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Financial Goals Update as of October 1, 2008

The beginning of October marked a major milestone with my personal finances. I closed on my first home, which inevitably makes my personal finances much more complicated. Fortunately, I don’t have to make my first mortgage payment until December 1st, because I have some major financial planning to do this month. My goals have been dominated recently by saving for my down payment. Now that my down payment is successfully out of the way, I will be shifting my attention towards saving for retirement accounts. A list of my goals and the most recent update of my financial goals can be found at my goals page.

Set up and fully fund a solo 401k ($0/$8,532)

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/$6,000)

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. Now that I have closed on my condo, I have an exact value for my mortgage payment, property taxes and assessments. After getting my first electric and cable bills, I will be able to come up with a more exact value. For now I will use $6,000 for planning purposes as I feel I can live off of $2,000 a month if I were to lose my job.


Now that I am a home owner I will focus my attention towards saving for my 2008 retirement contributions. I have until the income tax due date to fund my retirement accounts for 2008. One important consideration when goal planning is the first time home buyer tax credit that I will receive when I file my income tax return. I also have a few minor goals that I have not set goals for yet, but might in the future. I still have to furnish certain parts of my condo. Also, I want to do some domestic traveling in 2009 with a possibility of a trip to Mexico.

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