Came across this financial checklist over at Personal Finance Junkie this morning (how good is that name?) and thought it would be fun to see how many of these bad boys we can check off.
She says they’re good goals to hit by the time you’re 40, but really they’re great goals to achieve no matter your age, so whether you’re 20 or 60 let’s see how you’re looking so far…
I’ll go first, then your turn!
15 Goals to Hit On Your Way to Financial Freedom
#1. Build a starter emergency fund of $1,000. Check! The first step to getting things stabilized, and probably one of the hardest when you’re first starting out. Especially when you’re making minimum wage and stuck in the checking and savings shuffle game… I was king of that! ($50 into savings today, $50 back into my checking account at the end of the month when I’ve run out of money!) And the worst is that your brain only remembers the “saving” part, making you feel like you’ve saved when you haven’t ;)
#2. Organize your important financial information in a binder or eFile. Check! I still wanna do that Legacy Binder idea because it’s nerdily bad ass, but for now we keep our important $$$ and Life info into a centralized Google Doc, as well as partially printed out and stored in our safe. I do need to be better about keeping everything updated though as info changes all the time!
#3. Develop a monthly budget habit. Fail. What??? On a site called Budgets Are Sexy??? How is that possible?? Well, it’s possible because I spent 5+ years watching every penny and eventually got good at predicting my expenses without needing to look at it anymore :) I still think budgeting is one of the most important things to do when starting out, if not THE most important, but the good news is that once you’ve got a handle on everything you’re allowed to do whatever the F you want, haha… Even if you end up spending a little more had you continued to track it all :) So yeah – definitely still a huge fan of budgets and you gotta know where it’s all going, but my “budgets or die!” mantra has since eased up over time, and now I tend to focus more on the overall snapshot and trends (i.e. Net Worth) than I do tracking every transaction. If you’re a budgeting beast though and it’s working for you no matter what stage you’re in, more power to you!
#4. Pay off all of your debts. Fail. No budgeting and DEBTS?? What the hell kind of $$ blogger are you? Haha… An enigma? Wrapped in a conundrum? :) I don’t really know, but I have been known to go years without any debts whatsoever, so I guess this checklist caught me on a debt-year. Though does it make it better if I can pay it off at any time if I wanted to? (It’s our car loan – no credit card debt or anything)
#5. Build a mid-level emergency fund of $10,000. Check. You probably do need to be out of your teens and early 20s to hit this level, but fortunately as the years – and job skipping/promotions – continue, it gets easier and easier to start padding this boy. Though watch for kids and first homes and that bitch of a creeper, lifestyle inflation!
#6. Cut your expenses. Check. We could definitely be better, especially with the big three: home, car, food, but I’m giving us a pass here because we’ve come a far way over the years and planning on changing at least the home one significantly when we move next year. We’ve also been cable-free for over two years now – woo! (And iPhone free for over three!)
#7. Be aware of your credit score. Check. I use a combination of grabbing my free Experian score from USAA (currently 829), and then also my TransUnion and Equifax scores which uses the VantageScore 3.0 rating from Credit Karma (currently 835 and 833). There’s a ton of different scoring systems out there, but really as long as you’re monitoring one of them consistently over time you should be fine. If it moves sharply in any direction you know something’s up!
(Don’t forget – you can always get your free credit *report* every year too through Credit Karma as well as AnnualCreditReport.com! (I know that last one sounds sketchy, but I swear it’s legit :))
#8. Earn extra income. Check. My “day” job and my “hustle” jobs are pretty much mixed these days, but I have recently taken on more consulting jobs so I’m gonna go ahead and count that as extra since I had stopped for a handful of months. Big thanks to FinCon for letting me judge the FinTech Competition which brought in a wave of new business!
#9. Read the top personal finance books. Check. Although I’m much better about reading the top personal finance blogs since they tend to be more fun and relatable :) You’ll have to check out our books directory though over at Rockstar Finance as we recently polled over 100 financial bloggers on their favorites and then built a place to feature them all. Let me know what you think: PF Book Directory
#10. Automate your savings. Check/Fail. I automate a little of it, like when using Digit, but I tend to do most things manually these days just to have more control over it and appreciate it more. Like for example our new Spavings Experiment we’ve just started. Automation can be great, but don’t discount the power of consciously moving things over yourself too!
#11. Automate your bills. Check/Fail. I automate the bills that never change, but for everything else I just go in once a month and knock ’em out in one sitting to make sure all is kosher and the accounts have the funds needed when anything unusual is going on. Similar to the automation of savings and other areas, it makes me feel better manually handling stuff and forcing myself to check in at least once a month.
#12. Automate investing. Check/Fail. (Are you sensing a pattern here? :)). I automate some stuff, like our kids’ 529 investments and when I was experimenting with Acorns, but by and large I manually push money into my SEP or Roth IRA when it’s time again for all the reasons listed above. Although for my wife’s TSP plan (the gov’ts version of the 401(k)) we automate that fully, and I highly advise everyone else doing the same who has access to it, if not just to grab all that free $$$$ most employers give you!
#13. Write a 5 year financial plan. Major Fail. Haha… If there’s one thing I just cannot do no matter how hard I try, it’s to forecast my future. It’s amazing I’ve made it this far in the career/money world to be honest with you, as I can barely plan 5 weeks out no less 5 years! So anyone who can answer this question with a resounding “Yes”, or even a half-assed yes for that matter, gets major street cred in my books… I admire you greatly for being able to do that!!
#14. Start maxing out your retirement account every year. MAJOR CHECK!! Whew – ending on a good note here! My only rule with $$$ is to max out both of my retirement accounts every year ($20,000’ish total), and I’m proud to say that I’m now on year #7 or #8 so far and still going strong :) It’s pretty much the entire backbone of my net worth, and so long as you can do that you get a free pass at sucking at everything else, haha… it’s just a matter of time until you become a millionaire even if you do nothing else!
#15. Complete your emergency fund so you have at least 6 months’ expenses saved. Check. I dip above and beyond this number depending on what month/year you catch me, but as it stands we do have enough to last us if another penny didn’t come in over the next 6+ months… This is a tough one to pull off for sure though, especially if you’re doing #14 above. At least once you hit it though you don’t have to touch it until an emergency comes up!
So there it is! 15 financial goals to hit by 40 (or whenever)!
Looks like I scored a 10.5 out of a total possible 15, woops, haha… Someone take away my blog card! But it’s true – I could certainly improve in a number of areas, not gonna lie. Always something to work on, right? Life would be boring being perfect, or something like that? :)
A good exercise to check in on yourself though, whether you feel like sharing your results with others or not. All that counts is that you’re aware of what’s going on and striving to get better! And I’m rooting you on over here!
For those who do want to share though, let us know in the comments below what you scored, and how old you are if you dare :) Can be as easy as this, “I’m 37 years old and I scored 10.5 points out of 15. Yay?”
Thanks for the stimulation, PF Junkie!
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!