My goals for 2005 included:
Make the maximum contribution to my 401(k). My employer doesn't yet do any matching, so it's not the screaming wicked deal it is at some companies, but it's nice to have that money taken out of my paycheck, allocated to various mutual funds, and basically forgotten about. Anyway, I had been contributing $400 per paycheck (twice a month), but when I got my raise this past spring, I upped it to $650 per pay. So I'm on track to max it out for this year and also for next year.
Make the maximum contribution to my IRA. Made the last $1000 contribution today, so: mission accomplished. I like having a Roth because in a dire emergency, I can pull my original contributions out with no penalty. Thus it serves two purposes: a safety net and a forum for learning about investing in individual stocks.
Keep a lid on my recurring monthly expenses. Every few months I like to take a look at where my money goes and see if I can find any way to tighten my spending a little. For example, I did have Vonage's $20-a-month unlimited calling plan, but I noticed that their $15-a-month plan that only includes 500 free minutes was a better fit. (They charged me $10 to switch plans, the bastards!) I splurged on Internet connectivity (I have Comcast Business Internet, it is pricey) but I made a hosting/webmastering deal that defrays some of that cost. I hardly ever use my cell phone and currently have T-Mobile's $20-a-month plan, but I will be switching to one of their prepaid plans (1000 minutes for $100, good for a year, which works out to a little more than $8 a month) -- I just have to call them and make sure I can still get an add-on data plan for the two months a year I need it. I dropped my NetFlix subscription to the lowest tier, that's another $10 a month saved. And I really should call up AOL and threaten to cancel again so they'll give me some more free months, or just, you know, cancel for real and save that $10 a month too. I'll be shopping around my insurance again soon, although nobody has ever managed to beat State Farm in the past. Those things don't save a lot individually, but it adds up. Now if only I could cancel the DirecTV. I can download every single one of the TV shows I watch regularly for free, but that's technically illegal. Still, I'm paying $500 a year for that.
Do something with the photography. This is a personal growth goal as well as a financial one. It is unlikely, given the amount of money I spent on the new camera setup in 2005, that I'll actually make a profit on photography this year. However, with my work hanging at Maia Skin, I hope I'll be able to sell at least a few prints. And of course since I'm now pursuing it for profit, I can write off the cost of the prints and framing as well as my gear. (Technically I suppose I could have taken a writeoff last year, which was the first time I had work hung in a gallery, but I didn't spend a lot of money on photography in 2004, so it wouldn't really have been worth it.) In the coming months I will also set up a Web site to sell prints. Art walk in Mukilteo on August 4!
Save up least $10,000. This will be the tough one. In theory I should be able to do this, but my parents are flying out for a visit next month and I promised them I'd show 'em a good time; then there's Christmas, with the trip home and gifts. And, of course, there's a Tablet PC in my future -- the small one from Motion, most likely. And a couple more lenses for the ol' camera and maybe an actual vacation. With all that, I'll be lucky to come anywhere near my goal. I do have some unneeded possessions I'll be liquidating to help finance my new acquisitions, which will help. (Anyone want a pair of Vandersteen 2Ce speakers? They are great, but I just don't have room for 'em.) At the very least, I'd like to be able to make my full Roth contribution for 2006 on January 1 of next year, and that'll require $4000, a much more attainable goal.
If I can quell my techno-lust and put most of my second paycheck into savings each month starting in 2006, I'll reach $50,000 in savings around the middle of 2008, right around the time the last negative items finally fall off my credit report, and I'll be ready to start thinking about buying a house by the time I hit 40, which is a nice round number to have as a goal.
Posted by kindall at July 18, 2005 04:24 PM