Fabulous Financials

If there’s one thing I’ve learned from my 2008 goal review, it’s that the best laid plans can be affected by things outside of my control.  I have to take it all in stride and roll with the punches.  But then the rigid, overachieving side of my brain reminds me, “he who fails to plan, plans to fail” - and failure is NOT an option for Single Ma.  So here’s my attempt at planning for 2009:

1. MAXIMIZE INVESTMENT CONTRIBUTIONS
Despite market fluctuations, I will go against my better judgment (read: emotions) and contribute the maximum ($23,500) to all of my investment accounts by December 2009:

• 401k: $16,500 is the ‘09 max - $635 per pay period
• IRA (Roth if still eligible): $5,000 is the ‘09 max - $192 per pay period
• BabyGirl’s 529: $2,000 is the tax deductible max - $77 per pay period

All contributions have been set up for payroll allotments.  Barring any major emergencies or shift in priorities, I’ll leave them on autopilot for the entire year.

2. MEET ALL PERSONAL SAVINGS GUIDELINES
In order to meet the personal savings guidelines I’ve set for myself, I need to save at least 25% of my “net” income (assuming it’s ~$75k).  This percentage includes the “after tax” investments in #1 (IRA and 529), so I need to save an additional $11,750 by December 2009:

• E-fund: $5,200
• Non-Retirement: $4,550
• Other (#3 below): $2,000

The e-fund is setup for a payroll allotment of $200 per pay period.  The second will be funded by manual savings contributions when there is a surplus at the end of the month and the last will be funded by one of the two extra paychecks in the year.

3. SAVE $2,000 IN “BABYGIRL’S SENIOR YEAR EXPENSE” ACCOUNT
Wow, I can’t believe I just wrote that.  In September 2009, my BabyGirl will begin her senior year of high school.  Class of 2010 baby!  So you know what that means?  Lots of fun expenses!

• SAT prep course(s) and SAT
• Campus visit(s)
• College application fee(s)
• Prom
• Homecoming
• Pictures (prom, senior class, sports, activities, etc.)
• Class ring
• Fun: senior trip, graduation party, graduation gifts, etc.
• Misc: cap/gown, year book, memory book, school paraphernalia, etc.
• What did I miss?

BabyGirl is my only child so I will spare no expense.  Provided her grades are up to par, she will participate in everything senior year related - gosh I hope I don’t regret writing that.  By the end of December 2009, I will save (and probably spend part of) $2k for planned senior year expenses.  As mentioned in #2, this will be funded by one of the two extra paychecks in the year.

4. EARN $500/MONTH FROM ONLINE OPPORTUNITIES
Last year, I would say this was an easy breezy target because I earned more than 2x as much.  This year…hmm…I don’t know.  I think it’s a stretch goal because I’m slowly losing my spark for blogging.  Not only do I post less frequently, but I’ll admit, the quality of my writing is slowly diminishing.  These two things combined result in less traffic, fewer advertising request, fewer collaboration requests, and generally less exposure to parlay other opportunities.  I don’t know what’s wrong with me.  Wait, I do.  I know these are the kind of posts you all want to read, but I just don’t have it in me right now.  Am I losing my passion for personal finance or simply getting bored?  Whatever it is, I hope to get my mojoe back soon.

5. ENJOY ONE “MAJOR” VACATION
This year, I will not restrict myself to a specific location or time of year.  I’m wide open to possibilities - even last minute excursions.  The only limitations to this goal are:

• minimum of 7-14 days
• cost less than $5,000

Ideally, I’d like to visit Europe.  I’ve been wanting to see Paris and London for almost 2 years now.  However, a cruise or any Caribbean island will suit me just fine.  This will be funded by windfalls and alternative income sources (i.e. non-salary) throughout the year.

7. REMAIN NON-MORTGAGE DEBT FREE
I’ve been non-mortgage debt free since November 2007, but this is so important to me that it’s worth repeating every single year.  No debt.  No debt.  No debt.  Got it?  Good!

8. NET WORTH
Although I failed miserably last year, I will go on a limb and try to hit that $200,000 target again by the end of 2009. That’s an increase of over $37,000.  Don’t laugh, it’s worth trying! LOL

By the end of 2009, I plan to save $35,000, earn $6,000 in alternative income, and spend $5,000 on FUN - a nice balance.  I hope everyone has a prosperous 2009!

G’morning!

Today is my first day back in the office after having 12 days off.  *pause for effect*  12 days man.  12 days.  Wow.  How in the heck did I make it here this morning? LOL  At any rate, I am thankful to have my job in this current economy, especially because I love what I do, so I’m going to count my blessings and get back to the grind.  In the meantime and in between time, let’s review my progress on the SMART goals I set in 2008.

