Sunday, December 23, 2012

Auto Pilot Did Not Crash My Finances

Based upon my blogging history, I clearly lost interest in regularly documenting my finances in 2010.  Once I paid off my my credit card and my car loan in 2009 and my private student loans in 2011, a heavy burden was lifted.  My only remaining debt was my federal student loan and I had the luxury of putting my finances on auto-pilot.  I didn't blog because, well, who really wants to read the same boring mundane details of auto-pilot financing every month, much less every day?


Now that 2012 is almost coming to a close, I was cleaning up my financial data and discovered a document I created in 2008 titled, "PF Goals."  I'd forgotten that I'd created the document and was curious whether I'd accomplished goals that I set for myself in 2008.

I'm happy (and pleasantly surprised) to report that I had accomplished all of my short-term goals (1 - 3 years) and a big chunk of my mid-term goals.  I'm also amused that some of my mid-term goals (4-10 years) and my long term goals (10+ years) will need to be revised due to the fact that I will no longer be able to achieve those goals since my circumstances have changed.  (At the time I wrote these goals, I planned to pay off my student loans before I purchased my condo.  But, alas, I ended up buying a condo while I was still paying off my student loans.  Oh, and  the condo was significantly more expensive that I had originally budgeted.  Hence, why I'll never be able to reduce my debt as aggressively as I had hoped back in 2008.  *Sigh*)

I'm a bit freaked out because my mid-term goals from 2008 will now be my short-term goals in 2013.  Some of my 2008 long-term goals are now part of my mid-term goals.  The steady march of time is relentless and scary some times.

Anyhow, here's what my 2008 PF Goals Looked Like:


SHORT-TERM FINANCIAL GOALS (1 to 3 years)

  • Pay off car loan in 1 year (or, if laid off, use severance to pay off immediately)
  • Reduce total debt to $110,500 after 1 year
  • Increase EF to $5,000 after 1 year
  • Increase 401k to $115,000
  • Pay off credit card in 2 years (or, if laid off, use severance to pay off immediately)
  • Reduce total debt to $92,200 after 2 years (Finally under six figures!)
  • Increase EF to $7,500 after 2 years
  • Increase 401k to $135,000 after 2 years
  • Reduce total student loan debt to approximately $74,000 in 3 years
  • Increase EF to $9,000 after 3 years
  • Increase 401k to $157,500 after 3 years 
  • If severance used to pay off car loan/credit card early, then need to save an additional $9,000
As I've mentioned, I've accomplished everything above and then some more.  (Note:  I fortunately did not get laid off so I didn't use any "severance" money to pay off my debts.)

A lot of mid-to-long term 2008 PF Goals are either already accomplished or will unlikely be accomplished so they will need to be tweaked.  The goals that will need to be tweaked because they are already accomplished are in blue.  The goals that will need to be tweaked because they are now infeasible, are in red.  


MID-TERM FINANCIAL GOALS (4 to 10 years)
  • Reduce total debt to $53,700 in 4 years
  • Pay off private SL in 4.5 years  
  • Increase EF to $10,200 in 4 years  
  • Buy my first home in 4-5 years (Age 40-41)  
  • Reduce total debt to $33,000 in 5 years
  • Increase EF to $11,400 in 5 years
  • Increase 401k to $209,000 in 5 years
  • Reduce total debt to $11,000 in 6 years 
  • Increase EF to $12,600 in 6 years
  • Be debt free (except mortgage) in 7 years
  • Increase EF to $13,800 in 7 years
  • Increase 401k balance to $386,000 in 10 years
  • Increase EF to $50,000 in 10 years
  • Increase Roth balance to $33,000 in 10 years
  • I’d like there to be a significant balance in my taxable investment account but no monetary goal at this time. 

LONG TERM FINANCIAL GOALS (10+ years)

  • Buy a new car… in CASH in 7-10 years.
  • Increase Roth balance to $65,000 in 15 years.
  • Increase 401k balance to $667,000 in 15 years.   
  • Increase EF to $110,000 in 15 years.  
  • Increase 401k balance to $1.1 M in 20 years
  • Increase Roth balance to $131,310 in 20 years
  • Pay off mortgage in 20 years.:
  • After mortgage paid off, work towards downshifting career.  See if part time employment possible.
  • I’d like there to be a significant balance in my taxable investment account but no monetary goal at this time. 
  • Buy immediate annuity to replace  10% of cost of living at age 62.  
I guess I should start creating a new PF Goals v.2013.  Maybe in December 2016, I'll look back at the 2013 PF Goals and see what I've accomplished (or not).

3 comments:

enoughwealth@yahoo.com said...

Why are some of the goals (eg. paying down the Federal student loan) "infeasible"? Considering your budget includes $315/mo for phone/internet/cable/massage (which could be replaced with a $15/mo mobile phone plan) surely the goals are feasible, but have just been lumped into the "too hard" basket?

Good work so far though ;)

Shtinkykat said...

Ahhh, yes. I guess I should have written "infeasible based upon my current budget and spending." You're very correct in pointing out that I have excess fat in my budget that can be better used towards paying down debt. But at this time, those are luxuries from that I'm unwilling to part. Thanks for the compliment!

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