022, to finish filling this bucket which I plan to do!
Build up Emergency Fund.
Our emergency fund had dwindled over the past year given a higher tax bill, and a few unexpected costs so we worked to build it back up to have three months of expenses saved. A lot of people suggest having 6-9 months of expenses socked away in an emergency fund. I am more comfortable having 3 months saved because we have our Roth IRAs that also serve as back-up in case we needed to access more money immediately.
Goal: Bring it back up to $20,000
Progress: 75% of this goal met! We built it back up to just under $15,000.
Contribute to taxable brokerage account.
We are working on contributing as much money as we can into our taxable brokerage. My husband manages this account and is a much more hands-on and active trader.
Goal: Grow our account to reach $25k (with both contributions and gains)
Progress: Goal met!
Purchase, rehab and flip property.
This was a goal we had talked about earlier in the year. We took the steps to get pre-approval but then ultimately decided to hold off on this project as we had some bigger expenses comes up this year and didn’t want to leave ourselves in a stressful situation as we didn’t have enough capital saved to do this. This is still on our radar but we’ll have to hold off at least for this year and explore options in the next year or two.
Progress: Put this goal on hold for 2021.
Conclusion
So there you have it. It definitely was not perfect. But that’s not what I’m striving for. Instead, I am trying to work on just making progress! As you can see, I met some of the goals I set out, and others fell a little short. I am okay with that.
I am looking forward to working on putting together my 2022 goals and will be sharing those soon. I got a little bit of a late start this year, as we had a lot of health and sickness challenges in December. But hey, better late than never!
I’d love to hear from you! How did your goals for 2021 go?
