This is one area we failed to meet our goal in 2015, my new goals for 2016 are:
- Wife – 12% contribution rate by end of year (2% increase)
- Me – 11% contribution rate by end of year (3% increase)
My plan here is to increase the % so when our salaries increase, we would max out our 401K contribution automatically. Example: slowly increase to 18%, when our salaries get up to 100K we would be maxed out – 2016 limit)
Increase our combined salary by 10%
This may seem like a lofty goal, but we both work for a growing company with consistent opportunities for promotions. We also have average 4% for our yearly raise each year so we will only need to make up around 6% through promotions. This goal fuels many of our other goals, I calculate the difference in our take home pay and invest at least half of the increase since we are used to living on less.
Increase monthly payments by 10% (roughly $100 a month) and make 2 extra $500 principal payments by end of year
This should knock another 7-8 months off the duration of my student loan repayment plan – the sooner these are paid off – the sooner we can invest another $1000 a month and increase our savings rate drastically.
Increase combined contribution to $5,500 in 2016
This is a $500 increase over the original goal I set back at the start of 2014. We are currently putting $150 every paycheck ($3900 a year), need to increase it by $63 a paycheck to hit our goal. If we hit this goal it will be a combination of increased regular contributions and a few bulk payments when we come into extra money (bonus, tax return, ESPP sale)
Continue putting $125 a paycheck into our emergency fund
This will increase our emergency fund by $3,250 in 2016 – putting the total over $10,000. In our 2015 goal post I thought 12K was enough for our emergency fund, but I want to bump it up slightly due to additional expenses with our new house.
Develop a Passive Income Stream (Stretch Goal)
This blog is my first attempt at developing a passive income stream, I don’t think I will have enough traffic at the end of 2016 to meet this goal but I hope to turn a corner next year. Other ways I plan on generating passive income – add to my dividend stock positions and flip a house to rent under my family LLC.
Flip a house (Family LLC)
We were recently approved by a local bank to purchase an investment property under our family LLC. We are looking right now and I will post about our experiences as this process unwinds. I want to flip at least 1 house in 2016 and start targeting a second one.
This will be on my list every year – Do not pay ANY interest on my credit card – Do not take on any additional debt (outside of 1 existing car payment, student loans and mortgage)
Do 3 projects that increase my homes value (myself)
Watch spending closely – I have accepted that our credit card bill will be over 2K a month, but a few years ago there is no way we could have afforded to spend that much money. I don’t think we are necessarily wasting that much, but I want to make sure unnecessary expenses aren’t piling up.
Review insurance policies – make sure we are still getting competitive rates
Review Life Insurance needs – I haven’t reviewed how much life insurance my wife and I should have in a few years and I expect we are under insured – this may be a post worthy topic depending on what I find
Identify new financial opportunities – off the top of my head – P2P lending, CDs, Whole vs Term Life Insurance come to mind – I will definitely write about my findings
Action Items: Have you written down you 2016 goals yet? If not – do so now! It is beneficial to look back and reflect on the year, it makes you appreciate where you came from and what you now have. Do you do write stretch goals to push yourself harder throughout the year? If you are currently in debt I would make that your primary focus until you are on a clear repayment plan. Please post any other goals you track!