Friday, December 12, 2008

2008 in Review

Since I have the day off and it's snowing about a foot an hour it's a good time to review how this year has gone financially. If you look at the left side of my blog you'll see that months and months ago I posted the following goals:
  1. Create an Emergency Fund of $700.
  2. Increase salary to $55,000.
  3. Start Health Savings Account.
  4. Make regular contributions to Roth IRA.
How did I do with those goals? I failed at all of them, ha! But here's why I'm not that upset about it: they were the wrong goals (except for the Emergency Fund). Months back I blamed my Salary for my struggles with the Payday Loan Sharks and my constant overdraft problem. I really thought that if my paycheck was bigger then it wouldn't matter that I had no idea where my money was going. False! Now that I set a budget and try to stick to it I don't get overdrafted constantly and find I can afford just about everything I need and want on my salary of $43,600. In the coming weeks I will (cross fingers) be making slightly more (or be unemployed) - more on that when there's more to tell.

Which brings me to my Emergency Fund. This is a major fail but it's still a goal I'm very committed to and will carry over to 2009. Since I started paying my Student Loans and contributing to my retirement fund this year I have been really unable to find a regular amount every pay period to put in my Emergency Fund. I've started a fund but it's pretty much empty right now. With the potential job insecurity looming I have realized that even $700 in an Emergency Fund would be woefully inadequate since I would have to make up a deficit between my anticipated Unemployment Benefits and my current fixed expenses.

Instead of an Emergency Fund thus far I've created an Emergency Plan which is to dump my apartment once and for all. Even though it's right down the block from Boyfriend's condo and is beautifully decorated to my taste, I spend less than two hours a week there to the tune of $865 a month (rent + overdue water + utilities + overdue utilities). Yikes! If I don't get laid off I still plan on dumping the apartment within the next six months. Bye bye hot pink bedroom. I will miss you!

And for regular OMG-I'm-Stuck-On-The-Side-Of-The-Road-With-No-Money emergencies - which would be rare I hope since I don't even have a car - Boyfriend has recently made me an Authorized User on one of his credit cards which is kinda cool since I'm working on paying off my credit card right now and my $30 available credit wouldn't really cover any true emergency. It may even improve my credit score through a concept called piggy-backing.

As for a Health Savings Account, this is no longer my goal because I was confused and thought I needed one when I, in fact, needed to open an Flex Spending Account. Unfortunately I intentionally missed the enrollment deadline for 2009 since there's a pretty good chance I won't be at my office for much of 2009. I guess this will turn out to be a 2010 goal. Doh! Luckily my health insurance is pretty rad and I have very low out-of-pocket costs. And my pharmacist just told me I can save $10 a month by switching to a generic prescription! [BTW: talk to pharmacists, they're not just cashiers who give you meds, they're really smart and helpful!]

Finally, I did not contribute one dime all year to my Roth I.R.A. Last time I looked at it I had about $12 in it. Instead I started contributing 7% of my salary in a 457 Retirement Plan. Despite the fact that I made this decision a month before The Downturn I have accumulated $998 in this account since July. Sweet! My friends think I'm stupid to put money in my 457 instead of a Roth I.R.A. because of the tax advantages but the first rule of investing is Know Thyself and I know that in December of 2007 I dumped my entire $600 in Roth funds to pay for (gasp) Christmas presents. As much as I'd like to think I've grown in 2008, making my retirement funds inacecssible is the best option for me right now.

In the next couple of days I will come up with new financial goals for 2009 that are hopefully more informed and easily attainable.


asgreen said...

It sounds like you have given this a lot of thought and come up with a really good plan.

asgreen said...

On another note my Roth is always what I chose to stop contributing to if other expenses come up. So giving more to my 403b is a better bet for me as well.

paisley penguin said...

Sounds like you have learned a lot since taking control. Kudos to you!

Shen Dove said...

You are moving in a positive direction as far as your goals and that always good. I am enjoying your blog. I tagged you in a recent blog post.

Daizy said...

Glad to see you are re-grouping and focusing your efforts for the new year. Sounds like your new goals will get you where you want to be.

Margie said...

At least you know your downfalls and you are adjusting them. Climbing out of debt is a challenge. Good luck!