A year in Review: 2016 Financial Goals

Whoa! It’s almost the end of 2016! That means we need to check in and see if we gloriously passed or miserably failed with the Financial Goals we set last year.

If you haven’t seen this done before, we publish our goals to hold our self accountable and periodically check in on our progress. We are currently working on goals for 2017 and will share them early next year (in addition to financial goals we are going to set some personal goals as well).

I highly recommend thinking about what you want to accomplish every year and THEN put a plan together to actually make it happen! The benefits have been impressive and it definitely helps with habit formation.

2016 Financial Goals – Pass of Fail?

2016 Goals: Investing

401K

This is one area we failed to meet our goal in 2015,  goals for 2016 are:

• Wife – 12% contribution rate by end of year (2% increase)
• Me – 11% contribution rate by end of year (3% increase)

Goal: Passed!

Mrs. AE is rocking 13% and I bumped mine up to 16% after getting a raise a few months back. We have kicked lifestyle inflation to the curb this year and put all of our raises to work for us. 

Roth IRA

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)

Goal: Passed!

Our combined contribution in 2016 was $9,530, over $4,000 higher than our goal. As I predicted, the jump came primarily from ESPP sales and a small bonus. We actually had a tax bill vs a tax return in 2015 though.

Emergency Fund

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.

Goal: Passed!

We put $125 into our Emergency Fund every paycheck until December and hit our goal of $10,000. I dropped our emergency fund goal from 12 – 10K earlier in the year after developing an Emergency Plan.

2016 Goals: Debt Reduction

Student Loans

Increase monthly payments by 10% (roughly $100 a month) and make 2 extra $500 principle 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.

Goal: Passed!

We made a TON of progress on my student loans this year. I don’t have the final number yet, but we have easily paid off an extra $5K in Principal. Will have the exact figure in my year-end Net Worth review.

Debt Management

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)

Goal: Passed!

We didn’t take on any new debt in 2016! And also reduced our interest rate on our mortgage via a refinance!

2016 Financial Goals: Income

Salary

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.

Goal: Passed!

Our combined salary grew by over 12% in 2016. Even more impressive is Mrs. AE raking in an extra $7,500 in overtime pay on top of the 12%. It helped us cover an unexpected tax bill, get Lasik for her and buy a water softener.

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.

Goal: Fail

While I did do a ton of work on this site, it is not a significant generator of income yet. And is DEFINITELY not passive. I didn’t add to my REIT stock positions either. Will need to re-think this going into 2017.

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.

Goal: Fail

We looked for a few months earlier in the year and realized we needed more capital to get this started. The market is hot around the Twin Cities, too much competition. We are looking at a few other options to generate income for our LLC in the mean time. Hope to have more updates in the next 3-4 months.

Random Goals

Do 3 projects that increase our homes value (myself)

Goal: Fail

I did some landscaping in 2017, but didn’t quite finish it up. I did build a few things that saved us some cash, but they did not directly increase our homes value. The hours dedicated to this site definitely had something to do with this one.

Review insurance policies – make sure we are still getting competitive rates

Goal: Passed!

We went through our auto and home insurance and found out we were getting very competitive rates with all the bundling discounts. Whoop! Don’t need to look at this for another year!

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

Goal: Passed!

With the baby coming in March, we have both increased our insurance policies through our employer. I think we are adequately insured right now, but will revisit in late 2017.

Identify new financial opportunities – off the top of my head – P2P lending, CDs, Dividend Growth Investing– I will definitely write about my findings

Goal: Fail

I didn’t look to far into new investment opportunities. We are focussed on maxing the tax advantaged accounts for the next few years. Back burner for now – but will keep my eyes open for anything super interesting.

Overal Grade: Pass!

Even though we didn’t hit em all, we are still super excited about the progress we made this year. The wins in our 401k/Roth/Debt Reduction far outweigh everything else on the list. We feel secure with a fully stocked emergency fund and are looking forward to finalizing our 2017 goals!

Do you set Financial Goals? If so how did they turn out?