I am so excited for this dumpster fire of a year to almost be over. I know nothing magically gets better on January 1^st but I really hope we’re closer in the downward slide back towards normal.

So it’s reaching that time of year when I start to ponder my goals for next year.

Because of my weird career and varied income, a lot of my financial success has boiled down to goals rather than super strict budgeting or any other method.

My personality takes really well to goals too. Goals are just a to do list of stuff to achieve and I am highly motivated to get stuff done and cross items off that list.

Again, with the varied income, something like “I’m going to contribute $500 to my retirement accounts each month” can be a little unattainable at times when almost nothing or really low paying job income is coming in.

I also feel like a failure and want to give up when I miss one of the months.

On the other hand – I have 365 days to contribute $6,000 to my IRA… that has been doable most of the time.

Setting these goals has changed each year. Most of the time they get just a hair more ambitious with each rotation around the sun, but once in a while I know that my work situation has change and I’ll either scale back or shoot for the moon.

I like to set realistic goals but stretch them just enough so they hurt a little.

And not all the goals are 100% for future Mel’s benefit. Usually one of those goals includes saving for a vacation with the BFFs annually.

Things that I consider when looking at my goals:

• Debts
• Emergency Savings
• Short Term Goals
• Midterm Goals
• Retirement Accounts

Debts

When I had debts in the past, I would evaluate whether I just wanted to plug along paying the minimum payments (sometimes that’s a perfectly reasonable approach) or if I wanted to supercharge any payoffs.

I might even set a goal that I wanted to pay off an extra $2,000 in debt by the end of the year.

Maybe that number seems crazy high to you, so set whatever seems doable.

Or make the minimum payments and concentrate on another goals.

Fortunately for 2021, I’m heading into it with no debts, so this won’t be on my goal list.

Emergency Savings

I built up my emergency savings by hitting a few different goals – $100, $1000, $5000, $10000, etc.

My end goal is to have a full years expenses in there, but I found that my emergency savings goal was a super high priority until I got it to $1000 and a pretty high priority until I got it to $10000 (which may sound excessive – but again, freelancer in the arts here). Now I just make it one of several goals with a lower amount attached to it.

I’m currently considering trying to add $1,000 to the account in 2021.

Short Term Goals

Each year I have a few short terms goals that need to be funded.

My car insurance payment (I do it in a lump sum in June), ordering new contacts (usually the end of the summer/beginning of fall), and a vacation (usually summer).

These goals have a pretty set time frame and pretty set amounts. Some years I can even cash flow some of those expenses and leave that saved up money in the account until the next year, leaving those goals crossed off the list for the upcoming year.

If the world isn’t on fire in the summer of 2021, my one best friend has already informed me she expects us to travel a lot. Of course, if the world isn’t on fire, I’m really hoping to be working most of the summer.

That being said, I’d still like to save up about $3,000 in my short term goals for these short term goals. Hopefully some credit card reward churning will also help cut down on costs too.

Midterm Goals

I have two midterm goals on the horizon – a down payment on a house and a new car.

The house down payment is actually hopefully going to happen this year, but I’ve been saving up for the last six years. Each year I set a goal amount to add to that account.

I love the car I have. Besides the irrational emotional attachment to it, they don’t even make Toyota Matrixes anymore and they are great cars. I’m going to drive it until I can’t anymore.

That being said, it is 13 years old and I would like to buy a new car when it dies, so my rule with myself is I can spend whatever I manage to save up for the next car when the time comes.

My down payment account doesn’t need any more added to it but for 2021, I think my car goal will be $2,000.

Side note: I’ve been really focused on my personal finances for the last seven+ years and one thing is, that after a bazillion missteps in the beginning, I’ve actually reached a few of those goals like a largely funded emergency fund and a saved up down payment. And because I’m fortunate enough to be in such a habit of saving, it makes it easier to increase my other goals now that money that was being funneled into those first goals doesn’t have to go there anymore – especially when my industry isn’t a dumpster fire and I’m actually making money.

It’s like a savings snowball and the effect on your net worth and ability to sleep at night is wayyyy better than the debt payoff version (though that one is very effective too).

I also consider my brokerage account a midterm goal though in my head it’s probably for retirement.

I’d like to contribute another $2,000 to that account in 2021 too.

Retirement Accounts

Retirement accounts are easy goals in some ways and hard in others.

The accounts you have access to give you at least a range for your goal.

Personally, I have a Roth IRA, and Health Savings Account.

Each of these have set limits on them. In 2021, the Roth IRA limit will be $6,000 and the HSA limit (for a single person) will be $3,600.

You may have access to a 401(k) or 403(b). For 2021, those plans will have contribution limits of $19,500.

The first finance goal I ever set was to max out my Roth IRA. For 2021, I’ll keep that same goal and aim to max out my HSA – that will be a total of $9,600.

Now that I’ve estimated my goals, I list them out:

• Emergency Savings – $1,000
• Short Term Goals – $3,000
• New Car Savings – $2,000
• Brokerage Account Savings – $2,000
• IRA – $6,000
• HSA – $3,600

That’s a total of $17,600.

To me, that looks like a pretty big chunk of change.

I genuinely have no idea what 2021 is going to hold, and if it’s anything like this year, I’d guess I’ll make around $40,000 before taxes.

Maybe things will get better sooner and I’ll make more, but I expect to spend the first half of the year doing what I’m doing now.

$17,600 is a stretch if that happens, but not impossible.

To optimize these goals though, I also think about how I’d rank the in order of importance.

To do that, I think about when I need the money (for instance, I need most of that short term money saved up by the beginning of summer), and what the effects will be if I don’t hit that goal this year and it has to get pushed.

I consider missing out on compound interest (retirement accounts), the ability to push back some deadlines (like the fact that I actually have until I file my taxes to contribute to retirement accounts for the year), how likely my car actually is to die this year (that’s literally a roll of the die at this point, who know), etc.

Then I rank them in order of importance to me:

• Short Term Goals
• IRA
• HSA
• New Car
• Brokerage
• Emergency Savings

Some years the order changes, but in 2021, I think these are my priorities. I won’t necessarily fund them each separately, waiting till one goal is totally achieved before starting the next (though I might). Nonetheless, that list gives me an idea of where I can scale back if I need to.

I’d really like to get everything through New Car funded. If brokerage and emergency savings don’t make it this year, that’s really not so bad.

And overall, it is still a ton of progress.

What would your 2021 money goals look like?