Financial Goal Setting for the 2012 New Year

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Happy New Year Everyone! It is that time again. That’s right – time to set my financial goals for 2012.

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. It is a very cool idea!

You can read more about my journey to create this system and some examples of goals at the following links – Creating a Purposed Focused Financial Plan & My Personal Finance Journey’s Investment Strategy.

As is the case with many things in life, a good portion of financial goals are long-term commitments requiring attention in each passing year. As such, you might see many similar goals that I was trying to or did achieve in 2011 listed for 2012. I am perfectly fine with having some of the same goals year-to-year, provided that I believe in the causes they represent (which I ponder each year, and all of the ones listed below definitely do meet that criteria!). Nevertheless, I’ve tried to call attention to completely new financial goals for 2012 by highlighting them in bold red text for easier reading. 

So, here goes, the unveiling of Jacob’s 2012 financial goals. Enjoy, and I look forward to reading any comments you all have!  

Short Term (<1 year) Goals:
  • Contribute $5000 (or ~$420 per month) to my Roth IRA with Vanguard this year (maximum allowed).
    • Reach net worth target for this year (not displayed here).
    • Maintain target 6-9 months of expenses in cash reserve emergency fund in Dollar Savings Direct account.
    • Rebalance mutual fund portfolio to meet asset allocation target %’s (75% equity, 25% fixed income overall). 
    • Obtain 30% ownership / equity in condominium. Pay $500 per month for condo mortgage payment.
    • Put together a will and have it reviewed by a lawyer.
    • Continue to save money for trip to Grand Canyon. Currently, I have $470 saved up for this trip.
      • Invest $500 in Microloans with to support Latin American micro entrepreneurship. This equates to $41.67 to invest per month. 
      • Donate $1,150 to Multiple Sclerosis Foundation in 2012 (5% of take-home pay in my graduate school research assistantship job).
      • Fund raise $7500 for MS 150 bike event in June 2012.
      • Save 3% of take home pay each month (after taxes) for Dream Account.
      • $30 per month save for doing running races as part of health life values account.
      • $20 per month save for buying fresh vegetables as part of health life values account.
      • Save ~33% of blogging income (if any) + untaxed graduate fellowship income from my research job in a high yield online savings account in preparation for 2012 taxes.
      • New Goals for 2012Listed below are several financial goals for 2012 that were not in any shape present in my 2011 goal armada. Hot off the press from Jacob’s brain! I’ve also posed several questions I need help on in bold text below. 
        • $30 per month save for trips to visit friends in other states I have not seen in a long time.
        • $10 per month save for purchasing food for backpacking trips in the Blue Ridge Mountains.
        • Contribute 20% of blogging income to Individual 401(k) with Vanguard. Until April, keep contributing to 2011 tax year in order to reduce tax liability. Prioritize these contributions ahead of 2012 Roth IRA contributions for the time being.
        • Investigate and execute any business tax deductions I can for 2011 taxes.
          • Specifically, I am interesting in seeing if I can deduct a portion of home expenses as a business expense since I use a room of my house for a home office. 
          • Any one have any experience with the rules/restrictions on this?
        • Use 1% home value home maintenance fund to fix various small things that are broken around my condo after 2 years of use. 
          • These things include a closet door off the hinges, the light-switch in the bathroom not working all the time, and some pipes under the sink that need to be re-caulked. 
          • Once I get these things repaired, I will then need to replenish the depleted funds in the home maintenance account. 
          • For small things around the house like this, would you all fix them yourself or call a “handyman?”
        • Execute 4 estimated tax payments for blogging + graduate research fellowship income on the following dates – 1) April 17, 2012, 2) June 15, 2012, 3) Sept. 17, 2012, and 4) Jan. 15, 2013. 
        • Organize move in of my girlfriend in to my condo in June-July 2012. 
          • Figure out how to structure move with my condo insurance and decide if she needs renter’s insurance and a rental agreement. 
          • Also, I’m curious to learn about any potential tax deductions I’ll be able to receive now that I have a “tenant.” Should be interesting!
        • Start saving a little money each month to attend the Financial Bloggers Conference, 2012 in Denver in September. 
          • I’m conservatively guessing that the trip will cost $1000, so that works out to needing to save about $111 each month up through September. 
          • I better get started on this soon! 

        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 or a ski resort.
        • Accumulate enough funds not have to work, but will probably anyways because I would get bored. 

        How about you all? What goals have you laid out for yourself in 2012? What technique do you find is most effective in holding yourself accountable for your goals you set?  

        Share your experiences by commenting below!

          ***Photo courtesy of


          1. Nice goals – I am going to make every effort to get to the conference so we can finally meet in person!

          2. Shannyn@FruBeautiful says:

            I just picked up a book- “Self Employment Tax Solutions” by Walker. It was $13 with shipping thru PayPal and I think it might be helpful for questions like that! I know for 2012 I really need to figure out non-traditional tax issues (with blogging and freelancing). Oy vey! I am not looking forward to paying taxes 4 times, I really need to open that book and figure this out!

            By the way, love your 5 year goals. I always love posts like this, they are so darn inspiring. Good for you and keep working at it, I think you'll be able to have a smashing year!
            My recent post How To Survive Your First Midwest Winter: Wardrobe Tips {video}

            • Thanks for reading Shannyn! I think I've gotten all of the tax questions sorted out this year, but it was quite a headache!
              My recent post How to Grow a Business in Tough Times

          3. The Happy Homeowner says:

            Love how your goals include both short-term and long-term items to focus on. I also make annual (and monthly) goals, and I find that they help me stay on top of my financial priorities and motivate me to keep moving forward. Good luck in 2012!

            • thanks for reading Happy Homeowner! I try to keep the longer term goals in sight while still enjoying the present.
              My recent post How to Grow a Business in Tough Times

          4. Barb Friedberg says:

            Hi, I love to fix things around the house, but I have to weigh the time it takes me versus a handyman. Right now I'm so swamped I'm using a handyman. It's really a person decision. I love the microlending concept and have some microlending charities on my quarterly list of beneficiaries. I'll have to check out I'll look forward to supporting you again for the MLS, ride!
            My recent post FRIDAY THE 13th-Links

          5. What are three things you want to accomplish with your life?
            1. Accumulate enough wealth to retire by 50
            2. See the world and share those experiences with a significant other
            3. Be happy, healthy with a great family with a strong connection and values

            What have you done today to bring yourself closer to accomplishing one or more of those things?
            1. Started saving from an early age
            2. Got a well paid job in the city of london to start next year
            3. Educated myself about financial matters

            How do you plan to hold yourself accountable?
            1. Blogging – accountable to others
            2. Expressed my goals to family and friends – add a little pressure
            3. Have reasonable goals and keep them in mind – keep on the road to riches

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