1. SAVE 6 MONTHS CASH RESERVE - DONE+

My goal was to have a cash reserve of at least $15,000 by 30 April 2008.  Not only did I meet the goal, but I knocked it out the box!  The economy created too many unknowns for my comfort level, so I increased my efund to cover one year of basic expenses.  As of 31 Dec, my cash reserve is approximately $24,700.  That’s almost $10,000 more than planned.

2. INVEST MAXIMUM 401K CONTRIBUTION - NOT QUITE

My goal was to invest $15,500 in my 401k by the last payday of 2008.  I did NOT meet this goal, but it was by choice.  Due to the emotional roller coaster caused by market fluctuations, I reduced my 401k contributions late in the year: from $574 to the maximum for full employer match.  In total, I contributed approximately $14,360.  A shortfall of more than $1,000.

3. INVEST MAXIMUM IRA CONTRIBUTION - DONE+

My goal was to invest $5,000 in my IRA by the last payday of 2008.  Not only did I meet this goal, but I surpassed it - unintentionally - because of an early payday that was scheduled to fall on Jan 1.  In total, I contributed $5,220, $220 more than planned.  I’m meeting with my accountant next week to discuss Roth eligibility.  He’ll advise what to do with over payments: withdraw or apply to my 2009 contributions.

4. INVEST MAXIMUM 529 TAX DEDUCTIBLE CONTRIBUTION - DONE+

My goal was to invest $2,000 - the maximum tax deductible amount - in BabyGirl’s 529 college savings account by the last payday of 2008.  Same scenario as above, I met this goal and surpassed it.  In total, I contributed $2,085, $85 more than planned.

5. INVEST IN NON-RETIREMENT ACCOUNTS - NOT QUITE

My goal was to build a diversified portfolio with a value of at least $5,000 by the end of 2008.  Due to a change in priorities (see #1), I didn’t get started on this goal until late in the year.  Around mid-October, I finally saved $3,000 to open a Vanguard account.  As for the actual “value” - laughable, courtesy of the stock market.

6. WORK LESS, LIVE MORE - NOT QUITE

My goal was to take three vacations in 2008.  I was supposed to take one in the spring, summer, and winter.  Uh…that didn’t work out as planned.  SUCH IS LIFE!  Instead, I took one real vacation and 2 extended weekend trips - all within one summer.  Can’t say I regret a thing!

7. REMAIN DEBT FREE - DONE!

This was probably the easiest goal of all, part luck and part determination.  Luck because I haven’t suffered any major emergencies that my cash flow or emergency fund couldn’t handle.  Determination because I’d adjust my lifestyle to the bare minimum before resorting to consumer debt again.  I do use credit cards for daily purchases, but I pay the balances in full.

BONUS: $200,000 net worth- NOT HARDLY

In review of my annual 2007 net worth summary, I had the bright idea of adding one more goal to the list.  I wanted to increase my net worth by $67,000 from $132,857 to $200,000.  Whew, that was a stretch! LOL  And we all know I failed miserably at this one.  Based on my December 2008 net worth [$162,845], I fell short by $37,000.  However, it was $30,000 or 23% more than my December 2007 net worth [$132,857].  That isn’t exactly what I was striving for, but all things considered, it could have been worse.

SUMMARY

By the end of 2008, I planned to save $30,000 (eFund, 401k, IRA, 529, taxable investments) and spend $10,000 (three vacations) for a total of $40,000.  In reality, I saved over $36,000 and spent approximately $3,500 on vacation travel.  And my net worth is still hanging on!  Overall, I give myself a “C” for 2008.  Now I’m looking forward to all the fabulousness 2009 has in store.

Last week, I finally committed to opening a Vanguard account by the end of December.  I was going to consider it a little Christmas present to myself, but due to recent events, it looks like I’m going to get my wish early.  Since adding the goal meter, the following has occurred:

• I mentally reallocated ~$2k from my RE fund to my Vanguard fund.  If needed, I have $20k in a real emergency fund, so I can always re-build the RE fund later.
• Interest earned and credited to my account.
• On payday, I decided to tighten the bootstraps for the month.  When I’m focused on a goal, I don’t have time to be messing around.  No salon visits, no spa visits, no wine, no shopping, no hanging out, nothing.  I transferred $600, leaving only a few hundred to go.  At this point, I knew I’d reach my goal faster.  I was betting on November.
• A few days later, I verified that all bills due in October were scheduled via online billpay, all important expenses could be paid with cash on hand, and there would be another payday between now and the first when bills are due again.  I transferred another $600.

Bingo!  This last move gave me exactly what I needed: $3,448.81 to be exact.  To buy the fund I want, I need a minimum $3,000 to start.  Now all I have to do is wait for the transfers to clear, then I will open my official non-retirement investment account by the end of this week.  Fabulous!

