Jacob’s 2014 Financial Goal Setting and Automation

Happy New Year Everyone! It is that time again. That’s right – time to set my financial goals for 2014. It’s hard to believe that 2014 is already upon us. Just one more year, and we’ll be to the year that they traveled to in the movie, Back to the Future II (one of my personal favorites!).

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 at the following links – Creating a Purposed Focused Financial Plan and 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 2013 listed for 2014. 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!). 

2014 is looking like it will be a challenging year. Not in a bad/negative way, but just in regards to experiencing a lot of changes with me getting married, finishing my PhD and potentially moving if a job presents itself out of town, and potentially selling my condo. And, for someone like me who is accustomed to controlling my finances with an exacting hand, change requires me to take a significant amount of time to learn about new things before acting.

So, here goes, the unveiling of Jacob’s 2014 financial goals. In addition to the normal listing and associated commentary that I traditionally include in this type of post, I have also included the various automation steps that I take to maximize my chances of carrying out all of these activities. So, enjoy, and I look forward to reading any comments you all have!


Short Term (Less Than 1 Year) Goals

  • Continue building, optimizing, and balancing a Three-Legged Stool for Retirement.
    • Since I am in the 15% tax bracket (and recently confirmed that I will likely be again for 2014 taxes), my strategy is to first finish off my individual Roth 401k contributions for 2013.
    • Normally, contributing to a Roth IRA would be the first priority since Roth IRA contributions can be taken out for any reason and at any time. However, since I only have a few more thousand $ to go, and Roth 401k contributions for 2013 are only accepted until April 2014, this step got bumped up in the priority order.
    • Anyhow, after that, I will move towards maxing out my Roth IRA contributions for 2014.
    • My next move will be to contribute an equivalent amount in an after-tax investment account in order to have money that is accessible for needs prior to retirement. This is particularly important this year since, if my fiance and I move after graduation, we will likely be looking to purchase a house and need at least a little bit of cash for a downpayment.
    • If I still have any money available for investing after the steps above, I will then focus on contributing to my Roth 401k account for the 2014 tax year.
    • Since my graduate school fellowship income does not count as “earned Income” for retirement plan contribution purposes, I have to make sure that my combined Roth IRA and 401k contributions for 2014 are less than my net blogging income minus the deductible part of self-employment taxes.
    • Automation Step: No automation needed for this specifically, since automation will be handled in steps below. 
  • 1) Contribute maximum allowed for 2013 Roth Individual 401k. This amounts to me needing to contribute $1,819.08 more prior to the April 2014 deadline. 
    • Automation Step: Placed a monthly reminder on my Outlook calendar from now until April 2014 to  max out my 2013 contributions. The timing of this reminder is directly after I receive my monthly paycheck. 
  • 2) Contribute $5500 (or ~$458 per month) to my Roth IRA with Vanguard this year (maximum allowed, which remained the same from last year. I was hoping it would keep increasing like it did from 2012-2013! ).
    • Automation Step: Placed a monthly recurring reminder on the 23rd of each month (day I get paid) to contribute $5.5k to Roth IRA for 2014 / a monthly minimum of $458.
  • 3) After maxing out Roth IRA for 2014, contribute equivalent amount ($5,500) in taxable Vanguard mutual fund account.
    • Automation Step: Placed a monthly recurring reminder on the 23rd of each month (day I get paid) to invest money in this fashion after contributing to my Roth IRA for 2014.
  • 4) If have additional funds available after completing #3 above, contribute >=20% of blogging income to Individual Roth 401(k) with Vanguard.
    • Automation Step: Placed an automatic monthly recurring reminder on my Outlook calendar for this purpose.
    • With this goal, I will need to keep in mind the maximum contribution allowed given the level of “earned” income I realize in 2014 (not including graduate school fellowship income).
  • Reach short-term net worth target for this year (1.10X my current net worth).
    • Automation Step: Already have monthly reminder on Outlook calendar to calculate net worth each month. 
  • Maintain target 6-9 months of expenses in cash reserve emergency fund in Dollar Savings Direct account.
    • Automation Step: Already have monthly reminder on Outlook calendar to calculate net worth each month, and the current level of my emergency fund is included in this.
    • However, with me getting married in September 2014 and then potentially moving and/or starting a new job shortly after, I added a reminder to re-evaluate my emergency fund level in the October 2014 time frame.
  • Put together Purpose-Focused Financial Plan together with fiance, including long-term and short-term financial goals. Also read up on marriage/couples/family finance books as well. 
    • Automation Step: Placed a recurring monthly Outlook reminder on my calendar to tackle this item beginning in the late March time frame, when the 1st-of-the-year busyness and tax return preparations have calmed down a bit.
  • Organize new joint / individual financial accounts for fiance and I. Integrate our two finances together.
    • Automation Step: Set up bi-weekly Outlook calendar reminders for this purpose so I can stay on top of this.
  • Evaluate whether or not to rollover some of tax deferred retirement accounts to Roth status since tax bracket low.
    • Automation Step: Added a recurring Outlook calendar reminder every 2 months to evaluate whether this type of conversion is appropriate/feasible or not.
  • Rebalance mutual fund portfolio to meet asset allocation target %’s (70% equity, 30% fixed income overall).
    • Automation Step: Already have monthly reminder on Outlook calendar to calculate net worth each month, and included in this is a check on asset allocation levels.
  • Keep maintaining zero-based budget that I have set up to strategically manage my personal finances.

