Okay, so I know we are more than halfway through the year (we are nearly to September), but hey, better late than never! Can I use the excuse that things have been crazy and I have a wild two-year old who keeps us really busy?
I thought it would be good to do a mid-(ish)-year review to see how we are progressing in terms of our goals. I am definitely someone that needs to put things out into the world to stay accountable so here are the goals I had laid out earlier this year and a quick update on progress made for each.
Money Goals
Save and invest $70,000.
This is definitely a stretch goal but we are making good progress. It basically breaks down to saving about $5,800 per month. This is a pretty big jump from us essentially saving nothing 5 years ago to getting to this point.
Last year we saved and invested a little under $40k, so we are trying to raise the bar each year. I automate a lot of what we save/invest which makes this all a heck of a lot easier. Some months we are able to save more, and some months less, depending on what comes up. But the goal by year end is that $70k!
Progress: We are 60% of the way there having saved/invested $42,000 so far.
Here is where that money is being directed to:
Max out 401(k).
I have 12% automatically taken out of each paycheck. Plus my employer contributes 7.5% of my salary in one payment each year so this equates to contributing 19.5% of my salary to this account until I max it out.
Employee Contributions: $9,616
Employer Contributions: $9,612
Total YTD: $19,228
Goal: $19,500
Progress: Only one more contribution and it will be maxed out.
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.
Right now we are just sticking this money into our HYSA with Ally until I figure out the best option for where to put this money. I’m still learning about the different options and which choice is best for our family but we are deciding between a 529 or UGMA/UTMA account. I sometimes feel paralyzed by being afraid of making the “wrong” choice so I take a lot of time to commit to an approach. But I’m learning to just take the action.
My motto lately is:
Don’t let perfect be the enemy of good.”
Goal: invest $1200 into an account for Henry
Progress: Haven’t pulled the trigger yet but I will get this money invested before the end of 2021!
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’m working on maxing out the individual contribution to start.
Progress: Have made no progress yet. I plan to start making contributions in September and take money from my annual bonus to meet this goal before year end.
Build up Emergency Fund.
Our emergency fund has dwindled over the past year given a higher tax bill, and a few unexpected costs so we are working 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: 1/3 of the way there.
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: We are about halfway there!
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 next year instead.
Progress: Put this goal on hold for 2021
Conclusion
So there you have it. It’s definitely not perfect. As you can see, I’ve met some of the goals I set out, am still making progress on a few and had to be flexible with putting some goals on hold. I am okay with that. My mentality is to aim high and work as hard as I can to reach my goals and be okay with sometimes falling short.
I also have career goals, health goals, travel goals, social goals and family goals, but for now I figured I’d start with sharing our financial goals. I will write a post about goal-setting because I learned how to set goals and actually stick with them through Jim Rohn, my all-time favorite author and speaker. But one of the most important things you can do is to start with writing them down!
I’d love to hear from you! What goals did you make for 2021 and where are you at with them?
