A few days ago I was having a conversation with my wife and the subject of goals came up. We have a newborn at home, so making it through the day is a goal in and of itself. It’s hard to think about the future when you have pressing concerns front and center. But it did get me thinking: when was the last time I really sat down and thought about goals for myself.
I’m hesitant to admit, it’s been a while. I’ve always had a long-term target of financial independence and getting the most out of life, but in terms of tangible, actionable goals for the upcoming year I was lacking.
In a rare quiet moment I scribbled down some preliminary thoughts, which I then flushed out with more detail later. I tried to utilize the SMART goal framework as much as possible as well as limit them to really focus my efforts on a few areas. I picked three big categories (financial, personal, and blog) and limited myself to four for each category. My hope is that by putting these out there I’ll hold myself more accountable as well. My plan is to revisit these periodically throughout the year and provide updates where relevant.
Financial goals are those that will improve our financial picture in 2018. I’m not trying to shoot for the moon, but would like to leave 2018 in a better position that where we started. As you’ll see below, my focus is being properly invested, sticking with a budget and marching ever closer to financial independence.
Grow net worth (excl. home value) at least as much as the S&P 500
The S&P 500 was up nearly 19% in 2017, while net worth excluding the value of our home grew 22%. I want to maintain that that sort of growth in the new year.
If we’re invested appropriately (i.e. maintain our target asset allocation and index fund investments) and continue to save, we should meet the goal. I think this way is better than static percent growth goal since I can’t control what the stock market will do.
Note: I exclude our home’s value since we just keep it at the lower of our purchase price or market value. Our home makes up about a third of our net worth, so our total net worth “only” grew by 14%.
Stick to my 2018 budget for spending/saving
I’ve been absolutely horrible at budgeting in the past, mainly due to a lack of discipline. We earned good incomes, saved automatically for retirement, but the rest seemed to slip away. Luckily, I had enough discipline to save annual bonuses which is a big source of our accumulated wealth. Our current jobs don’t have bonuses, so have to make our savings all out of regular paychecks. We’ve been doing fine so far, just not quite at the level I’d like.
I’ve built a budget for 2018 that has us spending 63% of after-tax earnings and saving 37%. That’s pretty consistent with our savings rates last year and will allow us to fully fund our 401ks, IRAs and contribute to our kid’s college funds. I’m more concerned with the spending side and making sure we keep it under control. We typically do good for a few months, but then start to slip. I want to keep it front and center.
Grow current percent and reduce time to FI
Assuming a 4% withdrawal rate, we’re currently halfway to reaching FI and will take about 9 years to get there based on 2017’s saving and spending. If I plug in my 2018 budgeted numbers, I get nearly the exact same outputs. That means if I stick to our budget, any growth in the market will improve our numbers. Assuming we’re able to meet goals one and two, we should meet goal three.
Maintain current coverage levels for emergency fund, irregular expenses, etc.
I’ve worked very hard to map our financials to make sure we don’t get pinched anywhere. That means maintaining an emergency fund with at least 6 months’ expenses, having an HSA to cover any high deductible medical expenses and savings for irregular expenses. We’ve done a good job to date of not raiding the places I squirrel money away, and I intend to do the same next year.
I could probably sum these up just by saying “be a better human being” but I’m committed to SMART goals, remember?
Leave work at work
Let’s face it, raising kids is tough and stressful. Having a high paying job is stressful too. I knew I couldn’t do both, so I chose the former. I have no regrets, but have felt some non-kid/work-related stress slipping back into my life outside of the 9-5. Not nearly as bad as before, but I need to keep it at bay post-haste.
Reestablish my weight before we had kids
I’m not in horrible shape, but by no means great shape either. With the lack of sleep and time to work out that came with kids, I figure I’ve gained about 30 pounds since becoming a dad. I have a three-fold plan for tacking this one:
- Get to bed by 10pm every night (no more late night Twitter or blog post writing).
- Wake up early to work out 3 days a week before the kids get up. Even half an hour will be better than what I’ve been able to do.
- Eat more meals at home during the week and keep eating out to the weekends only.
I’m not going for Olympic-level fitness here, but I recognize that continuing to be out of shape as I get deeper into my thirties only puts me at greater risk for long-term health issues. None have popped up so far, but I don’t want to keep risking it unnecessarily.
Weekends for family time, not catching up on chores
When we have major sleep deficits, it’s really tempting for us to just crash as soon as the kids are down to bed. That inevitably leaves laundry, cleaning and other household chores deferred to the weekend. My goal is to keep on top of these on the day of, which will help more easily facilitate the next goal.
Start making some really special memories with my kids
I have a two and a half year old who is just starting to blossom in terms of memory, vocabulary, etc. Now is the time for us to really start focusing on doing fun things with him. He may not remember all of them, but they’ll be part of the framework that will build his personality and character. We’ve already been to a play, the zoo, ice skating (for about 1 min) and lots of other little things. We’ll continue the little things but I want to do a backyard camping trip, a baseball game and the beach this summer. The little one will be in tow for it all hopefully as well.
I started writing this blog late last year mainly as a creative outlet for myself. I’ve built up a wealth of completely random financial knowledge over the years that I wanted to put to paper. Publishing for the world to see would help keep me honest with myself and focused too. I want to make it past the one year mark when most blogs fold just to say I did it. We’ll see what happens after that.
Write 5 succinct, high-quality posts per month, 10 if I can
This one will be a stretch goal for me for sure. I have a full time job, two kids at home and just said I wanted to get more sleep to be healthier. I have a list with two dozen-plus blog posts already outlined, it’s just a matter of finding time to put fingers to keyboard.
I plan to achieve this by focusing on more succinct writing go forward. I tend to write marathon posts that likely fall victim to the TL;DR phenomenon. If I can tighten up my writing, it may also allow me to post more output given my time constraints.
Follow a more consistent posting schedule
I try to post on Wednesdays and did a pretty good job of sticking to it. I slipped towards the end of the year and December was pretty much a non-starter because I was sick. My goal is to write ahead at least a couple of posts so that I’m not racing to write sub-par content just to meet a self-imposed deadline.
Reach a bigger audience
Writing is only half the battle, getting people to actually read it just as important. My unique visitors, page views, and followers on Twitter have continued to grow, but not at an inspiring pace. If I could get 1,000 page views a month and 500 people to follow me on Twitter, I’d be happy. I just want to have someone, somewhere benefit from my experiences and insight.
Build connections with other bloggers
I read a lot of other personal finance bloggers, follow them on twitter, etc. What’s obvious on the surface is this is a community of like-minded people in collaboration, not competition. I feel a bit like an outsider looking in given my tenure and readership, but I aspire to be one of the voices in the choir.
So what do you think of the goals I’ve laid out for myself in 2018? Some are more aspirational than others, but I’m giving all of them a shot. I’ll provide updates throughout the year as milestones are reached, with bigger reviews halfway through and at the end.
Best of luck to everyone in 2018!
John started Present Value Finance in 2017 to share his experiences and insights on personal finance to help people make better decisions and take control of their financial lives.
He achieved financial independence in 2016 by walking away from the high stress world of corporate finance to focus on his family. He’s a husband, father, family CFO, and all around finance geek.