Yesterday I wrote that I want to do one post per day, every day this week about my 2012 goals. Today I want to provide some details about my 2012 financial goals. I have only two financial goals this year and I’m really excited about accomplishing them:
1. Establish and maintain a $5,000 Freedom Fund
2. On a monthly basis, begin contributing the annual max-out amount ($417) to my Roth IRA
First, about the Freedom Fund: I thought a lot about the amount that I want to keep in cash savings. Having some type of emergency fund is a very important part of a healthy financial plan so I initially had the goal of building a $10,000 fund, but I just feel silly keeping a ton of money in cash when the Roth IRA is so accessible in the case of a real emergency. So I settled on $5,000. Five thousand dollars is enough to last me for three lean months if I were to lose my job, enough to replace a car transmission, enough to pay for a health emergency for my cat. Basically, right now, I think that $5,000 is enough. Also, to make this goal a little more of a challenge, I’m trying to get it accomplished before this school year is up – by May 30th, 2012.
Now, about the Roth: I won’t actually be able to max out my Roth this year, but I want to get solidly into the habit of maxing it out. So as soon as I have $5,000 in my Freedom Fund, I’m going to set up $417 automatic monthly contributions to my Roth. Even if I only contribute the $417 for a few months in 2012, that’s ok. It’s the habit that I’m working on, not the dollar amount….this year.
So that’s it for this year, financially speaking. Looking over this post, I suppose I could have been a little more ambitious. But I’m happy with the goals I’ve set, and I’m excited about shifting from debt payoff to savings.
Tomorrow, I’m going to discuss my 2012 health goals, but I’d love to hear about your financial goals for the upcoming year. What are you planning to accomplish in 2012?