Setting Financial Goals for 2008

As I’ve noted in the past, I’m not much for New Year’s resolutions. Rather, at the beginning of each year, I like to lay out goals for the upcoming year — and it looks like I’m not alone. So, with that said… Let’s take a look at what this upcoming year will look like for us…

Retirement Savings

I’m going to continue maxing out my employer’s regular retirement plan (5% + 8.2% match) as well as my 403(b), 457(b), and SEP-IRA. Unfortunately (or fortunately, depending on how you look at it), we’re beyond the income limits for deducting our traditional IRA contributions, or even making Roth IRA contributions, so those are out of the question.

This goal is pretty much assured, as we were able to pull it off last year, and the fact that we’re bumping up against the limits means we couldn’t really set the bar any higher. Moreover, I’ve set everything up to happen via payroll deductions or automatic transfers, so it’s hard to imagine not meeting this goal.

Non-Retirement Savings

Now that we’re maxing out all available retirement savings options, my attention has turned to investing in taxable accounts. While we’re currently using Target Retirement funds (or the equivalent) wherever possible within our retirement accounts, tax efficiency is an important concern outside of these accounts. As things stand right now, we’re transferring a fixed amount to Vanguard each month, but it’s all going into their Total Stock Market Index Fund. What we really need is a well-balanced, tax-efficient strategy. So… My goal in this area is to come up with one.

Simplifying Our Finances

One of my big goals for the year is to simplify our finances. I’ve actually done a good bit of this in the recent past, and I’m hoping to wrap it all up in 2008. Here’s what’s left:

I intend to drop down to three credit cards — our two main reward cards Amex Blue Cash and Chase Freedom as well as a Citi Dividend Platinum for use at Sam’s Club (they accept MasterCard but not Visa or Amex). This means I’ll be closing another Citi account, though I’ll be sure to consolidate the credit limits before I do so.

I also intend to finish automating our finances. We’re doing pretty well here already, but there are still some loose ends that need to be tied up. For example, I need to set up all of our credit cards for autopay (one is done, the other two are in the works). I also need to schedule recurring payments for a variety of infrequent payments (e.g., our annual life insurance premiums). My goal here is to come as close to putting our finances on auto-pilot as possible.

Protecting Our Future

While we’ve gone to great lengths to protect our assets, we still have a gaping hole — long term disability. I have coverage through work, but it’s pretty minimal. Thus, I need to pick up a private policy. While I actually started this process late last summer, I still haven’t managed to follow through and get it done.

Creating a User Manual for Our Financial Life

This one is a holdover from last year (and the year before)… In short, I’d like to create a “user manual” or roadmap for managing our finances. While we both share in all financial decisions, I tend to do most of the bookkeeping and I want to be sure she has everything she needs in the even something happens to me.

I’m envisioning a three-ring binder containing everything that she needs — account numbers, insurance policy numbers, contact information, usernames, passwords, etc. I have all of this information around, I just need to find some time to collate it.

Kids and Money

Our oldest son is now ten years old and has a decent amount of money in the bank. This year, I’d like to introduce him to the concept of investing.

I’m still not sure exactly how I want to go about this, so figuring that out will be Step #1. Given that we have four kids, I’m looking for a scalable solution that won’t be overly complex once they’re all old enough to be involved — more than anything, I want to avoid account overload.

In all likelihood, we’ll end up doing something along the lines of opening an account and buying a reasonably well-diversified mutual fund. Unfortunately, I can’t be more specific than that right now, as I haven’t had the opportunity to think it all of the way through. This is a big step for us, though, as it will set the stage for teaching all of our kids about finance and investing.


Every year around this time I think it would be great if I had kept tax-related paperwork together throughout the year rather than having to scramble to find it. So in 2008, my goal is to create and maintain a dedicated tax folder where I deposit anything that I’ll need to lay my hands on in advance of April 15, 2009. Even though it’s a very simple thing, I’m pretty sure that this will be the among the hardest things for me to pull off this year.

What About You?

Do you have any goals or resolutions for the New Year? If so, please share them with us in the comments, below.

28 Responses to “Setting Financial Goals for 2008”

  1. Anonymous

    Goal for 2008 is to lower my auto debt. I used a home equity line of credit to purchase and have been paying minimal amounts – to the point where I’m upside down on an auto for the first time in my life. My goal is to no longer be upside down by 1Q 2009.

  2. Anonymous

    VANGUARD,as of December 14,2007,no longer wishes to do business with Americans residing in Canada in spite of doing so for some 25 years in my case. Vanguard has frozen all retirement and non-retirement accounts for Americans residing in Canada by restricting all operations save the redemption of investments; investments that have stood since 1975. This in spite of the fact that investors are supposed to be shareholders according to Vanguard founder John Bogle. This is a betrayal to investor/shareholders and an insult to Americans who are told where they may live!

  3. Doug: 415(c) limits are per employer, so I have a separate one for my SEP. However, the 403(b) is subject to some weird rules wherein it appears to be treated as if it belongs to any employer in which I have an ownership interest. Thus, it counts against my self employment-related limit, thereby reducing my SEP limit to $29,500 in 2007 ($30,500 in 2008).

