This is my first post about the status of my current financial goals as they were on August 1, 2008. I am planning on providing monthly updates. A list of my goals and the most recent update of my financial goals can be found at my goals page.
Finish saving for 20% down payment on condo ($54,287.49/$56,717.92)
I have to finish saving for the down payment on my condo, which amounts to 20% of the purchase price, three months of assessments for a slush fund and closing costs. As of this time I do not know the exact amount of the closing costs. The down payment is due at closing, which I just found out to be October 3. All of my savings for the past year have gone towards my down payment. I have foregone my retirement savings so far in 2008 so that I can purchase a condo without paying private mortgage insurance. Initially, I was planning on using what was left of my Target stock as part of my down payment, but the significant drop in price made me change my plans and increase my savings rate. I am happy with my savings rate as I will not have to use and of my Target stock.
Set up and fully fund a solo 401k ($0/$7,056)
I began tutoring as a self-employed contractor in November of 2007 as soon as I realized my full-time salary would not allow me to save enough for my condo down payment. So far all of my tutoring money from 2008 has gone towards my down payment. As soon as my down payment is fully funded, I will begin socking away money into a solo 401k (that has yet to be set up). My goal is to fully fund the solo 401k by the end of the 2008 income tax due date. I do not know what the maximum contribution limit will be, and I won’t know until the end of 2008 when all of my self-employed income has been accrued. I will update the maximum contribution limit every month as I accrue more income.
Fully fund my Roth IRA ($0/$5,000)
I am hoping to be able to fully fund my Roth IRA by the 2008 income tax due date. I have decided to fund my solo 401k before my Roth IRA for tax sheltering purposes. If I don’t put all of my self-employed income into a solo 401k, then I will have to pay taxes on both sides of the Medicare and Social Security.
Save for an 6-month emergency fund ($0/$TBD)
I don’t know what the exact value of the emergency fund will be because my mortgage payment and property taxes have not been determined yet. I have to factor in assessments and utilities as well. I will come up with an exact value in the next month or two.
- 2008 Financial Goals, A Year End Review
- Goals Update for End of October 2009
- A Rundown of Self Employed Retirement Options
- Solo 401k Retirement Account for Self-Employed Income
- Personal Finance, Alternative Income And General Goals For 2009