Mid-Year 2013 Financial Goals Check-In and Progress Update

financial goals, financial planning, dream-based financial planningHappy first few official days of Summer 2013 everyone! I hope you’ve been enjoying the warmer weather and have been able to get outside every once in a while!

I’ve really been enjoying getting out on the weekends and doing some nice long bike rides in the hills, mountains, and valleys here around Central Virginia! The picture to the right is me and our golden retriever, Crystal, chasing after a ball in a local dog park recently.

Back in January of this year, I set my financial goals for 2013. Since the year is now almost officially half finished, I figured it would be a good time to sit down and take a few minutes to review how I’ve been doing thus far in reaching or NOT reaching (in some cases) the various targets I set for myself. 

Overall, I would rate the 1st half of the 2013 year as being all-around top-notch, from a personal, financial, and professional perspective. The financial markets are doing well, the real estate market seems to be coming back (good for me since I may be looking to sell my condo in the next 1-2 years), I got engaged in mid-March, and have started exploring a whole new realm of in-vivo (mouse studies) in developing our Alzheimer’s disease drugs in my graduate school studies.

So, here goes, a progress update (in bold below) on how I’ve been doing so far in 2013 reaching my financial goals. Enjoy, and I look forward to reading any comments you all have!

Short Term (Less Than 1 Year) Goals
  • Contribute $5500 (or ~$458 per month) to my Roth IRA with Vanguard this year (maximum allowed, which increased $500 in 2013 compared to the $5000 maximum allowed in 2012!).
    • Done. I finished maxing out these contributions in around the May timeframe. Yahoo!
  • Reach short-term net worth target for this year (1.42X my current net worth).
    • I’m getting a lot closer, but not quite there yet.
    • I need an increase of about 23% more from where I am now, so that’s definitely better than a 42% increase needed back in January! 
  • Maintain target 6-9 months of expenses in cash reserve emergency fund in Dollar Savings Direct account.
    • On target. 
  • Rebalance mutual fund portfolio to meet asset allocation target %’s (70% equity, 30% fixed income overall).
    • Done. Going well. 
  • Put together a will and have it reviewed by a lawyer.
    • Have put together a will, but still have not gotten it reviewed by a lawyer. Need to though! 
  • Continue to save money for trip to Grand Canyon or to see Niagara Falls.
    • On target. 
  • Invest $500 in Microloans with Microplace.com to support Latin American micro entrepreneurship. This equates to $41.67 to invest per month.
    • On target. 
  • Donate $1,150 to Multiple Sclerosis Foundation in 2013 (5% of take-home pay in my graduate school research assistantship job).
    • Done. I actually donated $3,000 this year. Yah! 
  • Fund raise $7500 for MS 150 bike event in June 2013.
    • Done and surpassed. I ended up raising $11,000 total this year for the MS Society, which puts my total in the past 5 years at above $25,000. Nice! 
    • It looks like I’ll end up being the 2nd or 3rd highest fundraiser in this year’s MS event.
  • Save 3% of take home pay each month (after taxes) for Dream Account.
    • On target.
  • $30 per month save for doing running races / bike rides 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.
  • Save ~20% of (blogging income (if any) – amount of income deferred to Individual 401k with Vanguard + untaxed graduate fellowship income from my research job) in a high yield online savings account in preparation for 2013 taxes.
    • On target. Since I am investing so much in staff writers/content creation for my blog, my overall income is lower this year, meaning that I don’t need to pay as much in taxes. 
  • Apply for new graduate research fellowships since the one I have from the NSF will run out in 2014 (and need to apply for new ones about a year ahead of time).
    • On target.
    • I have discussed this with my graduate school advisor, and we have selected 2-3 good-looking fellowships that I will apply for later this year. 
  • $30 per month save for trips to visit friends/family in other states.
    • On target.
  • $10 per month save for purchasing food for backpacking trips in the Blue Ridge Mountains once a month.
    • On target.
  • Contribute at least 20% of blogging income to Individual Roth 401(k) with Vanguard.
    • Have not done yet, but will start soon.
    • According to the account hierarchy priority order, I have first been maxing out my Roth IRA this year prior to funding my Individual 401k (which I recently found out has a Roth option, so I’ll soon start taking advantage of that!).
  • Execute any business tax deductions I can for 2012 taxes.
    • Done.
  • Use 1% home value home maintenance fund to fix various small things that are broken around my condo after 2.5 years of use. These things include a closet door off the hinges, the light-switch in the bathroom not working all the time, the bathroom towel rack holder coming unscrewed, 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.
    • Have not yet done. 
  • Execute 4 estimated tax payments for blogging + graduate research fellowship income on the following dates – 1) April 15, 2013, 2) June 17, 2013, 3) Sept. 16, 2013, and 4) Jan. 15, 2014.
    • Done/on track. 
  • Save $111 per month until have a total of $1600 for health expenses for dogs we adopted (for annual health checkup, Frontline/Interceptor, and miscellaneous health emergencies/treatments needed. I will have the $1600 total after March 2013.
    • Done.
  • Help friends become debt-free.
    • On track.
  • Continue investing in long-term content growth of blog.
    • On track. 
  • ***New Goal Added During 1st Half 2013*** – Continue building, optimizing, and balancing a Three-Legged Stool for Retirement
    • Since I am in the 15% tax bracket, I first maxed out my Roth IRA for 2013.  
    • My next move has been to contribute an equivalent amount in an after-tax investment account in order to have money that is accessible for needs prior to retirement. 
    • Now that I have completed that, I am going to work towards contributing to a Roth Individual 401k with Vanguard. Should be good! 
Mid-Term (3-5 years out) Goals:
  • Continue contributing $5500 to Roth IRA and Individual Roth/Traditional 401k each year using dollar cost averaging.
  • Reach intermediate net worth target (2.8X my current net worth).
  • Own a rental property by 2018.
Long-Term (greater than 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? How are you doing so far in reaching the goals you laid out for yourself in 2013? What techniques do you find are most effective in holding yourself accountable and on-track for your goals you set?  

