Financial Resolutions for 2008, Part I
When I was in middle school, one of my friends made a New Year’s resolution to avoid fried foods all year. I have a specific memory of sitting in a McDonald’s with three or four people’s orders of french fries piled in the middle of a tray, all of us sharing–and Cecilia abstaining. She kept her resolution all year, and the time without turned her off the taste of fried foods. Did I mention we were in middle school?
I don’t think I’ve ever met anyone else who kept such a broad New Year’s resolution, although I have known people to take the opportunity of a new calendar or school year to write out step by step plans of achievable, measurable goals and succeed.
This week and next week, I’m going to lay out my financial plans for 2008. A few qualifications, first. Most of it is focused on the first six months of the year, although I have a few longer-term plans in there. The beginning of 2007 feels like it was so long ago, I don’t feel confident planning out the whole next year. Also, like any good plan, I already know I’m going to make changes and shuffle, so I also plan not to freak out about changes of plan. After the jump, I lay out my plans for spending and saving; next week, I’ll look at my debt, credit and career.
Spending
Vacation: I’m planning a vacation in the beginning of May. Though I don’t know exactly how much it will cost yet, my goal is to save $2000 for it.
Bills: My parents are still taking care of a few of my bills–my mom pays for my auto insurance and my dad pays for my cell phone, both on family plans. At some point (…) I’m going to start paying my dad for my line on the family plan. I also need to look into whether my auto insurance is more or less because it’s on the family plan, and either pay my mom or get my own.
Dental care: I’m expecting to have some serious dental work done this year. Depending on how serious, I’ll probably pay for it from some combination of savings and monthly installments–unfortunately, I have only a rough idea of the cost right now.
Clothes: Because I’ve been building my grown up wardrobe slowly, along with my job, it’s a lot of wool slacks and sweaters right now. I’d like to save a bit ahead for spring clothes, as well as continuing to build slowly, and start thrifting and clearance-racking in March or so. Also, in June, I might need some serious formals for work–and while I’m buying them, I might as well buy reasonable quality. Even though I’ll probably troll outlets and eBay, I’d like to save at least $300 for this expense.
Budgeting: I’m pretty confident in my ability to both keep a budget and be flexible about my budget, so my goal is to just continue keeping my records and being more or less as sensible as I can manage to be.
Saving
Short-term goals: My spending plans suggest I need save $3k or more between now and the end of June, in addition to taking on additional monthly payments.
Retirement: I start getting a match in the middle of September, so I want to start contributing enough to get the full match by that point.
Emergencies: Though I’m throwing the largest portions of my savings into my short-term bucket, I keep plugging away at my wee emergency fund.
A car: I drive one of the most miserable pieces of trash you have ever seen. Seriously. One of the windows is crank and the other one is electric. People run into me on a pretty regular basis and I don’t fix the dents because it isn’t worth it. Luckily, because of my lifestyle and its reliance on the Metro, I only drive it a day or two a week, so even though I need to think about replacing it I don’t need to do so with any urgency. After the vacation in March, the next really big thing I’m saving for is probably a new (by which I mean very, very used) car. I have a really elaborate fantasy about saving $4-8k by the beginning of 2009 and buying it whole in cash. I guess we’ll see how realistic that is.
I think that covers those categories. I’ll have the rest next week. Meanwhile… what kind of goals do you have for these areas?
I think of both of these categories as “budgeting.” Every month I save a certain amount towards “long-term fun” (vacations, electronics, furniture, and other expensive stuff), my next car (I also buy very used cars – if you save $50/month when you first buy it, then you can have enough to pay cash for the next one), retirement, and now housing renovations.
I try to take one or two one-week vacations each year. This year I visited another town in my state and I went on a cruise. I haven’t decided what to do next year yet. I don’t see needing any new furniture or computer stuff.
I’m going to continue not buying a car. (I like to buy them ten years old and keep them as long as reasonably possible, which I expect to be about ten years. My car’s “only” 17 years old and still doing great, so even though I hate the way the seatbelts and doorlocks work, I’m going to keep it.) So buy the end of the year I should have $600 more toward the next one.
I’ve just started saving for renovations. And I want so many! First, I’ll get an inspection to see the current shape of my house. Then I’ll get an architect to make a long-term plan. Next will probably be making a laundry room of some kind, moving the washer out of the kitchen into the this laundry room. We’ll put a baker’s rack or something in the hole.
Next will be adding a cabinet where the washer was, adding a dishwasher, and replacing the countertop covering it all.
Then maybe a screened-in porch along the back. Or re-doing the wiring or plumbing may have to happen.
Of these, I should be able to afford the inspection and maybe the architect’s plan next year. I may divert some of my long-term fund money into this also.
Melissa: You’re smart! The first rule of goal setting is to write it down… just like you’ve done.
Numerous studies prove there is a direct correlation between goal setting and success, yet few people take the time to articulate these on paper. Just the mere act of writing it down crystallizes the thought and gives it force. You’re on your way to a prosperous 2008!