Every year I try to set out resolutions and goals for the year. 2014 was the year of getting healthy. It was actually a pretty good year for getting emotionally and financially healthy, but not physically healthy. 2015 was a really good year for my financial goals except for I didn’t visit my family as much and I didn’t have as much fun traveling. Both things I would like to do more of.
Thinking about some new goals for 2016 has actually led me to much more reflection on how I approach my finances. I am thinking I might have to be a little less rigid with some financial items (e.g. paying off debt). Part of this reflection is that I hope there will be some major changes in my life over the next couple of years and I want to prepare for that (this is good by the way), but the debt that I have is at such a low interest rate it might actually serve me better to put that money to work in other places and/or have a little bit more cushion in my budget.
After thinking about this here are my financial goals for 2016.
- Continue to pay off 10% of my total debt. My original debt total at the end of 2014 was just over $264,000. At the end of 2015, I had achieved my goal of paying off over 10% by reducing that debt down to $236,000. At the end of 2016 my goal is to continue to have paid off 10% of the original amount of debt, which would mean an additional $26000. I think that is doable.
- Reducing my mortage to under $150,000. Currently, the mortgage sits at just over $161,000. If I just paid normal payments it would be only down to $152000 at the end of the year. So I have to come up with a little extra money to make this goal.
- Save 25% of my total income. I didn’t come close to that in 2015. In 2015 I only got to about 19%. If I am going to do this I will not only have to max out my retirement plans (e.g. Roth IRA, 401a, 403b) but it almost might mean I have to open another retirement account, which I can do by starting a 457 plan. However, this might be incompatible with paying off debt.
- Pay off my personal loan/second mortage. At the end of the year this debt stood at $11000. I paid off over $16000 on it in 2015. However, the interest rate is so low at 2.39% that some people have questioned my sanity at paying this off. The better mathematical plan (and I think they might be right) is to invest, not pay down debt.
- Do some more travel for 2016. Probably the thing I love to do the most is travel. I absolutely love it. The good thing about my job is that I get to travel for part of it. I get to be a tourist, while “working.” I hope to continue this in 2016, but I want to do a bit more travel on our own dime. I hope that Mrs. ROB and I will visit Europe at least once for a conference, but also do some more local travel. For example, I have lived in the Northeast for almost 10 years and have never been to Martha’s Vineyard or Nantucket. I have only been to New York City once. It isn’t that expensive to go and it is time I try to be a bit more of a tourist.
- Figure out what to focus on. One of my biggest “problems” I think is that I try to do too much at once. I have too many irons in the fire. I try to cover all my bases. I mean look at the goals above I am trying to both save AND pay off massive amounts of debt. I need to get to a space where I figure out what is more important for me, emotionally and financially. Mathematically, the smarter move is to plow more money into savings. But that debt bugaboo still lingers. Also, there are potentially some major expenses coming up in the next year or so. How will we deal with those? Should I even worry about them? Couple that fact with I want to live a little. I want to be able to save and travel to Ireland, for example, because it is so close. How can I do that? Finally, we have some fairly irregular months for finances. During the summer my income can go down/go up, but my paychecks are a little irregular. How do pay for everything? Yes, this is a lot to work through and this is why I stress I think I am trying to do too many things at once. One of the things I need to work on is focus, which is difficult for me, on paying off debt or saving and stick with it. That is probably the biggest goal.
These are some big financial goals for 2016 and some of them are contradictory. I guess we will see where the world takes us. I hope you have a wonderful 2016.