This is the year I set real financial goals for myself! Obtainable ones! I'm going to work my butt off for them, but I'm going to get them!
My goals are largely focused around two things: (1) our lease is up in August and we have no idea where we are going yet except for the fact that (2) we want to backpack through Central and South America for a few months before we settle down somewhere. With those in mind, I want to pay down my debt, build up my savings, take advantage of my 403(b) account, and save for traveling.
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GOAL #1:
Pay down my credit card bill.
I built up some credit card debt by doing the normal things one does to build up credit card debt – kept adding purchases onto the card, without paying off the full amount each month. The most basic mistake that I knew not to make and yet I still did it. It's not a terrible amount, and certainly people have had to handle worse, but it is enough that I can't pay it off in one paycheck. I'm taking responsibility for my previous actions and I'm actively working to pay it down.
It's mid-March and I'll be able to get it all taken care of by May 10th (if I stick to my payment plan and my budget). I've made myself a tight budget until it's taken care of, partially because I want it taken care of as soon as possible and also because I'm punishing myself a little for being so fool-hardy. There's so many little things I'd like to buy (some new exercise clothes and new underwear, a new pair of shoes for work, etc.) but I'm trying to force myself to stay within my budget, so I can keep paying off my credit card with some emergency cash and while still contributing to a savings account.
GOAL #2:
Build up an emergency savings account.
I've luckily never had an emergency that my parents haven't been able to help me out with (even the big dumb ones that I brought upon myself). Up until a few months ago, I haven't had jobs that paid well enough for me to really save. Which, I suppose if I had made a budget and truly followed it, it's possible that I might have been able to, but I'm now in the position of being able to really save money.
I'll be 23 years old in a few weeks, and I really want 23 to be the year that I pull my life together. I want to be a responsible woman who can take care of herself, even when shit happens. Starting from this last paycheck, I set up an automatic transfer from my checking account to my savings account to pull $200 each month. It's not a lot, but my main focus is paying down my credit card debt. I still want to have some money set aside, in case something happens between now and May.
Once my credit card debt is paid off, I'm going to start funneling at least $800/month into my savings account, so by the end of August I will have at least $3600 in my savings account for emergencies. This also translates to about 3 months of living expenses. I ideally want to have at least 6 months saved up, especially as we may be moving, but even just 3 months will be better than nothing. Also, when we move out, we will (hopefully) get all of our security deposit back, which will be $2500 I can plop right into that savings account.
The goal for this savings account really is for emergencies – this isn't just a savings account for me to put extra money. This goal is purely focused on putting aside money for some sort of unplanned emergency. My immediate goal is to have 3 months of emergency savings by August (based on my current living expenses, which admittedly makes me nervous because I don't know where we're moving. If our living expenses increase, I'll have even less funds in comparison, but I'm focusing on what I know now and trying not to panic too much)(trying). My long-term goal is to keep building it up until I have at least 6 months of savings.
GOAL #3:
Invest in my retirement account.
My current employer offers benefits. I'm an adult! With a full-time job! With benefits! One of those benefits is a 403(b) account which my employer matches up to 4.5%. So, I'm contributing 4.5%. I want to put in more, but Goals #1 and #2 are more important to me. I'm taking advantage of what my employer is matching which is good enough for now. Once my credit card is paid down and I have an emergency savings account of three months, I'll start contributing more. Once I have an emergency savings account of six months, I'll start seriously looking at what I'm making and how much I can start putting away for retirement, but I'm happy just getting into the habit and starting something while I'm young. This goal will probably just stay at that 4.5% investment for the time-being, since a more immediate goal is saving for South America.
GOAL #4:
Save for traveling.
This is backpacking household. I love backpacking (I do! Even when I complain and feel crappy because I'm so out of shape) and the boyfriend has always wanted to backpack through Central and South America. Our lease is up in August, and we've got grand (still somewhat vague) plans to take off to South America for a few months. If I'm really good about not spending money, I'll have 2.5 months worth of money (plus a plane ticket) for backpacking (assuming $50/day). If I take the money from the security deposit and use that for the trip instead of emergency savings, I'd have enough for 4 months.
I would really love to go for a longer trip, but 4 months away from home (meaning pets) is a long time. I also don't necessarily want to spend that money from the security deposit on a trip, as much as I'd love to travel for a longer period of time. I'd prefer to keep that for our next security deposit, or just put it in my emergency savings account and bam! I'm that much closer to 6 months emergency savings.
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AND SO. There you go. I've got financial goals. Big ones. They are totally achievable, if I'm smart with my money (which is such a struggle, especially since I tend towards the TREAT YO'SELF mentality). I'm trying to remind myself that saving for my future and saving for traveling is in fact treating myself, but it's an uphill battle. I really believe it's possible though, I just need to keep my focus.
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