Over the summer, I fell off right out of the FI wagon on more than one occasion and migrated towards the YOLO lifestyle. This is never friendly to the budget or to larger financial goals. I was so strong for so long, but when my work routine changed- so did my spending.
First, “Financial Goals” have never sounded fun to me and always seemed to be about saving instead of what I love to do: spend and travel. While I am consciously working on breaking my spending habits that returned over the summer and re-training my gut to support me in being more frugal I have not set financial goals in a serious manner since the start of my path to FI a little over a year ago.
Sure, I have revisited those initial goals. I have even set a few new goals on the Trello app, on a white board, and in my head. Most of them touched on or skated around the idea of money. None of them confronted money head on. This is absurd because money is required for life, but more importantly for one to live life.
The past year of my FI journey has been a roller coaster of growth and change. The most important part of this has been self reflection followed by re-direction. Money is connected to shame, blame and systems of oppression in ways that require some mindset restructuring.
I cannot imagine this will end. Just a few weeks ago I was writing about the lack of restraint I seem to have when it comes to spending money for our animals or the garden. The goals I first set for FI were fuzzy- just like my mindset at that the time. Clouded by money memories, habits, assumptions, social taboos and anxiety I set goals for myself and for my future.
After working on all of these and cultivating observation: It is time to set in place a solid 5 year money plan based on values I hold dear. (Plus I love planning- Money Plan sounds so much better than “Financial Goals”)
Set Value Based Big Goals:
5 Years is a good amount of time to be serious and just short enough to not be “long term”. The goals created for this 5 year money plan needed to cover all of what I find valuable and all of what I must do to be responsible.
This means that the money plan was going to have a goal for each facet of life: career to self care and be rooted in what I had deemed essential to living and thriving.
Categories for Bigger Goals:
- Retirement (RE)
- Debt Payoff/ FI
- Emergency Fund/Savings Goals
- Personal Growth
Of course these may look different for you. For example, we have already bought a home and this is not on my list of goals for the next 5 years, but this may replace the Emergency Fund Category for you. I found that creating the big categories was helpful before creating the actual goals.
Once I had decided on the category it was time to take all of that self- reflecting over the past year and put a plan in place. The one stipulation was that the goal NEEDED to be tied to money. This is, after all, a 5 year MONEY plan. Under personal growth I may have a goal to learn French, but this is not directly related to money.
Let’s start with Career. This could be working up the pay scale, asking for a promotion, or completing the creation of an online course in order to bring up your income. For me, Career is two fold: sometime in the next 5 years I will be transitioning out of teaching and into Remote Work. Thus, I needed to create a career goal for teaching and for building up my resume for the job transition so that when I do move it will not be a drastic pay cut.
Goal 1- Teaching: Complete CTE certification year one. Become Nationally Board Certified year 2 and submit these clock hours to move up to the last pay lane.
By doing these two things in the next 5 years, I will increase my income over 20k. And guarantee an increase for the following years of service.
Goal 2- Remote work prep: Start building writing sample portfolio and design portfolio. Pick up freelance in the summer to build resume for full time remote work.
Again, I will be building my resume, experience, and working a side hustle in the summer increasing income.
Possible amendment: If I find a position prior to my teaching goals – I am going to take it- shifting careers may happen before the 5 year plan with teaching and I am ok with that.
Retirement: (Retire Early)
As a teacher I have access to two pre-tax retirement accounts (403b and 457b). Even if your plan is not to retire early, or you are not a teacher, maxing out a retirement account like your Roth is a good idea for 5 years.
Financially I cannot max out both of my retirement accounts in the next 5 years, but I can max out one and contribute to the other. Over the past year I did open both accounts and began the contributions, but not nearly close to maxing them out.
Goal 1: Contribute $1450 per paycheck into my 457b each year for 5 years.
Goal 2: Contribute $1000 each year to my 403b for 5 years.
All these numbers are pre-tax and since going on strike and the re-negotiation of our contracts I decided not to even see my raise and instead have it go directly into retirement. I cannot tell you how challenging this was for me. I felt so elated when we received our raise. I felt like we had fought for our value, and I was looking forward to seeing that number in my checking account for the first time in my life. Yet, I knew the first time I did – it would be even more painful to make the switch.
