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Recently, a coworker and I were talking over lunch at Chipotle. Of course, I chose Chipotle because I’m a shareholder (full disclosure), and my wife had given me a Chipotle gift card from Cardpool for Father’s Day (shameless plug). While we were chatting, he asked me what my biggest financial goals have been over the years.
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In between the savory bites of my chicken burrito, my mind began to wander. I started thinking about the financial goals that I’ve set for myself since graduating from college.
My First Financial Goal: a Job
While in college, like most of my peers, my #1 financial goal was to secure a job before graduation. Graduating during a recession in 2002 was tough. Jobs were scarce, and salaries were low.
I was fortunate to receive not one, but two job offers shortly after I graduated. One job was working for a mortgage broker, which would have used my finance degree. However, the pay was less than $30,000 without any benefits. Of course, I wanted to utilize the degree that I had just paid for. But, the people who ran that company made it sound like a sweatshop, cranking through mortgage documents all day long. I didn’t feel really comfortable with the environment and declined that offer.
It was probably a good thing in hindsight, considering the direction the mortgage industry went during the Great Recession.
The other job offer was working as a claims adjuster for an insurance company. Keep in mind, at the time, I couldn’t tell you the difference between a fender and a quarter panel on a car. However, I took a leap at the insurance job, mostly because of the slightly higher salary and the healthcare benefits.
My Next Financial Goal: Contributions
Once I obtained that job, I shifted my financial goal towards contributing enough to receive a match from my 401(k). Admittedly, that was a bigger struggle than it should have been. But, like most new graduates, the allure of making your own money for the first time and showing it off can be difficult to resist at times.
Related: How Much Should I Have In My 401(k)?
My Next Financial Goal: Buying a Home
Additionally, I was determined to buy a home and move out of my parents’ place. Because of that, I was disciplined. My eyes were on the prize. I got my friends on board with my idea, too. I assured them that if they moved in, we could throw parties at our place instead of going to bars and getting overlooked by women while paying for overpriced beers. It was an easy sell. 🙂
It took a couple of years, but I finally bought a home in 2004, thanks to a shady mortgage company that gave me way too big of a loan. Luckily, I was able to make the payments by collecting rent from the housemates who I crammed into my home.
My Next Financial Goal: Increasing Contributions and Mortgage Payments
As I got older, my financial goals continued to evolve. I started to get more breathing room as my salary slowly rose. I began prioritizing my contributions by putting any excess money towards maxing out my Roth IRA. Then, I started applying the extra money that I made towards my mortgage.
Related: How Much the Average American Has in their IRA
In 2012, I made my last mortgage payment and began to increase my 401(k) until I finally maxed that out in 2013, for the first time.
My Valuable Lesson on Emergency Funds
However, there have been hiccups along the way. I learned an incredibly valuable lesson about needing an emergency fund, when my car died in 2009. At that point, I was scrambling. I had to borrow my sister’s car and then had to borrow money from my dad in order to purchase one.
Related: Why You Need an Emergency Fund
Not one of my finer financial moments in life.
Unsure of What To Do Next
Shortly after I paid off my house and began to max out my 401(k), I felt a bit lost in regards to my next financial move. If you’re like me, being able to set specific goals each year is vital for ensuring that I am staying on track in my financial journey.
However, for some time, I felt anxious because I couldn’t decide what my next financial goal should be. There is some really great advice out there in regards to paying off debt, which accounts to max out, and how much to contribute. However, once you knock those out, you get a mixed bag of advice on what to do next.
Some people say, “Keep doing what you are doing, so you can reach retirement even earlier.” Others say, “Ease off the gas, enjoy life, and spend a little bit of money.”
Our Current Financial Goal: Increased Savings
It took us some time to figure out exactly what to do next. Eventually, my wife and I determined that our new financial goal was to save 70% of our take-home pay.
For those who have been following, we have been able to save 65% of our take-home pay over the last two years. But, we haven’t been able to get over the hump.
Unfortunately, through the first quarter, I still am having trouble reaching that goal. I still have hope that we can reach 70% by the end of the year, but we shall see.
Related: My 2018 Goals: 1st Quarter Recap
While my financial journey has not been linear, it’s been a fun ride so far, and I have learned a lot along the way. I plan to continue to set new financial goals each year and hope to continue growing during each phase.
One way to increase your savings rate is by increasing your income. That way, the increase in rate will not be felt as much. 🙂
One financial goal for me is to develop a consistent charitable amount to donate every month.
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That’s a great point!!! If you can figure out ways to increase your income that is definitely the best way to increase your savings rate 🙂
Great list, our path has been very similar thusfar. At the moment we are trying to maximise the saving and investing side a bit more. Figuring out how to be able to give more is also an awesome way to approach it. I like the basic steps the post gives as it illustrates that time is involved but also that anyone can do it.
Glad you enjoyed the post and sounds like we have similar paths. That’s so cool 🙂
Great financial goals you have there.
I’m torn between paying off my mortgage or using that money to try and build some passive income.
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You’ll have to let me know what you end up doing. Personally, I don’t think I want to get back into the real estate market but that’s me 🙂
My number one goal is cash flow our domestic adoption this year. It will probably cost another $25k and I don’t want to reduce my retirement savings. Trying to do both may not work, something may have to give.
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Wow thanks for sharing Jason!!! I’ll definitely be praying for a smooth process and hopefully minimize costs 🙂
For the coming year (school year, since we’re both in education), our goals are paying off the last student loans and saving a hefty down payment for our next home. With my return to work, both should be very attainable, so that’s exciting! I agree; goals are key in finance as anything else. We would be in a much better financial position if we had set more concrete financial goals early on.
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Congrats on the awesome goals Mrs. COD!!! Paying off your last student loans and saving up for a house are incredibly exciting!!! Can’t wait to hear when you make the final loan payment 🙂
My #1 goal financially is to keep on saving as well. We’re currently at 70% savings rate and hopefully we can keep it at that rate for the rest of the year. We are looking to buy a home here in the SF Bay Area and we need all the savings we can get by how crazy high the prices for homes around here.
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Wow saving 70% in the SF area is incredibly impressive. Can’t wait to hear when you buy your home. It’ll be fascinating to see how far you can stretch your money in the SF real estate market 🙂
My aim this year is to reach £100,00o income and save 40 of it as I want o put a deposit down on a bigger house as my pension. I am going to have to work so hard but I am determined
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