Financial Goals Update as of September 1, 2008

This is the second installment of my monthly attempt at goal planning. The main point of updating my goals once a month is to keep myself accountable. I’m hoping that if I write about my goals monthly, I will stay on track with the reverse of out of sight out of mind. A list of my goals and the most recent update of my financial goals can be found at my goals page.

Finish saving for 20% down payment on condo ($59,056.76/$59,056.76)

As of the beginning of September I am finished saving for my condo down payment, three month assessment slush fund and closing costs and a full month early. Woot!! The final selling price of my condo was determined during August, which allows me to calculate an exact value for my 20% down payment. The three month assessment slush fund was already known, however, my closing costs are still not finalized. I was given a range as to what my closing costs could be and to determine the goal for my down payment I took the high end of the range.

The target number increased from August 1st to September 1st due to confusion on my part. I was credited with a full year of assessments by the builder as an incentive to purchase my condo. I assumed this credit would be applied to the selling price of the condo, however, it will be applied to my down payment/closing costs. This slightly increased my down payment, but greatly increased my savings available for my goal.

Set up and fully fund a solo 401k ($0/$7,836)

I have yet to set up a solo 401k for my self-employed income. I have done some research on my available options for a solo 401k. I will be requesting information from Fidelity and T. Rowe Price about setting up a solo 401k, however, I am still hoping Vanguard will offer a solo 401k by the end of the year. I have until December 31, 2008 to set up my solo 401k and still fund it for tax year 2008. For the same reason, I believe Vanguard will be pushing hard to initiate a solo 401k account by the end of the year.

My goal for the solo 401k was increased this month as I received more self-employed income, which increases my maximum contribution.

Fully fund my Roth IRA ($0/$5,000)

I am hoping to be able to fully fund my Roth IRA by the 2008 income tax due date. I have decided to fund my solo 401k before my Roth IRA for tax sheltering purposes. If I don’t put all of my self-employed income into a solo 401k, then I will have to pay taxes on both sides of the Medicare and Social Security.

Save for an 3-month emergency fund ($0/$TBD)

I decided to change my emergency fund from a 6 monther to a 3 monther. After I save up a 3 month emergency fund, I will decide whether or not I want to extend the emergency fund to 6 months based on my job security. I don’t know what the exact value of the emergency fund will be because my mortgage payment and property taxes have not been determined yet. I have to factor in assessments and utilities as well. I will come up with an exact value in the next month or two.

Wrap-Up

I’m extremely happy to have reached my down payment goal. It’s a huge relief to know that I have the money for my down payment and that I don’t have to use my Target stock, although Target is beginning to rebound. I will start saving for my solo 401k after I have purchased everything that I consider a necessity for my condo. Although I may reward myself with a few things that I want after saving so hardcore for the past 10-months.

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2 Responses to Financial Goals Update as of September 1, 2008

  1. Interested Investor says:

    Will it just be condo supplies and personal want items that you want to purchase or are you thinking of anything else in the near future? What are your life plans/goals after condo purchase?

  2. pfstartupblog says:

    I just made my first “want item” purchase with a big screen tv for the condo, which I will blog about in the near future. I have numerous other purchases for my condo that I have to buy like stools for the island, tv stand, foreman grill, trash can, etc… I will also begin saving for some trips to visit friends across the US. Foreign traveling is unfortunately not in my immediate future.

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