2021 Financial Goal-Setting and the Fresh Start Theory | Budgets Are Sexy

Have you ever heard of the “fresh start theory”?

It’s basically a theory that people are more likely to tackle and achieve their goals if they begin them on a landmark date … Like the 1st of the month, their birthday, January 1st, or any date of significance.

Landmark dates are motivating. They mark the exact date when you stop being the old you, and start being the new you! They encourage forward-thinking activities, instead of past habits and happenings.

2020 is almost over. Byeeeee 👋 . 2021 is nearly here. Woohoo! 🎉 It’s time to set some goals using Jan 1st as our landmark date!

(I know, New Years goal setting is kinda cliche. But, goals are necessary. And, if you don’t set goals now, when are you gonna set them?)

My 2020 Mid-Year Goals Recap

Six months ago, I shared some goals for this past year. Here are some cool things we accomplished this year…

• Roth IRAs funded! Wife and I funded our favorite flexible tax-free accounts in January 2020. We contributed the max amount ($6k into each Roth), and we’ll be prioritizing this again in 2021.
• I got a job! And not just any job – a fun one that lets me work when and where I please :). I’m extremely thankful to find work and remain gainfully employed through one of the toughest job years in history.
• We gifted $2,500 to a new baby nephew. My wife and I set up a Unified Gift to Minors brokerage account for our newest family member. This money is invested in a total stock market index fund and will hopefully grow to be 5 figures when the kid turns 18!
• We sold our spare car! It was sitting and collecting dust for too long! The $7,700 cash we sold it for went straight into the stock market. Not only has this investment increased about 10% since then, we’ve also saved $160 per month in car expenses since August.
• Made more than $3k in sign-up bonuses! We ended up making $2,200 from churning bank accounts and $1,200 from opening 3 new credit cards. Pretty dang good!
• I got some health insurance: This was on, off, then back on my list throughout the year. After a bit of luck, I was able to score some benefits through my employer starting in October.

And some goals we didn’t accomplish 😔…

• Buying people stocks instead of birthday/Christmas gifts: My plan was instead of giving people physical presents for birthday/Christmas, to buy them stock in various companies instead. I did this for my Dad in the past who loved it! But, as it turns out, other members of my family think stocks are boring… (And apparently gift giving is supposed to be about the receiver, not the giver – who woulda thought?). Anyway, my family all got physical presents this year.
• Sell a rental, refinance the duplex & invest in another real estate partnership: Almost all my real estate goals were squashed in 2020. And, I’m fine with it! I don’t think waiting is a bad thing… Patience is important in volatile years and opportunities in real estate will come and go like buses throughout my life. I’m in no rush. 
• Foster/adopt a kid: We did make some small progress toward becoming an approved resource family. It’s a long process, and we’ll continue this through 2021.

A million other little good and bad things happened this year, most of which we didn’t really plan for. So it feels weird listing them as “accomplishments” because some were out of our control… Things like passing $500k in net worth for the assets we’re tracking, receiving a government stimulus handout, spending only $332 this year on restaurants (our budgeted amount was $2,400), losing 5 figures on some of my rentals from missing rent and vacancies 😳, etc.  

This year was really hard to predict. I think you will all agree! How did you go on your 2020 goals this year?

My 2021 Goals & Stuff to Figure Out

Here’s what my wife and I are planning for next year…

Financial stuff:

• Roth, Roth, Roth!: My wife and I were late to the Roth game and have been trying to play catch up ever since we opened our accounts in 2016. They are one of the most flexible accounts for early retirees, and we plan to invest as much as we can each year, as early as we can each year. Even if it means selling other assets to fund them, Roth IRAs are our No. 1 priority.  $6k is the limit for 2021 to invest in each Roth account.
• 100% contributions to 401(k) (until it goes away): My workplace notified me that my benefits plan (healthcare and 401(k)) will be terminated at the end of March 2021. It is yet to be determined whether alternatives will be offered, but my guess is no.😪  So I want to stuff as much money in my 401(k) as possible early in the year. I don’t earn a huge amount from this job, so 100% contributions in Jan/Feb/March might only be ~$7k or so added to this account.

• Sell a rental property: I still owe y’all a post on why I’m slowly transitioning away from rental properties. Anyway, our plan is to sell 1 property this coming year and transition the money to our brokerage account. This might be $25-50k depending on the property we sell and price we get after fees.
• Build a donation machine!: I’ve been thinking about setting up a donor advised fund with Fidelity. It’ll allow us to invest our donations, and direct them to charities when we see fit later in life. Starting probably very small, like $2k, we can add to this each year and possibly grow it into a self-sufficient foundation!

Family, fun & community stuff:

• Continue the foster/adopt process:  It’s still weird talking about this publicly, because my wife and I are a little unclear about where this road will actually take us. What if we get all the way to the end and realize we’ve bitten off more than we can chew? What if we try it and decide fostering isn’t for us after all? I’m guessing all new parents have feelings like this no matter how kids come into their life. Anyway, I’m happy to share more info about this if you guys agree to not hold it against us if we decide not to end up adopting anyone. Deal?
• Travel while working remotely: Due to covid, my wife and I cancelled a 10-day trip to Hawaii, and a 9-day all-inclusive trip to Mexico in 2020. We’re planning to re-book these trips this coming summer… And now that I work 100% remotely, we want to try working while traveling. This is kind of a test — working while traveling is easier said than done 🙂
• Buy/sell more stuff online — earn $1k cash:  I’m really having fun hawking random items when I find them out and about. The reason I haven’t set a $ goal around this activity thus far is because it’s kind of unpredictable, and I treat it more like a hobby vs. a side hustle. That being said, who knows, maybe I can try and shoot for making an extra $1,000 this year? I’ll start keeping track!
• Podcast guest spots:  This year I was a guest on 3 podcasts, and have a few offers to be on shows in 2021. I’m not a huge fan of having my voice recorded, but doing uncomfortable things keeps me on my toes. I’m shooting for another 3 speaking spots this year.
• Create a short writing course for beginners:  Last year I created and hosted a short writing course, teaching people some basics I’ve learned over the past few years. I’m planning to launch a V2 course and offer it to more people who want to start writing or blogging!

Your 2021 Goals?

People say goals should be specific, measurable, have deadlines, etc. I agree, though I don’t think annual goal-setting is a single activity that can be done in one sitting. For me it’s an evolution; a constant process throughout the year…

Generate ideas → list them in order of priority → clarify goals → determine steps → action → tracking → adjustments → more action → success.

You probably noticed some of my goals aren’t very specific. That’s cool with me and I’ll be fleshing them out over time.

If you haven’t put much thought into your financial goals yet, here are a few common ones to get your juices flowing:

• Pay down x amount in debt
• Save and invest xxx  (don’t know how much to save? Try this calculator I found on Best Interest Blog that generates a $ figure goal to save in 2021)
• Achieve savings rate of xx%
• Introduce a friend to the FIRE movement!
• Rebalance your portfolio, or try investing in a new asset class
• Start side hustle of xyz
• Buy a rental property
• Refinance your house, or auto loan, or student loans!
• Donate $xxx to giving and charity
• Declutter and sell stuff you no longer use
• Try to improve your credit score!
• Build up your emergency fund
• Take a course, progress study, learn xyz skills
• Negotiate full time work-at-home or better work/life benefits
• Achieve FI, quit your job, and buy a one-way ticket to remote island?

What’s on your 2021 list?

Have a great week, and HAPPY NEW YEAR!!! 🎉 🎈🎉 🎈

(ps. We’re taking this Friday Jan 1st off. Posts will resume starting Monday the 4th!)