2016 Financial Goal Update
Right around after we all ring in the new year, we make a pledge to spend less money and hit the gym to lose a little weight. At Even Steven Money instead, we came up with our 2016 Financial Goals, as we all know goals are meant to be tracked and reached. Since we have passed the half-way point in the year it’s time to check in and see if I am on track for 2016. Everything in italics is from my original article which is followed by my updates. Thanks for holding me accountable!
Cancel my vision insurance
We went through an eye test (included in our regular insurance) and bought our eye glasses in November 2015 so the thought process is that we will not need glasses or an eye check until late 2016 and can manage to hold off until our insurance kicks in as we will include vision insurance for 2017.
So far so good. Eye insurance has been canceled and we both have yet to lose our glasses including prescription sunglasses. It’s great that such a simple change is saving us money in 2016.
Bought 40 hours of vacation
I receive 3 weeks/15 days of vacation with my 9-5 job however, Mrs. Even Steven receives 22 days. This past year it was not a huge obstacle to get around as Mrs. ESM took an extra trip to Florida to visit La Familia. This year we plan on taking a longer trip to Nicaragua with some friends and knew we would want the extra days.
Vacation time purchased and it’s going to come in handy as our Nicaragua trip is almost upon us. My only disappointment in this category is our friends had to cancel as a wedding came up for a close college friend. I’m hoping to enjoy our Nicaraguan family vacation, but I’m certainly hoping to check out a local brewery in San Juan del Sur, get some surf lessons, and mostly just relax.
Increase my H.S.A. to max contribution–$6,750
Per paycheck (26 paychecks) $259.62 as this amount pales in comparison to what we contributed last year, but if you have read the Madfientist, he will tell you it’s the Ultimate Retirement Account. This has been part of my Early Retirement Blueprint as we plan to have around $25,000 in my H.S.A account as our medical emergency fund.
H.S.A Contribution: $3330.76 It’s funny when you set things up to be automatic straight from your paycheck it’s really hard to fail. I don’t think I have even noticed the difference other than the increase in my Personal Capital net worth from the additions.
After doing some research with my company earlier in the year I found out they contributed $400 towards my H.S.A. account so the 26 paychecks were divided by $6,350 and came to $244.23 instead of the original amount. Currently, anything over $1,000 gets transferred over to my H.S.A. investment account, which is currently in a low-cost S&P index fund. Don’t you just love H.S.A accounts
Increase 401 (k) to max contribution-$18,000
Oh the biggy daddy of them all, haha! I have been waiting to max this account since I began reading personal finance blogs. This past year I contributed up to the company match while I paid off all of my student loans.
Per paycheck (26 paychecks): $692.31; only thing that bothers me a little with this amount is I am unable to get the exact dollar amount. Our company and I believe the servicer we use only allows a percentage, so unless by some act of the almighty, I will be either a little under or a little over the total amount of $18,000 max contribution for 2016. Part of me wants to contribute $1 over and call in a fit of rage about not being able to update the total to a dollar amount rather than a percentage, in reality, I will try to hit that $1 over minus the fit of rage.
401K Contribution: $9,832.34 I am ahead of schedule as we reach the half-way point of the year. With overtime, bonus, etc I project that I should reach my $18,000 goal with my last paycheck in November. My last 3 paychecks will be so much money in comparison to my earlier paychecks, I just might buy a pony! I don’t make a large income so maybe a miniature pony instead.
Mrs. Even Steven Max 401 k contribution-$18,000
Not much changing here, last year we increased the contribution to a comfortable amount that will be very close to the full max contribution by the end of the year. Last year we changed this right around the pay increase and bonus in an attempt to get very close to the max, this year with the expected raise and bonus for the entire year, it should be right on the money.
401K Contribution: $11,259.96 In true form Mrs. Even Steven is also ahead of our goal and based on a quick calculator check, we should expect larger December paychecks as well, although she only gets 2 paychecks, I get 3 paychecks, so I clearly win this battle. Maybe she will want to buy a miniature pony as well and we can race them?!?! The possibilities are endless with our miniature pony dreams.
Pay off Florida Rental…..In Full
Our Financial Independence journey relies heavily on rental income and 2016 is set to have a major milestone. Our expected goal to pay off the FL Rental property was for December 2016, after the mortgage company finally dropped the PMI (we also filed a Consumer Financial Protection Bureau complaint since they should have dropped it months before), this allowed us to increase the principal payment and based on the projections finish off a month early! We are excited for this moment, much like my student loan repayment this marks a significant point in our journey.
