It’s the time of year when we are bombarded with messages of New Years’ resolutions and goals. I’ve been reading about them all week, hesitant to establish any New Years resolutions myself. Why? Because I kept telling myself that my layoff has put me into a career transition and has put our debt-free aspirations on hold. Our monthly financial goal has been to break even between income and expenses. I felt that I couldn’t set any 2014 goals until we got a steadier income. I was waiting for a steady, full-time job, to make me feel as though we could count on enough income to set goals. The truth of the matter is that, although I have been looking for a job in my field, I haven’t been looking very hard. I have been keeping my eyes on job listings and networking, but have mostly been focused on gaining skills to work in estate planning and elder law, on growing a business with my husband, and trying to make ends meet by freelancing when necessary. But this career transition is really no excuse for being satisfied with “making ends meet” each month. It’s time I stopped pretending that “transition” is an excuse, and I embrace it as a lifestyle.
I’m a bit of a perfectionist, so of course I want to do everything in 2014. I needed a framework for focusing in on the most important resolutions. To that end, I borrowed the first step from Crystal Paine’s free ebook, Time Management. (You may know her as the Money $aving Mom). The first step in the book is to write down a list of your priorities. Understanding your priorities will help you manage your day into time segments that honor those priorities. In that vein, understanding my priorities helped me honor them with my resolutions.
I then listed ambitious goals for 2014 that honor my priorities, but knew that it was missing a step. Once I achieved those goals, my priorities would continue. For example, there is almost no way that we could pay off all of our student loans next year (despite my wildest dreams about our new venture!). As Gretchen Rubin (best-selling author of The Happiness Project and Happier At Home) points out, “[Y]ou achieve a goal. You keep a resolution.” That is, the resolutions are the behavior that leads to achieving the goal. So, I set out the intermediate steps that I hoped would help me achieve the goals, although I hope to keep the resolutions even if I have already hit the goal.
After all that is written indelibly, I love how Ali Edwards distills her hopes for the new year down to “One Little Word.” Each January, she chooses “a word that I can focus on, mediate on, and reflect upon as I go about my daily life.” Now is the time, and she recently posted her 2014 word. To read it, click on over. But be sure to come back, to find out my “One Little Word” for 2014.
I’m only yammering on about this process because I hope it might help those who are undecided about their goals for 2014. Without further yammering, here are my financial priorities, resolutions, goals, and word for 2014.
Priorities. The financial issues that are the most important to me are:
- Effectively manage my time. This not only entails focusing on work better, but also focusing on the work that provides the highest return on my investment. I spend a good deal of time on this blog and reading other personal finance blogs and books because I enjoy the topic. I am not making much money from this blog, though, so I should consider blogging a hobby until it pulls in enough income to justify the time I spend on it. On the other hand, I have freelance work that I hate doing, but it pays me by a good hourly rate, so I should focus more of my time on doing that work. Additionally, I really want to practice estate planning and elder law, and people are interested in hiring me. I haven’t gotten into that business yet because I claim to not have enough time to set up the necessary logistics (malpractice insurance, IOLTA account, etc.). But, estate planning for my own clients will pay me more per hour of my time than the freelance work — and I will be enjoying what I’m doing. I do enjoy this blog, so I don’t want blogging to suffer, but I need to figure out how to put the money-making activities to the forefront.
- Get in a financial position to buy a home in 18 months. I want to move to my hometown, a community where I feel a sense of belonging and that has an excellent school system. Ideally, we would move right before our son is old enough for kindergarten there. Unfortunately, rental stock in that town is low and home prices are high. We are looking for rentals, but in the event that we can’t find one suitable, we hope to find a really out-dated, but functional, home that is in a nice neighborhood. Our plan would be to slowly renovate and add on as the need and funds arise. Getting in a position to buy a home is good for us in many other ways, so even if we don’t end up buying, it will be a great benefit to our family if we increase our net worth.
- Pay off all of our student loans. It’s no secret that the $193,000 of student loan debt weighs heavily on me. I certainly don’t think that we can pay them all off in 2014, but eventually paying off all of them is an enormous priority. Our student loan payments total over $1,300 a month, so paying off these loans will lead to great financial freedom.
- Contribute the maximum to our Roth IRA’s. Although IRA’s are retirement savings accounts, you can withdraw the entire principal of a Roth IRA without penalty. Also, you can only contribute $5,500 per year per person, so it’s important to make an annual contribution before losing the opportunity. I do like to have an emergency fund around, but if there is a choice between parking our emergency fun in our IRA’s as a 2013 contribution and not making a contribution at all, I’l park it in the IRA because it’s better to make the contribution with the risk that we would have to withdraw it than not make the contribution at all. For those reasons, our Roth IRA’s are our first stop for parking our savings.
Resolutions. In 2014, I resolve to honor my priorities by implementing these behaviors:
- Do better than break even financially each month.
- Establish a daily routine that effectively balances my time between income-earning and career-growing activities.
- Go to bed earlier and get up earlier, to help me better focus my time.
- Focus extra income from now until April 14 on contributing $11,000 to our Roth IRA’s.
- Focus extra income from April 15 to December 31 on paying off another loan.
- Limit unfocused internet time to 30 minutes each day.
Goals. At the end of a year implementing my resolutions, I hope to accomplish:
- Earn as much in 2014 as my prior job’s annual salary.
- Pay off two student loans ($24,000).
- Contribute $11,000 to our 2013 Roth IRA’s.
- Grow our small business enough for its own revenue to sustain itself.
- Grow this blog to justify the time I spend.
All of these lead to my one word for 2014: Growth.
Growth in my knowledge, in my career, and in our financial net worth.
There you have it, folks. All you needed to know about my financial priorities, resolutions, goals, and word for 2014. What are you hoping for in 2014? Care to share your word?
Image by jannoon028, courtesy of FreeDigitalPhotos.net
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