    • Automation Step: I already automatically do this every month, so no further automation step is required.
  • Towards end of 2014/after get married, evaluate if need to obtain life, disability, and long-term care insurance.
    • Automation Step: Placed monthly recurring Outlook reminder on my calendar starting in November 2014 to evaluate this action.
  • Have draft of my will + fiance’s will (which she needs to draft) reviewed by a lawyer. Also try to use same lawyer to create wedding contract for our wedding in September 2014. 
    • Automation Step: Placed recurring monthly reminder on Outlook calendar to follow through on the items involving a lawyer. 
  • Create and keep updated a Google Document listing out all of fiance and I’s account types/locations in event either of us is injured. 
    • Automation Step: I just created this Google Document for my personal accounts and added a reminder to have fiance update the doc with her accounts in the next few months. In addition, I added a recurring yearly reminder to update the Google Doc as things change periodically.
  • Continue to save $50 per month for trip to Grand Canyon or Niagara Falls as part of freedom life values account.
    • Automation Step: Created an automated monthly transfer from my checking account to a saving account set up for this purpose at Ally Bank.
  • Invest $500 in Microloans with Microplace.com to support Latin American micro entrepreneurship. This equates to $42 to invest per month.
    • Automation Step: Placed recurring monthly reminder to process this investment on my Outlook calendar as well as added it to my monthly zero-based budget spreadsheet.
    • Recently, I shopped around for other international microloan providers to see if the 2-2.5% annual interest I am earning with Microplace is competitive, and was quite surprised to find out that Microplace.com was the only provider that offers an actual interest rate return on investment.
    • The majority of the other providers are set up where the money from individual lenders is a donation, not an investment. There are also several that offer return of principal, but not an interest rate. Interesting stuff!
    • In another twist of events, as of Jan 14th, Microplace has stopped accepting new investments. Thus, I’ll have to invest my money elsewhere.
  • Invest $25 each month ($300 total for year) in Lending Club A Safety Grade Person-2-Person loans.
    • Automation Step: Set up monthly auto transfer to Lendingclub account for $25, starting Feb 3rd, ending Jan 5th, 2015. Also, placed recurring reminder on outlook calendar to select a lending note each month, day 15th.
  • Donate $1,500 to Multiple Sclerosis Foundation in 2014 (5% of take-home pay in my graduate school research assistantship job).
    • Automation Step: I already have this money saved up and ready to donate, so all I need to do is to process the contribution. Pretty easy here! 
  • Fund raise $5000 for MS 150 bike event in June 2014.
    • Automation Step: Fundraising is a pretty manual process, and I am pretty good about remembering to do it. Thus, no automation step is needed. 
  • Save 3% of take home pay each month (after taxes) for Dream Account.
    • Automation Step: Set up automatic monthly transfer for the correct amount from my checking account to my Dream Account located over at Capital One 360. 
  • $30 per month save for doing running races / bike rides as part of health life values account.
    • Automation Step: Set up automatic monthly transfer from Bank of America checking account to Ally Bank life values savings account.
  • $20 per month save for buying fresh vegetables as part of health life values account.
    • Automation Step: Set up automatic monthly transfer from Bank of America checking account to Ally Bank life values savings account.
  • Save ~20% of (blogging income minus amount of income deferred to Individual 401k with Vanguard plus untaxed graduate fellowship income from my research job) in a DollarSavingsDirect.com online savings account in preparation for 2014 taxes and to pay quarterly estimated taxes.
    • I just ran some predicted numbers, and it appears that even with me getting married and potentially starting a job later this year, I will very likely remain in the 15% marginal tax bracket. Therefore, saving 20% of my income for unpaid taxes / estimated tax payments still seems appropriate.
    • Automation Step: Evaluating my required unpaid income tax savings is already a part of my monthly business transaction consolidation, so no further action is required there. However, I just added a reminder to re-evaluate my 2014 tax bracket after I finalize the details/salary of the job I will start later this year. 
  • $30 per month save for trips to visit friends/family in other states as part of friends/family and freedom life values account.
    • Automation Step: Set up automatic monthly transfer from Bank of America checking account to Ally Bank life values savings account.
  • $10 per month save for purchasing food for backpacking trips in the Blue Ridge Mountains once a month as part of health life values account.