    My job-related retirement (excluding the 403(b)) goes against its own limit.

    You are correct in that the 457(b) stands alone.

    Hope this helps. If you want more info, please feel free to search around the site. I’ve written extensively about this in the past.

  4. Anonymous

    Nickel —

    Since this has become my favority topic, forgive me for asking about it again:

    when you say you will max out your 403(b), ER retirement plan, and SEP, you will aggregate all 3 of these sources for 415(c) purposes, right? So if you can afford it, you’ll drop 45,000 (or 46,000 in 2008 – I cant remember) COMBINED into all 3 of these sources (and that includes the ER match), right? And then another 15,500 in the 457 since that is separate for 415(c) purposes?

    That is what I understand to be the drill from reading your posts, other posts, and the tax regulations. Just checking to confirm as I am going to try a similar path.

  5. Anonymous


    Not at all! Maybe you are just more brave than most, but I am in the same situation.

    We recently lowered our 401K contributions to the % our employers will match because we realized we were more out of control than either of us knew. It is only temporary, and not something I would recommend unless you really see no other way out.

    I just got married this year and am used to having a tight hold on my finances (excel spreadsheet anyone?) but ended up adding a few thousand to my own debt number during the preparations and honeymoon. Then I started to find out how much was charged on my husbands 4 credit card accounts! It was very sobering to add up that number in the spreadsheet.. total debt.

    I’m optimistic and look towards the future. 2008 my goals.

    1) a debt free vacation. All expenses saved for in advance.
    2) pay down debt on the schedule I made
    3) start a short term savings to cover other short term needs (besides vacations) like repairs and holiday gifts.

    Consolidate credit limits when you close a card, that might work for me! I have 2 cards under the Citi umbrella.

    ING has something called Planet Orange that you could look into on the education front. I was making use of their money education pages in my girl scout troop of 7th graders recently. My younger sister is 10 and I am pretty sure she could understand it just as well as the 12/13 year olds I was working with.

  6. Anonymous

    Get out of Chapter 13 which is basically get out of debt, see my website for my attempts.

    Oh, and becuase I will be out of debt, learn about investing since I will have money then 🙂

  7. Anonymous

    My financial goals are to max out the matching contributions part of my 401k, minimize costs around the house by having only a cell phone, and beating the S&P 500 in my investment accounts.

  8. Anonymous

    >Fully fund 401ks for both of us (repeat of 2007 >no budget adjustment necessary).
    >Fully fund 2007 IRAs for each of us $8000.
    >Fully fund 2008 IRAs for each of us $10,000.

    I have researched this and according to the law if you contribute to a 401k plan you cannot contribute to an IRA. I’ve seen a number of people say they are contributing to both within the same year. I think you are going to get penalized for trying to do both tax sheltered accounts.

  9. Anonymous

    Nickel: Regarding kids and investing.

    My parents started me investing when I was around 10 and my kids have started early as well. With my daughter it started after a trip to Disneyland when I asked if she’d like to own part of Disney. She was obviously very excited about that and subsequently helped me pick some of the other stocks she owns (the likes of Mattel, Disney, Pepsi, and Harley Davidson).

    While she’s too young to pick on her own, I always take the time to research a company if she asks me to and explain to her why I did or didn’t buy it for her. So far that’s worked at keeping her somewhat interested in it.

  10. Anonymous

    I think simplifying finances is one of the best gifts anyone can give to themselves this year. With lesser credit cards, one has lesser responsibilities. There is a smaller chance of incurring large debts. Besides, it will also help curb shopping tendencies and impulse buying.

  11. Anonymous

    Definitely one of my main goals is preserving my wealth in 2008. With the declining dollar and poor saving rates with banks, I’ve diversified my portfolio with commodities and foreign currencies. I just don’t see how the dollar can stop declining with the Fed cutting rates and the current national debt we carry.

    If you have good credit, I think 2008 will be a great year to consolidate debt since it looks like the Fed is going to lower rates further. The 10 year is hovering at 3.9 currently.

    Another goal will be maxing out retirement accounts and trying to preserve wealth in what I believe is going to be a financially challenging year.

  12. Anonymous

    Finish 2007 goal to pay off all unsecured debt: $1745 to go (should be done by the end of Jan.)
    Fully fund 401ks for both of us (repeat of 2007 no budget adjustment necessary).
    Fully fund 2007 IRAs for each of us $8000.
    Save for a nused car for me $17,000.
    Add $10,000 to our emergency fund.
    Save $5,000 for baby fund.
    Fully fund 2008 IRAs for each of us $10,000.
    2008 money goals = $50,000. We paid off $53,000 in debt during 2007 so we should be able to handle a $50,000 goal but it will be a stretch for us.

  13. Anonymous

    I feel a bit behind the power curve as I’m in the “get out of debt” stage in my financial turnaround while many pf bloggers are maxing out their 401ks AND IRAs every year. I’m looking forward to being able to put more money towards retirement than debt payment(24-30 months estimate).

