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Evaluating My Progress Against My 2009 Goals

This article was written by in Planning. 10 comments.

At the beginning of the year, I set a few financial goals and resolutions representing what I would like to accomplish by the end of 2009. Like last year, my progress is mixed. I’ll get to that in a moment.

I’m not a big fan of the concept of financial goal setting. Goals or targets evoke the image of an endpoint, the touchdown. If you keep running through the end zone, you will hit a wall. The financial goals I set and share each year are markers or milestones. The collection of money, even a certain amount of money like one million dollars, is not a goal. The goal is the kind of person you want to be and how you use the money you accumulate.

Nevertheless, setting time-based financial targets is helpful to measure progress against expectations, even when some variables are beyond control. Here is how I did in 2009.

Goals for 2009

Income: My goal for “Other Earned Income” in 2009 is $108,000, or an average $9,000 per month. My stretch goal is to surpass this year’s success with $132,000.

Result: success. Other Earned Income is basically any income I receive other than the salary from my day job. Surprisingly, I surpassed my stretch goal. However, the year ended weaker than it started. Just maintaining my income throughout the year required more diversity in income sources and much more work than I expected.

Investing: Contribute the full $16,500 to my 401(k). Contribute the maximum to a Roth IRA if possible; if not, contribute to a Traditional IRA and convert the account to a Roth IRA in 2010. Contribute the maximum to an SEP IRA. Invest $250 per month into an account to help pay for future children’s education.

Result: mostly a success so far. I did contribute the maximum to my 401(k) this year, a feat I would not have been able to accomplish (without a major lifestyle change) if I were working with my day job salary alone. I did contribute the maximum to my 2008 Roth IRA and SEP IRA earlier this year, and I plan to do the same before my 2009 taxes are due in April.

Now that my business has been reclassified, I may have more flexibility in how I determine how much I can contribute to the SEP IRA, so I won’t be able to determine the amounts until I work with my accountant.

In addition to retirement investing, I invested $1,000 in the total stock market index fund at Vanguard in a regular non-retirement account at the beginning of each month since May.

I did not, however, set aside $250 each month for my future children’s education. I am still undecided about how — and whether — to tackle this before having children.

Saving: After I pay my taxes, I’d like to take half of whatever I have left and earmark that amount for a down payment on a house.

Result: qualified success. The amount I have in savings accounts, including business accounts, has increased this year from $80,000 to $120,000. I consider that a success. I haven’t specifically earmarked half of that for a house. My “House Fund” at ING Direct holds about $14,000 while I’ve allowed my business savings account to accumulate.

One of the reasons I haven’t invested most of this is because, as I’ve been saying for a few years, I want to have the funds available for when I decide to purchase a house and need a down payment. I’m still not keen on the idea of settling down.

Overall result: mild success. I don’t set net worth targets any more due to the volatility of the stock market. I should end the year with a modified net worth of around $300,000. I have to extend great thanks to the stock market for recovering this year from lows at the end of 2008.

Although I earned more money this year than I earned in 2008, I also spent more money. Overall, my “savings,” what I have left of my income after expenses, decreased by about $20,000. If we take taxes out of the picture, the situation changes. I paid close to $50,000 in taxes this year, including a significant 2008 tax bill, compared to $20,000 in 2008.

Thankfully, I’m working with an accountant now who has already saved me $15,000 between 2007 and 2008.

Tomorrow, I will use some of these results to determine my financial targets for 2010. Did you meet your goals this year?

Published or updated December 29, 2009.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar 1 Anonymous

You open your comments by saying you’re not a fan of financial goal setting because it evokes the image of an endpoint. But many goals do!

For instance, this year, my two goals were:
1. Pay off $14k in credit card debt that was accumulated during a job loss and relocation to my current employment.
2. Pay for my wife’s engagement rings and wedding without breaking the bank.

I reached the end zone with both of them. They are now complete.

Real goals for next year:

1. Establish a $10k-$12k emergency fund.
2. Save $8k for a vacation (and take it!… my wife and I are planning a trip to Thailand.)
3. Save $3k for some furniture and a big screen TV (and yes, we know what we want.).

Each goal represents some sort of finishing point, in that when it is met, funds currently allocated toward it will be reallocated somewhere else — car replacement, house down payment, etc…

But I also think I get what you are talking about when you say that accumulating $X in and of itself, for no specific purpose, is an empty goal. What good is having $10 million if you are just going to put it in the bank?

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avatar 2 Anonymous

I’m very happy my 2009 goals. My husband and I did want to get a house this year, but it didn’t work out. We’ll continue looking in 2010.
We did manage to get a better deal for an apartment so our monthly expenses decreased a little bit.

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avatar 3 Luke Landes

Dan: Those are good examples of specific goals — money for a purpose. I think we’re on the same page about the type of goals I don’t like to see, such as “a net worth of $1,000,000.” That’s not a goal to me, because it doesn’t indicate a real purpose.

Elle: Great job getting a deal on your apartment!

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avatar 4 Anonymous

Wow, that’s amazing you earned more than $138,000 this year from “other income”! You’ll have to do a post providing some tips on how to do that, once the subscriber base reaches a certain point.

I haven’t been focused on monetization at all. Strangely, it doesn’t interest me that much. However, my interests perk up if $100,000/yr can be achieved!

Best, Sam

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avatar 5 Anonymous

I reached my goal of paying off my car (I owed about $8K at the beginning of the year) and paying cash for my tuition. Since getting engaged in July, I have added goals for wedding savings and I managed to pay about $2,000 for the wedding so far and stash another $3k in the bank. It wasn’t a great year for savings because our company chose to furlough us on Fridays, effectively reducing our pay by 20% earlier this year, but luckily we’re back on Fridays for now.

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