2005 In Review: Goals

A few years ago friends of ours initiated a practice of "naming" each new year. While 2004 was definitely not "The Year it All Comes Together" for any of us (a lot of things fell apart in our little circle of friends, but we're all still here and happy), we do enjoy this little ritual every new year's eve.

For 2005 LaLa and I chose "The Year We Get Our Finances in Order" and I think we did pretty well overall. My goals were pretty fuzzy when I started out...most were never truly articulated, but goal setting is one thing I feel I've improved this year so next year I think it will be easier to track progress. I started this blog to make myself more accountable (somehow this really does work) and to share useful experiences (both positive and negative) with others. This blog and the personal finance blogging community has kept me informed and focused all year...all vital components to meeting my goals this year.

So how did I do?

Goal: Get out and stay out of credit card debt - SUCCESS
I would have had this done by March, but I took on some low interest credit card debt to fun a 2004 Roth by April 15th. That took me an additional 3 months to pay off, so by mid-year we were truly credit-card debt free. I'm happy to say that even through the holidays we have *stayed* debt free (with the exception of the mortgage) and continue to be able to pay off our credit cards each month.

Goal: Save at least 30% of our combined income - SUCCESS
Even though we don't have the final numbers of net income for LaLa's freelancing, I calculated that between the two of us we saved $38,000 in 2005. I do know that between us our net income surpasses $114k so we met this goal. Since I believe we only saved $15,000 in 2004 ($12k in my 401k and $3k in LaLa's IRA) this is a big improvement. While I wasn't able to keep to the letter of the 60% budget using my own income alone, the budget did help me stay on target and obviously we did meet our overall goal of saving more than 30% (which is really what the 60% budget is all about)

Goal: Save $10,000 in an emergency fund by end of year - OOPS!
This was the really tough one. When I made this goal back in March it was a stretch even then. Halfway through the year, my company instituted a 7% paycut and reduced health and dental coverage from 100% to 50%. So I suddenly had $800 less a month in my take home pay. Fortuitously I was already through paying off my credit cards (whew!) but without cannibalizing my 401(k) I just couldn't even come close to this goal. Given the situation at my company this is my #1 goal for 2006 (more on that later)

Those three goals were by far the most compelling and best articulated. I feel pretty good about the progress we made this year, but I intend to push harder next year. Not having credit card debt is by far the most satisfying of all our accomplishments this year...it's truly like a weight has been lifted. That alone makes 2005 feel like a big success.