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On January 1st, I established seven S.M.A.R.T. goals (and a bonus) for 2008.  I can’t remember where I read it, but someone in the blogosphere said my goals were “lofty.” LOL.  I laugh because I think a lofty goal is something you would like to achieve one day, but it’s so far fetched, you have no idea where to begin.  Such as someone saying, “I want to be a millionaire.”  While it’s possible to become a millionaire, it’s a lofty goal because many want it but only a few know how to achieve it.  Then again, millionaires may think earning that first mil was easy. *shrug*

I guess it’s all relative because *I* think my goals are pretty simple - they are specific, measurable, achievable, realistic, and time based.  In other words, I have logical plan to achieve each and every one of them.  Besides, once I make up my mind to do something, I do it.  Period.  With only 3 full months left in the year, here’s a check on my progress…

1. Save 6 months cash reserve ($15,000)

CHECK! I’ve met and exceeded this goal.  My e-fund sits comfortably at $20k, plus ~$2k extra for rental property emergencies.  With the e-fund complete, I’m undecided on what to focus on next because I’ll never stop saving.  I float between adding extra funds to the RE account or building the non-retirement account.  Decisions, decisions…

2. Invest maximum 401k contribution ($15,500)

CHECK! On schedule and as planned, I contribute a fixed amount each pay period, which will allow me to achieve the maximum contribution on the last pay day of the year.

3. Invest maximum Roth IRA contribution ($5,000)

CHECK! On schedule and as planned, I contribute a fixed amount each pay period, which will allow me to achieve the maximum contribution on the last pay day of the year.  My only concern with the Roth is that I need to make sure I am allowed to contribute the max this year.  The 2008 AGI limitation for maximum Roth contributions is $101k.  Although my income exceeds this amount, I’m not sure where my AGI is going to fall.  If I go over, I’ll have to withdraw the excess before the cutoff in March.

4. Invest maximum tax deductible 529 contribution ($2,000)

CHECK! On schedule and as planned, I contribute a fixed amount each pay period, which will allow me to achieve the maximum tax deductible contribution on the last pay day of the year.  One problem though.  Due to my advanced procrastinating skills (I’m so proud of myself), I won’t be able to claim the state tax deduction because my lazy behind never opened a VA 529.  All year long, I’ve been contributing to BabyGirl’s MD 529 account - and I’m NOT a MD resident anymore!!  I figured, it’s better to contribute to something than nothing at all.  Right?  Wonder if I can roll it over to a VA 529 account now and still claim the deduction in April?  Hmm…

5. Invest in non-retirement account ($5,000)

BUST! My plans were derailed with my rental property debacle - 1 month to clean and 2.5 months to rent.  I think I spent pretty close to $5k in repair and carrying costs alone, but all is not lost.  I’ve just made an executive decision to redistribute assets. LOL!  I’m taking money from the rental property stash (see #1) and giving myself until December to save the $3k needed to open a Vanguard account.  It isn’t the original $5k estimate, but I’m not trashing the goal completely.  I even put my “goal meter” back up so you all can keep me honest. See! *pointing up*

6. Work less, Live more (3 vacations)

Check, check, and check! I had to change jobs to achieve this goal.  My current job is still demanding, but I don’t work nearly as hard as I did before.  My new boss is more laid back, I’m managing smaller projects (higher quantity but smaller dollars), and fewer people.  The stress level is similar, but it’s due to volume and deadlines, not complexity and oversight.

The down side is less visibility and recognition, slower career growth, and much smaller cash incentives to reward/motivate exceptional performance.  Not usually my speed.  Actually, the type of work is boring, but I’m gaining valuable management experience and I needed this break from the competitive arena.  Maybe in two years, when BabyGirl is off to college, I’ll be ready to jump back into the ring - unless an extremely enticing opportunity presented itself before then.

The bright side is better quality of life.  When I take time off, I really take time off (i.e. no BB or laptop connection) and it’s expected.  I’ve only been at the new gig for 5 months, and since then, I’ve visited Las Vegas and Hawaii.  I’d like to take a winter vacation during the holidays.  Destination?  TBD.  When time and money allows, I also rejuvenate at the spa, solo if necessary.

I’ve rekindled relationships with my beau, my friends, and my BabyGirl.  Specifically with my BabyGirl, I’ve established a monthly Mommy/Daughter day where it’s all about her and we do whatever she wants.  Last year and earlier this year, I found myself so caught up in “work” and “life” that she was “growing up” right before my eyes and I didn’t even “see” it.  Some mistakes are too expensive to repeat.  Thank gawd I’m a quick study!

7. Remain debt free

Check! I’ve been “consumer” debt (e.g. auto loan, student loans, personal loans, credit cards, etc.) free since November 2007.  I have a mortgage, paid for by tenants, and my credit card balances are paid in full every month.

