As 2008 came to a close, I began to think about how I did in accomplishing my 2008 goals and how that would effect my 2009 goals. I only accomplished one of my goals, mostly because I didn’t really come up with an action plan to accomplish my goals. I will use 2008’s goal setting experience to better set and accomplish my goals for 2009.
Set up and fully fund a solo 401k ($0/$10,427.33)
I set up a Vanguard Individual 401k on December 26th, which was before the December 31st deadline. Since I beat the deadline, I will be able to fund my 401k until April 15th, the tax filing deadline. It was a pretty painful experience because I had to set up an Employer Identification Number (EIN) and send in proof by the deadline.
Every month I’ve been increasing the maximum value that I can invest for the 2008 tax year as I continued to make more money tutoring. This is the first month that I used a contribution calculator as I’m not able to invest 100% of what I earn, I have to take out certain self-employed taxes. The maximum contribution value is still not finalized, however, as I will modify my net income with the miles traveled for tutoring.
I have not invested anything in my account yet because I was waiting to finish paying off my furniture, TV and buy Christmas gifts. I have some cash left over and will begin investing, hopefully by the end of the month.
Fully fund my Roth IRA ($0/$5,000)
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.
I will most likely not be able to invest in my Roth IRA for the 2008 tax year. I’m not disappointed that I probably won’t be able to fully fund this account. I made the decision to prioritize my condo down payment for this year. It was an extraordinary effort to come up with 20% in such a short period of time.
Save for a 3-month emergency fund ($0/$7,762)
My 3-month emergency fund reflects monthly payments for my mortgage, property taxes, car payment, assessments, car insurance, cell phone, cable, internet, electric bill, gas and food.
For my 2009 goals I might re-prioritize and modify my emergency fund. I’m thinking about dropping my goal down to $1,000 as a true emergency fund. After reaching that goal and saving for my retirement funds, I will try to push it to a 3-month emergency fund, which is designed as insurance against losing my job.
Now that my 2008 goals are in the books, I will start finalizing my 2009 goals. Fortunately, I am still able to carry over some of my failed 2008 goals until the tax filing deadline. Overall, I’m very happy with my ability to come up with the down payment. I will put more time into my 2009 goals and try to outline a plan for my goals so that they are more realistic. I will also put out goals for my blogging and other personal issues such as my health and career.