December 20, 2010

How Well Did I Do With My 2010 Financial Goals?

Early this year I wrote up a list of my Key Financial Goals for 2010

To be totally honest I virtually forgot about that set of goals.    Oops.    One key element in meeting your goals is to actually remember that you have them.   Oh well.  Anyway, I figured why not go ahead and look at the goals and see how well I did.

Here is the list of goals for 2010 that I had in January:

  1. Fully fund Roth IRAs by $10,000
  2. Pay $20,000 towards Home Mortgage principal
  3. Earn 10% return on 401k &  Roth IRA accounts
  4. Keep Household Spending flat 
  5. Cut Discretionary Spending by 5% 

This is how I did on each of the goals:
1. Fund Roth IRA's :  DONE.  My wife and I both fully funded Roth IRAs to the maximum.
2. Pay down house $20k :   Half done.   We made extra payments and cut our mortgage by 

3. Earn 10% on 401k & Roth :  DONE.    Between my 401k and Roth IRA my investments grew about 17% total which is fairly good.

4.  Keep spending flat.   FAIL    Overall our household spending on the 'needs' items increased from 2009 to 2010.   I figure it was up about 6%.
5.  Cut discretionary spending 5%.   DONE.   Actually our 'wants' spending was down 33% from 2009 to 2010.  That was basically due to a large bill for landscaping our yard in 2009.

If I gave myself 1 point for success then I'd count that up as 1 + 0.5 + 1 + 0 + 1 = 3.5 = 70%.    I don't think 70% is a bad grade for meeting goals.   If your goals are so easy you can hit 100% without much effort then the goals are too easy.  

1:  Easy success
It wasn't very hard to transfer $5000 into my IRA.  Having the $5000 in cash in the first place is the only hard part about it.

2: half done by choice
While we only got 'half done' on this one that was by choice.   We could easily put more cash into our house but we've recently decided to stop extra payments on the house for the time being.  So we decided to not reach for this goal on purpose.

3: good success
Getting >10% return on investments is a good goal and I hit well over that.   This one I'm actually happy with my performance.

4 & 5 : fail + success = success
If I combine the 'wants' and 'needs' categories then overall our household spending was down from 2009 to 2010.   So while I failed to keep 'needs' down having the 'wants' drop so much more than made up for it.   I call that a success overall.   Maybe thats a cop out.   I will look further at the increase in our spending in the 'needs' categories and see if we have any real problem areas or if it was essentially due to unavoidable inflation or one off expenses.

Overall I think we did OK.   We could have done a better job keeping household spending low. 

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