As my salary increases, I may adjust these numbers to reflect this as well. Alternatively, I have some smaller savings goals to meet as well.
For some this could look like: reduce debt by 20% or pay off all credit cards. I know some Personal Finance bloggers out there are only focused on debt payoff- which is great! So you may have several goals in this category for 5 years.
Goal 1: Continue to pay off credit cards every month and stay away from the consumerism debt trap.
Goal 2: PSLF program. Stay updated on all forms and renewal. After 5 years I will be 1.2 years away from loan forgiveness.
This may not be on everyone’s list. Or perhaps it is about getting to the beach every year or saving for the trip of a lifetime in a few years. For me, travel is essential to my being and I now have a system to automatically save for it- instead os trying to frantically scrape together the money when I want to go somewhere. I have a small pool of money that grows and disappears every year for travel.
Goal: Leave the country every year. Pay for this travel by having an automatic travel savings every month and travel hacking with credit cards.
Emergency Fund/Savings Goals
Having a more “short term” accessible savings account for emergencies or home expenses has been a life saver for us already. We each have one and I want to get mine back up to $5,000 by the end of 5 years. Other savings goals could be for a home, a car, college, etc. Any sort of saving that needs to go into a short term and accessible account.
Goal: Replenish my emergency fund in my High Yield Savings account. Balance at the end of 5 year should be $5,000 give or take a few emergencies.
I want to make self care a part of my 5 year money plan. This means keeping some of those memberships that help keep me moving and doing. I know that running is free and their is yoga on YouTube, but I also know that I am a social person and have found success in group classes and creating that in person community. These things should be on a 5 year money plan, because if caring for yourself is not a money priority, nothing else will be either.
Goal: A dedicated time and money budget for self care that includes a gym membership, yoga classes and using my medical benefits for massage.
Decide How to Get There!
Once I set my goals it was time to pull out the checklists. I freaking love checklists, so this is a very good thing.
Break down your steps. Do you need to set up the account, talk to payroll, calculate how much you can save every month, budget etc. Make it a goal to accomplish at least three steps on your list per week- or leave yourself at least some type of time sensitive note so your action steps do not get put off.
My favorite app for lists is Trello. I also will use my notes app in the phone and my checkmark emojis if I am making a step by step list for the week. My partner uses To-doist, as it gives reminders and is a bit more insistant than my checklist apps.
My current action steps listed in my phone include:
– Automate a new amount to be deducted for my 403b starting in Nov.
-Renew yoga class card using budgeted funds
Previous Action Steps were to open certain accounts, set up Mint and basically re-work my entire automation system. It took about a month to get everything in “set it and forget it” mode.
Track your Progress and Stay on Track!
Seeing my own growth (even though it is small for right now) and making sure I stay on track are two of the most important factors for the long run. It seems once I set the goals and got things done and rolling, there is a wait time where it is all too easy to get a little bored and slip up.
This is where Mint has come in. I previously used Personal Capitol, however it was being glitchy and for the purpose of setting money goals, a budget and tracking of expenses- Mint was the better choice for me.
Plus it send me reminders when I am doing well, which feels awesome.
Visuals were another step I took to keep me motivated. Over a year ago we bought a large whiteboard for our bedroom. We created our little vision board version that was erasable and could be updated to keep us looking at it. We taped little scraps of inspiration and wrote out our goals. It was so helpful to see every morning and night.
I plan on re-doing my side of the board to reflect my 5 year money plan goals. I will also change it up to keep it fresh, because we all know eventually we start to ignore the picture on the wall and become accustomed to our environment.
Lastly, revisit the goals with others. You could do this via Twitter like I plan to or be super awesome like Angela from Tread Lightly Retire Early and post your weekly triumphs and monthly updates for goals. Not everyone wants to open their pocket book on the public interwebs, and this is totally understandable, but a person to be accountable to works as well. Maybe your running buddy or close friend could serve as your sounding block.
While it is true you only live once, it is also true that in order to live fully and do what I wanted I needed to reverse my bad habits once again. Balance is essential and I can guarantee you I will pick up a coffee one morning or fall behind on a goal- because we are all human. My goals are still value based, so this along with tracking will hopefully help me stay the course.
What do you all use for your organizing and money plans? Apps? Do any of you have an amazing 5 year money plan worksheet to share?