BONUS: $200,000 net worth

In review of my annual net worth summary, I had the bright idea of adding one more goal to the list.  Given the state of the US economy, I could have abandoned this goal, but I’m not a quitter.  Although I’m a long way from $200k, I won’t say this goal is a bust either.  It is important to note that my net worth in December 2007 was $132,857.  As of last month, my net worth in September 2008 was $160,454.  That’s a 21% increase in 9 months - during a bear market!  Considering the circumstances, I’m quite pleased.

Ahem, now about that 2008 “to do” list…

How are you doing with the goals you set in January?

Lots of random thoughts, so I’ll do a random update post:

Unexpected Money

When I filed my taxes this year, I had to claim the relocation benefits I received from my last employer as income, but I couldn’t write off the relocation expenses as deductions. Weird, I know, employer requirement, hard to explain. Anyhoo, because of this, I had to file a separate form with my employer and they have a process to evaluate what my tax liability would have been without the extra income. Any excess between what I paid and what I should have paid is sent to me via a refund from the employer, not Uncle Sam. Long story, short. I received the unexpected refund this week. Over $1,200.

Emergency Fund

As of today, I made the final transfer to meet my $20k e-fund goal! Because of the unexpected refund above, the balance now sits at $20.7k. I also set up a $100 bi-weekly payroll allotment for the e-fund. All extra above $20k will be earmarked for “non-retirement investing.” When it reaches $3k, I will open that long awaited Vanguard account, then redirect all extra money to to the new account.

Payday

My payroll problems were finally corrected. Benefits, tax exemptions, allotments, 401k match, retro payments/refunds, etc. - everything is kosher now. Thank da lawd! July has 3 pay periods and I plan to spend the extra cash on my rental property.

Medical Expenses

As of yesterday, the braces are completely off. BabyGirl was given two sets of retainers plus a night guard. I also made the final $250 payment, a total of ~$4,000 for 2 years of orthodontia care. Her teeth are beautiful, but with all the back and forth visits, I’m glad it’s over!

Precious’ vet bill this year was $248.69, which is $65+ more than previous years ($185 in 2007 and $177 in 2006). I’ve never had an annual vet bill more than $200, so I asked for a line by line itemized report of this year and last year. Although the secretary tried to explain the difference, I had to see for myself. About 10% was due to regular inflation that occurs every year, but one procedure was an additional $40 by itself. WTF! The reason? They send the culture to an outside lab for testing/examination and they have to pay extra for shipping/transportation expenses. In other words = FUEL!! I tell ya, this fuel crisis is hurting everything!

Car Insurance

Due to pure laziness, I didn’t research for better rates. My new 6 month (Jul-Dec) premium is $409.10 and it’s due next week. I thought this was a savings from the $468 that I used to pay, but I forgot it was reduced to $406.30 last December when I increased my deductible from $500 to $1,000. So in essence, this 6 month premium increased by $2.80. Not a lot of money, but it definitely shouldn’t be going in the wrong direction. That’s what I get for being lazy. I’m going to pay the premium in full this time, instead of the monthly payment plan. Other than saving the $1 processing fee, I just want one less bill to worry about every month.

Rental Property

My tenants are moving out this month and I’m meeting two potential tenants tomorrow morning for a scheduled tour. One is coming at 10 and the other at 11. It’s a 2 hour drive and I’m not looking forward to it. After the last tour, I’m meeting a girlfriend for lunch. She’s offered to show the property for me in the future, so I won’t have to drive down there again. But if the property isn’t rented by the end of this month, I’m turning it over to a property management company.

Edit to Add: Thank you all for bringing the blog problem to my attention. I appreciate all of the emails. I don’t know what happened to the rest of the post or why it was cut off HOURS after I published. In the original post, I provided a few updates about my summer vacation plans and my feelings about BabyGirl’s summer away, but it’s gone now and I don’t know how to fix it.

While I’m on the subject, I haven’t been blogging regularly because I’ve had quite a few computer issues lately. I don’t know if I have a computer virus or if my blog has been hacked - maybe both. So much for the Norton All-in-One Computer Protection, huh? My spreadsheets are damaged, which means all of my expense tracking and net worth details for the entire year are GONE. I’ve tried to do a system restore and file recovery, to no avail. I also keep getting “404 errors” when I publish or update posts on my blog. And some evenings, I can’t get online at all or the “high speed” connection is extremely slow. The latter may be attributed to the terrible weather we’ve had in the past few days, but trying to get online or attempting to write a blog post is challenging.

It’ll take weeks to get my spreadsheets back in order and I’ll need help with the blog issue, but everything will be fixed - eventually. If it aint one thing, it’s another. But eh, so is life. *shrug*

Blog wit’cha soon.