2011 Year-End Financial Goals Review and Progress Update

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Along with signifying a new beginning, the time around Christmas and New Year’s each year represents a very special, almost sacred, occasion for me. It is a time when I put my normal life on hold and make the “pilgrimage” to my home-land of Arkansas to relax with my family for 1-2 weeks.

On this trip, aside from relaxing and having a good time with my family, I make sure to set aside time to tune out the normal distractions in everyday life – computers, laptops, cell phones (sometimes at the risk of annoying the girlfriend in not responding to her messages – oops!) – and reflect on the year that has just passed. I think about my accomplishments, my progress on my life goals, and how both of these things relate to what I want to achieve. These periods of deep thought often occur while I am sitting around the fireplace at my parents house (see picture below for an example of me relaxing with my cat, Cream).

And, since I am lucky enough to be quite a finance nerd, what usually materializes out of these reflection periods is a good list of financial goals for the coming year. 

However, I can’t start listing out new financial goals for 2012 (keep an eye out for that post soon!) before summarizing my progress on my 2011 ones first!

I’ve gotten pretty behind on these financial goal updates with the year-end craziness (the last one I gave was on October 18th!). As such, this post/update will serve to reflect new progress that has been made in the November-December 2011 time-frame. Enjoy! I look forward to hearing your comments, thoughts, and progress on your own goals.

To quickly review, back in January of 2011, I laid out my short term, mid-term, and long term goals for the 2011 year. I do this once every year as part of my goal to create what author David Bach calls a Purpose Focused Financial Plan. The goal of this system is to employ money in your life in a way that matches your life values and dreams. You can read more about my journey to create this system at the following links – Creating a Purpose Focused Financial Plan & My Personal Finance Journey’s Investment Strategy.

Overall, I’ve been very lucky in the regard that my progress in 2011, for the most part, met or exceeded the expectations I originally laid out at the beginning of the year. 


Short Term (< 1 year) Goals:

• Contribute $5000 (or $420 per month) to my Roth IRA with Vanguard this year (maximum allowed) – Complete. Have now contributed $5,000 so far this year. 
• Because my graduate school employment doesn’t include the perk of a 401k, I had thought that my tax-deferred investing options for 2011 were exhausted when I maxed out my IRA contributions earlier this year. 
• Because of this, during the summer time-frame, I began pouring any extra money at the end of each month towards my condo home loan. I made some great progress in building up equity in that investment. 
• However, in December, I was able to open up and fund a self employed individual 401k with Vanguard. I then contributed $3000 to this account (pre-tax. Nice!). This helped immensely in reducing my tax liability for 2011.
• Reach net worth target for this year (not displayed here) – Not obtained – the equity markets didn’t seem to want to cooperate in allowing me to achieve this goal, as it requires an ~20% increase in net worth. However, all in all, I can’t complain too much. 
• Maintain target 6-9 months of expenses in cash reserve fund in Dollar Savings Direct account –Complete – currently carrying ~9 months worth of expenses in cash in my emergency fund account.
• Rebalance mutual fund portfolio to meet asset allocation target %’s (75% equity, 25% fixed income overall) – Kept correct throughout whole year. Only rebalanced 1 time I believe. 
• Obtain 15% ownership / equity in condominium – Complete – currently, I have 18.17% equity in my condo. Almost time to be eligible to remove the private mortgage insurance when I reach 20%!
• Put together a will and have it reviewed by a lawyer – Will completed. Not yet reviewed by lawyer.
• Continue to save money for trip to Grand Canyon – Savings ongoing – need to continue to evaluate when to take this. 
• Currently, I have $470 saved up for this trip. I increased the monthly savings to $50 starting in October, and that has helped accelerate the savings nicely.
• Upgrade condominium with investment in stacked washer/dryer combo – $1000 for unit, $1000 for labor/installation – Decided to cancel this upgrade for storage space saving reasons.
• As of September, I officially had accumulated 1% of my home value in my home maintenance savings account. From then on, I began accumulating the $2000 that it would have cost to get the washer/dryer in my condo.
• However, I have since decided to hold off getting this washer/dryer since closet storage space will be at a minimum since my girlfriend and I have decided to move in to my condo starting in June 2012. 
• Invest $500 in MicroloansComplete! It was fun doing this in 2011!
• Donate $1,300 to Multiple Sclerosis Foundation in 2011 (5% of income) – Done. In the 2011 Tour de Vine event, I raised approximately $5625 to support finding a cure for this disease (with the help of company matches). My bike ride happened on June 11-12, 2011 and was a huge success.
• Save 3% of take home pay each month (after taxes) for Dream Account. On target – Have an automatic transfer each month from my Bank of America checking account to my ING Direct high yield savings account.
• $30 per month save for doing running races as part of health life values account – On target.
• $20 per month save for buying fresh vegetables as part of health life values account – On target.  If I don’t do this automatic savings, I can forget to buy fresh veggies and only buy canned ones! haha
• Save ~33% of blogging income (if any) in a high yield online savings account in preparation for 2011 taxes. Done – 4th quarter quarterly estimated tax payment sent in. 
• I’ll be sure to put together a future post on estimated taxes, as it is something that crept up on me without knowing almost in 2011. I did a good job estimating/saving for my blogging income taxes, but I did a VERY bad job of saving money for estimated taxes on my day-job research fellowship income. 
• Because of this, I had to pay about $1,500 more in estimated taxes for 2011 than I was planning for. Lesson learned!
• Implement dollar value averaging for my 2012 Roth IRA contributions. Canceled. 
• I’ve decided that dollar value averaging, even though it will produce a slightly higher return on investment, is not well suited for me in the long term. Explaining why this decision was made will be part of a future post.

Mid-Term (3-5 years out) Goals:

• Continue contributing $5000 to Roth IRA each year and using dollar cost averaging.
• Reach intermediate net worth target (not displayed here, but is 2X my current net worth)
• Own a rental property by 2016.

Long-Term (>5 years out) Goals:

• Obtain a net worth of $1,000,000
• Own a home free of mortgage payments
• Own a vacation home in the mountains somewhere remote
• Accumulate enough funds not have to work, but will probably anyways because I would get bored. 

How about you all? How have the months of November and December been for achieving your goals? What are your next milestones? Have you set financial goals for 2012 yet? 

How about you all? Share your experiences by commenting below!