I love the beginning of the month. It’s when interest accumulates on high interest savings accounts, all of my payments come through, and it’s also budget and goal review time.
My goals for 2014 have been far too easy to reach. I’ve already promoted myself by going for a promising job opportunity; I’ve surpassed my online earnings goal each month of the year; my goal of remaining unplugged for at least one hour of quality time with the husband per day has been surpassed and my weight is dropping nicely and is in line with my goal to lose 15 pounds in 2014.
I’m nothing if not future oriented, and my theme for 2015 is all about travel.
My job is temporary, so I am not tied down. At the end of my contract, I am free to travel for a little while. My travel plans for the new year hopefully include a trip to the New England states, an extended trip to South America, and hopefully another to Europe or the UK.
Though at least one of these trips will be free, compliments of my American Express Gold Rewards Card [use my referral link for 25,000 bonus sign up points], I don’t spend enough money on my credit cards to travel hack my way through ALL of these trips.
Maybe just one or two.
To be able to go on these trips as well as pay the mortgage, save for retirement and maintain my savings rates, my new goal is to save $12,000.
$12,000 is a realistic amount, while still being challenging.
Saving $12,000 will require discipline and cutting back. This is especially true considering my husband and I are jetting off for a three and a half week honeymoon in Asia next month.
Luckily, Asia can be inexpensive. We are visiting Nepal and Indonesia, so we won’t be spending an extraordinary amount in either place. We have been selling a lot of our wedding decor on Facebook and Craigslist, and keeping the cash in an envelope for spending money when we leave. That should help significantly with the cost of food and attractions in both places.
I estimate that without any free flights or hotels, my trips will cost about $9,000 in 2015.
Since I won’t have a regular income when I am away from my day job, I would be using the extra $4,000 (and whatever I save with free flights and accommodation from my various credit cards) as a buffer in case I don’t find enough freelance or contract work to be able to make a decent income on the road.
Setting a Schedule, Not a Deadline
If you read any personal finance blogs besides Add Vodka, you’ll know the term SMART in relation to goals. SMART, in case you haven’t heard of it, is the notion that a goal won’t be achieved unless it is:
My goal of saving $12,000 is pretty measurable. I’ll get into the specifics as to how I will reach this goal below. It’s realistic and attainable without being too easy. As far as timely, well..
What the T really means is that the goal has to have a deadline attached to it. I recently read a 45 page piece by James Clear about reaching goals and changing your life through habit transformation. In it, James argues that setting a schedule instead of a deadline is far more effective to reach goals and change your life.
Marrying the two theories and applying them to my goal of saving $12,000, to reach the goal and to continue saving after my goal has been reached, the steps I am going to take to make this happen are as follows:
- With my new gig, after taxes, fees, and increased commuting costs, I make $1350 per month more (this is a modest estimate). Every pay day, I will pay myself first by transferring $675 into my account. This sets a schedule of $675 every two weeks being deposited into a high interest savings account.
- Every extra dollar I earn from freelancing, my online income streams, or anything else will be transferred immediately into the same account. While this isn’t a set schedule as transferring $675 every two weeks, it will become a habit (and fortunately already is).
- I will review my progress toward my goal monthly. If it doesn’t appear that I will be meeting my goal by February 2015, I will pick up more freelancing jobs and pound the sand to try to find more work.
- Continue to make huge progress on slowly deflating our lifestyle back to normal; cutting back on eating out, spending on material things, and continue being frugal and smart with our money.
I am excited to not only reach this goal, but also permanently change our lifestyle by deflating it and examining our spending. Look for my progress in my monthly goal progress reports.