  14. Anonymous

    My husband and I sat down yesterday and set up some goals:

    – finish 2007 Roth IRA contributions ($2K to go)
    – increase emergency fund to $10K ($3K to go)
    – fund Roth IRA for 2008 ($5K)
    – start saving for a house down payment

    The Roth is mine, since I don’t have access to a 401k. We also contribute enough to maximize company match in my husband’s 401k, but I don’t think of that as a goal since it just happens automatically. We’ll be looking to increase those contributions and start a second IRA once we get our emergency cushion built up, but that’ll probably be very late in the year, or more likely 2009.

    Numerically, I know these goals seem really small compared to a lot of ones I see on money blogs. I really have to remind myself that everyone’s situation is different – for instance, full-time grad school is not exactly lucrative. I look forward to the day when I’m not eligible for the Roth anymore ^_^

  15. Anonymous

    Since I am just starting out with all of this. I created a debt snowball and will payoff the highest % this month. I alsoopened a few ccs for the rewards(drivers edge,amex preferred).
    I also plan to try to get 1k in emergency fund. It seems daunting but I am trying!
    Taking on a dog walker doesnt help but it is like a necessity for my *kids*

  16. Anonymous

    Happy New Year! Hope your 2008 goals pan out okay. My main financial goal this year is to speed up my debt reduction by generating other sources of income. A little daunting at this point, but I’ll get there.

  17. Anonymous

    One, the roadmap. I have an excel spreadsheet with everything in a nice easy way to understand. It has website, login/password, current account balance, etc. I back it up to our external harddrive every 2-3 months. Then I burn a copy and toss it in the safe. DH knows it’s there.

    Also in the same excel file, it keeps track of all bills paid with confirmation numbers, amount, dates due, tracking of dates paid, etc. This way if he opened it up, he’d know cable due this day, electric due this day. It’s set up to be due every 30 days so even if the bill isn’t here, it should be. Like property taxes every 3 months, expected arrival date and payment date. Also I have an attachment to the scanned/downloaded bills for DH to find on the computer. Also from the excel file, there is important dates like dates we filed for reimbursement, insurance renewal, immigration status, etc. Everything is on the excel file, with dates.

    Now for kids (sorry so long). I personally at 10 had a checking/savings account. I was expected to manage my clothing money for the year (it’s different with girls you know?). And had to budget my cash to buy stuff I needed and wanted. I put my christmas money, allowance, gifts, etc to pay for stuff my mom deemed necessary.

    Also at 13 I got a credit card and started charging under my mom’s eye. This way to learn how to pay the bill in full and on time. At first I had to keep every charge in my check register to learn it wasn’t “free” money. And this way I knew once it was spent on the card, it was also spent from my checking.

    This has held me in good stead for over 15 years and I’ve never paid interest on a credit card or ASSUMED it was free money. Good luck..

  18. Yes, the binder will go into either a safe or a safe deposit box. And the login information is actually in an encrypted computer file, so I’ll just burn that on a CD and put it in the folder with instructions as to how to access it (minus the encryption key, which my wife already knows).

  19. Anonymous

    Sounds like reasonable goals.

    I know it would be a huge hassle but you might want to consider putting that binder in a safe deposit box rather than on your bookshelf. Or at least make a good effort to hide it since it would give someone pretty good access to your financial info.


  20. Anonymous

    What about setting your kids up with a mock investing account and then rewarding them with real money when they accomplish certain goals? For instance, they might be investing $30K or $5K online, but you might only have to give them $100 or whatevery you set up. Kind of a scale model situation.

  21. Anonymous

    You can use a Visa card indirectly at Sam’s Club. I just go to my local Walmart and buy a gift card on my Visa Card. Sams Club accepts Walmart Gift Cards so I am able to use my Visa card and rack up more reward points.

  22. Anonymous

    Regarding the IRAs.. I also earn too much to contribute to a Roth or deduct contributions to a traditional IRA (due to a 403b at work), but I’m considering fully funding a traditional IRA for 2007, 2008 and 2009 anyway. This is my understanding, and PLEASE, PLEASE someone correct me if I am wrong about this: The earnings on the IRA will grow tax free in contrast to a traditional mutual fund AND traditional IRAs can be converted to Roth IRAs in 2010. For those who funded a traditional IRA with pre-tax dollars, you’ll have to pay those taxes when you convert (over 2 years), but because I already have paid taxes, there won’t be new taxes and when I take the money out at retirement, I won’t owe taxes on the contributions or earnings. This is what I’ve gathered from multiple sources, but if I’m missing something, someone please save me from myself!

  23. Anonymous

    Some of my goals are:

    – max out 401k and IRA
    – increase income 20%
    – increase website subscribers
    – buy an investment property

    I heard on the radio the other day that a good way to set goals is to instead look back at 2007 and ask yourself what would you do differently.

    Happy New Year!

Leave a Reply