    • Automation Step: Set up automatic monthly transfer from Bank of America checking account to Ally Bank life values savings account.
  • Execute any business tax deductions I can for 2013 taxes.
    • Automation Step: No automation needed, as I have secured a good accountant to help me with my 2013 tax return, and she is familiar with the types of business deductions I want to process. 
  • Send out 1099-MISC for staff writers for 2013-2014 taxes.
    • Automation Step: Not needed since I am already in talks with accountant to send these out by the Jan 31st, 2014 deadline.  
  • Use 1% home value home maintenance fund to fix various small things that are broken around my condo after 3.5 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. This will especially be important if we sell our condo this year in the event of a move. Once I get these things repaired, I will then need to replenish the depleted funds in the home maintenance account.
    • Automation Step: Placed a recurring monthly reminder on my Outlook calendar to look in to this item.
  • Execute 4 estimated tax payments for blogging + graduate research fellowship income on the following dates – 1) April 15, 2014, 2) June 16, 2014, 3) Sept. 15, 2014, and 4) Jan. 15, 2015.
    • Automation Step: Placed reminder of calendar on each of dates above + a reminder 1 month before each date to allow lead time to send in payment. 
  • Maintain a total of $1600 for health expenses for dogs we adopted (for annual health checkup, Frontline/Interceptor, and miscellaneous health emergencies/treatments needed.
    • Automation Step: Placed recurring monthly reminder on Outlook calendar to check that this account balance stays at $1600 (level it is currently as well).
  • Help friends become debt-free.
    • Automation Step: Placed recurring monthly Outlook calendar reminders to follow up on their current balances, monthly payments, interest rates, and to advise them on best path forward. 
  • Continue investing in long-term content growth of blog.
    • Automation Step: As part of my normal monthly zero-based budgeting process, I always check to make sure the correct amount of savings for staff writer payments is present, so no further automation steps are needed here.
  • Determine if it is more efficient to file taxes jointly or separately once fiance and I get married in September 2014. Also optimize (minimize) tax bracket by balancing tax-free and tax-deductible/deferred retirement savings.
    • Automation Step: Added reminder on calendar to evaluate this in December of 2014.
  • Save >50% of after-tax / take-home income. 
    • Automation Step: No additional automation step is needed for this goal since saving is incorporated elsewhere.
    • In 2013, I was able to save 55.38% of my take-home income, so I am hoping to continue this trend!
  • Save $1 per day in Making Future Child a Millionaire Account, invested in the Vanguard Total World Stock Market ETF. 
    • Automation Step: Unfortunately, Vanguard taxable ETF brokerage accounts do not allow you to schedule automatic transfers. Therefore, I had to set this up manually. Each month as part of my zero-based budgeting efforts, I will manually initiate a transfer for $31 to my account. Next, I placed an automatic monthly reminder to invest the money in the Total Word ETF above several days after the deposit has been made.
  • Save $10 per day as a sneaky trick to stash away even more money
    • Automation Step: Already have this automated. The way I do it is to set up automatic weekly transfers 5 days a week for $10-$20 to my Capital One 360 Savings Account. $10 per day on Monday, Tuesday, and Wednesday, and then $20 per day on Thursday and Friday to make up for no transfers on the weekend.


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

  • Continue contributing maximum allowed to Roth IRA and Individual Roth/Traditional 401k each year using dollar cost averaging.
  • Reach intermediate net worth target (~2.2X 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? What goals have you laid out for yourself in 2014? 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 http://www.flickr.com/photos/pickinjim/525129498/sizes/l/


  1. moneystepper says:

    Wow – that is a lot of goals. However, with your automation, they should all be manageable! Good work on the 55% 2013 savings figure!
    moneystepper recently posted…Buying a website as an investment can deliver great returnsMy Profile

  2. That’s a very long list of goals Jacob. I hope you could accomplish every single one of them. Good luck!
    moneysavingdude recently posted…25 Easy Ways To Save Money On Food Without Going On A DietMy Profile

  3. Impressive list of goals, hope you achieve them all.

    Just did a quick tally and it seems like you’re planning to save at least $750/month (possibly more); what % of your income is that? It doesn’t seem plausible that someone in the lowest tax bracket (based on what you’ve posted) could afford to save that much per month and still have money left over for everyday expenses like housing costs, food, clothing etc.

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