A very belated happy new year to all! I figured I should dedicate my first post of 2020 to my personal finance goals for the year. I know we’re already a month into the new year, but I already feel like I am off to a good start with achieving these goals.
Invest My Traditional IRA Funds
When I left my previous job after the birth of my daughter, I had to move my 403(b) money out of the institute that it was with due to a conflict of interest with my husband’s job. The way our retirement accounts were set up at that institution only allowed for me to do a rollover into a traditional IRA when moving the money out and I only had a Roth IRA account, so I had to open a new account for these funds. I have been slacking and have yet to invest these funds into any stocks yet, so my goal for 2020 is to be fully invested before year end (hopefully way before).
Max Out Contribution to Our Two Main IRAs
Every year my husband and I make sure we make the max contribution to each of our IRAs. He has a traditional and I have both a Roth and a traditional IRA. Being that I did not originally plan to have my money in a traditional IRA, I am going to hold off on contributing to that until I have fully invested the funds currently sitting in cash. That being said, by year end we plan to make the maximum contribution of $6,000 to both my Roth IRA and my husband’s traditional IRA.
Contribute to Our Daughter’s Investment Account
Every month since the birth of our daughter in July 2019 we contribute $250 to an investment account for her college fund. This is something we plan to continue to do through 2020, as well as any additional money she may receive for her first birthday or any other occasion throughout the year. If you care to read about some portfolio updates, follow this link to my Seeking Alpha profile with all my articles.
Spend Less on Restaurants
Restaurants are a category my husband and I always struggle with keeping under budget. For 2020, our goal is just to simply spend less on going out to eat than the prior year, which SHOULD be easy to do (hopefully). In 2019 we went on a babymoon, I got very tired/lazy towards the end of my pregnancy (aka lots of takeout) and then when we were first adjusting to life after the birth of our daughter, we also did a lot of takeout. However, having a kid does make it harder to go out to restaurants at the drop of a hat like we used to, so that in and of itself should keep saving us money. We try to do one date night a month, still, but we also have several gift cards which will hopefully help reduce costs, as well.
Make at Least One Extra Payment Towards Principal of Mortgage
Ever since the 2018 tax law changes, itemizing deductions makes no sense for us from a tax standpoint; therefore, there is no benefit (even if it was originally a minimal benefit to begin with) to having mortgage interest. Due to this, we would ideally love to pay off our mortgage well before 30 years. Beginning this year, our goal is to just get the ball rolling with even just one extra payment towards principal by year end. We are still adjusting to living on a single income with an addition to our family, so we don’t want to set unrealistic expectations.
Cut Spending on Clothes
I used to have a $250 budget per month for clothes shopping. Once I became pregnant, I spent significantly less because I hated maternity clothes. Now entering 2020 no longer pregnant, I want to keep clothing purchases minimal. That being said, we do have various weddings and other occasions this year and my size has changed a bit after giving birth, so I do expect to be making some purchases. However, the main idea here is I want to be more mindful of clothing purchases. I want to buy things that will last longer and are not just trendy this year (or for just one season even) that I will want to sell/donate by next year.
I know many of the personal finance goals listed above do not have an actual dollar amount tied to them, but that is because I think that the common theme here is just to simply do better financially. I want to spend less and save more, at least where I can. We’ve made a lot of changes to our spending since becoming a single income family already, so I want to continue getting comfortable with that and stay on a good financial path.
What are your personal finance goals for 2020?