Share your experiences by commenting below!

Comments

  1. I skimmed through a few but overall it seems like you’re doing very well. Congrats and keep up the good work. It’s always good to meet goals. I can’t believe the year is almost half gone.
    Money Beagle recently posted…Why I Will Never, Ever Root For Tesla MotorsMy Profile

  2. Emily @ evolvingPF says:

    Thanks for sharing your goals update! I love seeing how other grad students manage their money. I never realized you had the NSF fellowship before now – congratulations! I bet the income boost has been nice. 🙂

    I’m not sure if you ever looked into this, but I’ve concluded that we can’t use fellowship income, like that from the NSF, toward IRA contributions as it is not earned income. I’ve researched this extensively and posted on the subject some time ago. Please let me know in the comments there if you disagree with my research or conclusions. It’s not a conclusion I like but I can’t really see a way out of it without receiving a W-2. http://www.evolvingpf.com/2012/03/earned-income/

    Anyway I just wanted you to be aware of that issue, if you weren’t already, so that you make sure you have enough earned income from your other sources to contribute that $5,500 to the Roth IRA as well as whatever you’re doing with your 401(k). It sounds like blogging isn’t much of an income source any longer so I hope you have some others for earned income (i.e. not interest or dividends, etc.) so you don’t run afoul of the IRS over your contributions. (Not that I think it’s likely they would pursue any of us, really.)
    Emily @ evolvingPF recently posted…Do I Want a Camera or Subjects?My Profile

    • Thanks so much for stopping by Emily! Yeah, the NSF fellowship has been really nice. I almost got caught out the first year I had it since I didn’t know I needed to pay estimated taxes until the last minute.

      Thanks also for alerting me about the potential issue with IRA contributions / fellowship income.

      So far, I have simply assumed that since I do have to report/pay income taxes on the fellowship income (even though I don’t get a w2 for it), it would in fact count as earned income. Furthermore, I have an accountant do my taxes each year, and he knows that I consistently contribute to a Roth IRA, so I just assumed there were no problems.

      However, after looking through the details from the IRS publication and other places online, it appears that fellowship income that is not reported on a W2 CANNOT be counted as earned income for IRA purposes. So, I’ll just have to make sure that my business income is over the amt that I have contributed so far for my Roth IRA.

      I may also have to hold off contributing to a Roth Individual/Self-Employed Solo 401k this year. It’s my understanding that eligible earned income from self employment for IRA purposes is reduced by contributions to self employed retirement plans. However, I’m not sure if that applies to just traditional plans, or also to Roth 401k plans?

      Any ideas?
      Jacob A Irwin recently posted…Mid-Year 2013 Financial Goals Check-In and Progress UpdateMy Profile

      • Emily @ evolvingPF says:

        Yeah, I have found that tax professionals are not at all informed about how to deal with fellowship income. They know how to deal with scholarships for college students that offset tuition and W-2 income and self-employment income, but fellowship/1099-MISC box 3 income used for living expenses is different from all of those!

        Yes, that is the same conclusion I came to when I read the IRS documentation instead of listening to the logic that both you and I were using. Too bad the IRS isn’t logical as well! I’m glad you seem to have enough earned income to cover the Roth IRA contribution.

        I don’t really know about the self-employment stuff so I’m just speculating… But 1) Probably the contribution rules to individual Roth 401(k)s are the same as individual traditional 401(k)s. 2) I don’t think you would be able to double-count your earned income for both the IRA and 401(k).

        Please spread the word about this issue to your fellow future-minded students! Almost no one knows about the earned income problem. I actually have found a lot of people on random sites I don’t visit (reddit, forums of other PF blogs) linking back to my blog post on the subject.
        Emily @ evolvingPF recently posted…Do I Want a Camera or Subjects?My Profile

        • Yeah I’ll definitely spread the word! I think that the majority of students in my department are paid via w2 income, at least for half of their income. Thus, they’d likely still be able to contribute to a Roth IRA with those “earned” earnings.

          However, I’m not sure many of them are saving much right now…haha
          Jacob A Irwin recently posted…Mid-Year 2013 Financial Goals Check-In and Progress UpdateMy Profile

          • Emily @ evolvingPF says:

            That’s great that most are paid part of the year with W-2s. The trend I see at my university for the sciences and engineering is that the first 1-2 years are on fellowship (for those who don’t have the NSF or similar) and then the rest is all W-2.

            I’ve been surprised at how many of my fellow grad students are interested in saving for retirement, even if they aren’t doing it in their first couple years of school.
            Emily @ evolvingPF recently posted…Do I Want a Camera or Subjects?My Profile

  3. I got to make one of these update post. Thanks for sharing. Something about these progress reports that motivates me.
    Peter recently posted…Superflat Culture: What are we becoming?My Profile

  4. I think the key to accountability is just keeping track. If you follow each dollar you are more likely to be responsible with it.
    Michael @ The Student Loan Sherpa recently posted…Putting an End to the “Good Debt” MythMy Profile

Speak Your Mind

*

CommentLuv badge