This is the second installment of my monthly attempt at goal planning. The main point of updating my goals once a month is to keep myself accountable. I’m hoping that if I write about my goals monthly, I will stay on track with the reverse of out of sight out of mind. 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 ($59,056.76/$59,056.76)
As of the beginning of September I am finished saving for my condo down payment, three month assessment slush fund and closing costs and a full month early. Woot!! The final selling price of my condo was determined during August, which allows me to calculate an exact value for my 20% down payment. The three month assessment slush fund was already known, however, my closing costs are still not finalized. I was given a range as to what my closing costs could be and to determine the goal for my down payment I took the high end of the range.
The target number increased from August 1st to September 1st due to confusion on my part. I was credited with a full year of assessments by the builder as an incentive to purchase my condo. I assumed this credit would be applied to the selling price of the condo, however, it will be applied to my down payment/closing costs. This slightly increased my down payment, but greatly increased my savings available for my goal.
Set up and fully fund a solo 401k ($0/$7,836)
I have yet to set up a solo 401k for my self-employed income. I have done some research on my available options for a solo 401k. I will be requesting information from Fidelity and T. Rowe Price about setting up a solo 401k, however, I am still hoping Vanguard will offer a solo 401k by the end of the year. I have until December 31, 2008 to set up my solo 401k and still fund it for tax year 2008. For the same reason, I believe Vanguard will be pushing hard to initiate a solo 401k account by the end of the year.
My goal for the solo 401k was increased this month as I received more self-employed income, which increases my maximum contribution.
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 3-month emergency fund ($0/$TBD)
I decided to change my emergency fund from a 6 monther to a 3 monther. After I save up a 3 month emergency fund, I will decide whether or not I want to extend the emergency fund to 6 months based on my job security. 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.
I’m extremely happy to have reached my down payment goal. It’s a huge relief to know that I have the money for my down payment and that I don’t have to use my Target stock, although Target is beginning to rebound. I will start saving for my solo 401k after I have purchased everything that I consider a necessity for my condo. Although I may reward myself with a few things that I want after saving so hardcore for the past 10-months.
- The Personal Finance Start-Up Blog Begins
- How to Calculate your Self-Employment Tax and Solo 401k Contribution
- The Basics of a Mortgage
- 2008 Financial Goals, A Year End Review
- End of June 2009 Financial Status