Just as we were rolling along sharing the good news of maxing out H.S.A. and 401K contributions, we had a rock come up and put a chip in our windshield of happiness. In May we found out our FL renter of the last 3 years had plans to move out and buy a house. They had talked about this before so the house was on a 6-month lease and the plan was to move to a month to month lease once this expired. Then everything got a little funny and not good funny like laughing at Chris Pratt in Parks and Rec. Let’s just say things could have ended better especially after being such a good tenant over the past 3 years. In the end, after careful consideration on what was best for the rental house and prospects of future tenants, we chose to fix up the place. The improvements included a new A/C, wood flooring and stairs, new appliances, paint, and enough Home Depot receipts to make me bleed orange for a month.
The good news is the FL Rental Home looks better than ever and the tenants have been a breath of fresh air. We were able to cash flow the entire project from a combination of savings and rental income*. The rental income has increased and while we took a short term hit, the long term is brighter than before for the overall look and value of the home.
So what does this mean about our FL Rental being paid off by the end of the year?
We were 1 month ahead before this all started and after using the savings and rental income we are now 1 month behind. If we applied the same payments plus the additional rental income starting in July our finish date would be January 2017. As we look ahead to the end of 2016 we are game planning our income and savings strategy to finish the year strong and reach our goal. I hope to talk about our strategy after a nice long vacation in August.
Roth IRA-Mr. and Mrs. Even Steven–Undecided
As we went through the numbers and our budget updates heading towards 2016, one of our sticking points has been contributing to our Roth IRA. Mrs. ESM is less on board with this as she prefers to see the money in her savings account, she uses the money throughout the year for larger purchases, trips, etc. and does not want to make contribute to the Roth IRA to only have to take it out. I don’t think we will contribute immediately in the early part of 2016, but based on our conversation I believe she is 75% on board to contribute the last month of 2016 after the rental is paid in full.
I have a confession to make, I actually borrowed from Mrs. Even Steven to pay off my personal loan. I know what you are thinking, in marriage everything is together. However, in this case, I am borrowing money from her personal savings, since we keep our accounts separate and I will be paying her back throughout 2016. One of my ideas that Mrs. ESM was not to fond of was paying her back by contributing to my own Roth IRA in 2016, at least I tried. Based on my current 9-5 job I think contributing my max 401k and the household H.S.A contributions will make maxing out a Roth IRA the easiest task in the world.
Roth IRA Contribution: $0 As you can probably imagine after reading about the FL rental house this number is at 0. The good news in the story is I was able to convince Mrs. Even Steven that earning 0.01% interest in her savings account was bad and that since there was not an immediate need for a large portion of this money we should move it to an individual account through Vanguard and a Total Stock Market ETF. Not a Roth IRA contribution, but certainly a step in the right direction.
In July though as part of paying back Mrs. Even Steven I setup and contributed $1,000 to her very own Roth IRA, while not part of the half-way point it’s a step in the right direction towards contributing the maximum amount in 2016. Lesson learned in this is to set a goal even if it is a reach. I had a goal of Undecided and that have been my results so far. New Goal: Roth IRA contribution of $11,000 combined.
The goals for 2016 include a max contribution to both 401k accounts, H.S.A., and paying off our Florida rental. $41,750 are automatically set up to reach our goals, the Roth IRA is a work in progress. I do not want to leave $11,000 on the table for our future, we make enough money to make this a priority. On the positive side, so many great things have happened in 2015 and 2016 looks all the brighter ahead. I look forward to our Financial Independence Day of May 2020, I can’t wait to share reaching our goals along the way.
Total H.S.A. and 401K Contribution: $24,423.23 or 58.5% to Goal
Our goals of maxing out our 401K and H.S.A. are ahead of schedule and while the Florida rental is one month behind we are game planning to make it happen in the 2nd half of 2016. In our quest to max out our Roth IRA we are behind a schedule that never existed and that might have been the problem from Day 1. Expect a game plan to show up in August after our vaction on how we plan to max out our Roth IRA’s moving forward. The first half of 2016 has been great to us in our pursuit of financial independence as we take the necessary steps to reach our very own Financial Independence Day of May 2020.
We look forward to the challenges and adventures ahead in the remaining part of 2016 in our personal and financial lives. We have plans to travel to Boston, Nicaragua, San Diego (FINCON), and Miami as we enjoy our life free of personal debt. Mrs. Even Steven recently passed the CPA and our visits to the park and bike rides in the city of Chicago have increased as less time in front of the computer have sent us outside a great deal and maybe a little away from blogging, sorry readers. I have recently ramped up my efforts with my eBay store to increase my overall income and create more of my very own F-you fund, although I like my old title of calling it my “Man Fund”. I believe big things are in store and possibly even big changes near by. I look forward to it all. I hope you too are checking in with your financial goals and look to finish 2016 strong.
The best way of course to track all of your income, spending, and investments are with Personal Capital. It has made my life that much easier to know where my money is going and has helped give me a better visualize on how I can do better to make my money go where I want it to.
*The appliances were financed at 0% by my mother-in-law and we are currently making the payments. Mrs. Even Steven handles the Florida property, while I would have preferred just to pay cash and move on, the final decision is hers.