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2013 New Year’s Resolutions

by retirebyforty on December 31, 2012 · 37 comments

in goals and milestones

2013 new year's resolutions

Happy New Year!

Happy New Year Everyone! 2012 went by so quite quickly, didn’t it? 2012 was a year of changes for us and I think we need to take it a bit easier this year. 2013 will be the year to shore up our finances and gather ourselves.

Baby RB40

Let’s start with a goal for Baby RB40. He is almost 2 years old and he doing quite well on all the regular benchmarks. For 2013, we would like him to make a friend. This is quite a difficult goal because it’s hard to meet kids his age in our area now that he isn’t going to daycare. Also, kids this age don’t seem to play together much, even if there is a playgroup available. We’ll see if he can do it.

Financial goals

Let’s move to some financial challenges to overcome.

Contribute $11,000 to Roth IRA

We haven’t contributed to our Roth IRA account for a few years because we were over the income limit when I was employed at a corporation. For 2013, the Roth IRA limit is $5,500 per person. Actually this goal should be pretty easy to meet. I’m planning to just move some money from our taxable account to our Roth IRAs. I just need to sit down and do it.

Contribute $17,500 to Mrs. RB40’s 401(k)

The maximum contribution for a 401(k) plan will rise from $17,000 to $17,500 in 2013. She maxed out contributed $16,985 this year and we just need to raise the deduction a bit to hit $17,500. This one also shouldn’t be a problem.

Contribute $10,000 to Baby RB40’s 529

This is part of the plan to front load Baby RB40’s 529 college fund. The financial advisor at Personal Capital advised this and I think it’s a good idea. We’ll add more money now while he’s young so the 529 has more time to grow tax free. We will throttle back in a few years.

Generate $18,000 of Passive Income

This one will be pretty close. Here is my projection of our passive income for 2013.

  • $7,500 from dividends
  • $7,500 from rentals
  • $500 from interest
  • $1,200 from peer to peer lending

As you can see, it’s a bit short of the $18,000 goal. I’m planning to increase our dividend stock investment so that might be enough to close the gap. The rentals are also a big challenge due to the zillions of repairs we had to address. We’re about even in 2012 so it might be difficult to hit $7,500 next year. We’ll see how it goes. The $18,000 goal is pre tax.

Generate $18,000 Online

We generated about $13,000 from my online business this year. It will be a big challenge to hit $18,000 (pre tax) in 2013, but I’m setting this goal the same as the passive income.

Stretch Goal – Contribute $5,000 to a solo 401(k)

At this point, I don’t think I’ll have money to do this, but that’s why this is a stretch goal. A solo 401(k) is a 401(k) plan for the self employed. You can sock away quite a bit of money here if your business is generating a lot of income. The limit is the same as a regular 401(k), but the business can contribute
20-25% extra to the 401(k). I need to do more research on how to open this account.

A couple of late additions

  • Put together a will
  • Buy life insurance

Personal goals

For 2013, I’m going to follow Frugal Portland’s lead and make a list of things I’d like to do.

  1. Take a trip. We’re thinking about taking a 2 week road trip to California to visit Yosemite, the Bay Area, Santa Barbara, Palm Springs, and points in between.
  2. Avoid a midlife crisis! I’ll turn 40 next year and I really don’t want to have any kind of melt down. :)
  3.  Enjoy being a stay at home dad. Baby RB40 is growing so fast and I need to enjoy being a stay at home dad as much as I can.
  4. Come up with a sustainable exercise program and do it.
  5. Go to a convention.
  6. Join Toastmasters.
  7. Go camping at the beach in the summer.
  8. Go for a short hike in the Columbia George.
  9. Get a Zoo membership.
  10. Go to 10 local festivals in 2013. Here are some choices – Greek Festival, Cinco De Mayo, Oktoberfest, Chinese New Year, Comics Festival, Rose Festival, Blues Festival, and Highland Games. Mmmm.. I can’t wait until summer.
  11. Picnic at an Oregon winery.
  12. Go to 10 free musical/theatrical performances. Let’s not miss the Symphony at the Waterfront this year.
  13. Have a drink with blogger friends in Oregon and California including Financial Samurai, Frugal Portland, and Money Spruce.
  14. Try a new beer. This shouldn’t be too hard in Portland.
  15. 2013 No Spend Challenge: Clothing.

Blog goals

My main goal for 2013 is to hit 100,000 page views per month at some point. I also want to increase the quality of the articles and maintain the 3 days/week posting schedule. Mrs. RB40 told me the articles are getting a bit dry lately so I need to inject some fun into the posts more. Overall, I think we just need to make some incremental improvements and stay the course. If you have any feedback, I’d love to hear it.

The key to achieving your goals is to keep track of your progress.  I’ll be checking in at least once a quarter to see how much progress I’m making.  What are your goals for 2013? Don’t forget to add some fun activities in your list.

{ 36 comments… read them below or add one }

tom juhn December 31, 2012 at 1:57 am

What is your online income from?

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Glen @ Monster Piggy Bank December 31, 2012 at 4:59 am

Good luck with all your goals in 2013.

I would love to be a stay at home dad, but I am too used to the lifestyle which my job allows me to live.

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retirebyforty December 31, 2012 at 3:31 pm

Thanks! We’re comfortable right now so I don’t think we sacrificed too much. It’s nice to have less stress too.

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Michelle December 31, 2012 at 7:43 am

Good luck with your goals! 100K page views sounds amazing :)

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retirebyforty December 31, 2012 at 3:32 pm

If Google is good to us, then I think we can do it. Otherwise…. :)

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Justin December 31, 2012 at 7:46 am

One of my goals was/is to fund a Roth but I really don’t like the fact that it is stuck till 60 without penalty, Wouldn’t you like to still make a decent return (like prosper) and have a little bit more liquidity? I have found that at certain times in life up to this point, there have been some critical investment times that I was not able to capitalize on due to liquidity issues. Hit me up for Santa Barbara recommendations when you are ready as well.

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retirebyforty December 31, 2012 at 3:34 pm

You can withdraw your contribution at anytime without penalty so I don’t think it’s a huge problem. Our goal is to avoid withdrawal until 60 anyway. We lived in SB for about 5 years, but I’m sure it changed quite a bit now.

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krantcents December 31, 2012 at 9:35 am

Great goals! Have you thought about getting another rental? With vales and interest rates so low, it is still buyer’s market.

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retirebyforty December 31, 2012 at 3:35 pm

I think 2 rentals are enough for us. I’ll probably go with REIT for more real estate investments. Rentals are a lot of work.

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Patrick December 31, 2012 at 10:56 am

One method of being frugal with your money while adhering to a workout regimen and build interesting skills at the same time is recycling your used grocery bags and milk jugs … or OJ, or any gallon jugs for that matter. Once you get strong enough you can graduate to the 5 gallon jugs.

There’s some good Youtube videos about how to recycle your grocery bags so you can make a 3-braid rope. This would come in handy to lash the milk jugs together. It also can be used for camping if you find yourself short of store-bought rope or cordage if you’re into camping / survival things.

And the milk jugs are self-explanatory. Each 1-gallon jug filled with water weighs about 8 lb. They make great small weights for a little kick to aerobic exercises, running, going up and down stairs, etc. Combine this with at least 2 miles walking a day and you’ll see a change.

For exercise, you have to remember that if you’ve never exercised before your body will HATE you for 6 months (3 if you’re young / relatively healthy already). It will suck and it will hurt. But after 3-6 weeks your body will get used to it, and after that time if you do NOT work out your body will complain. Exercise strong aerobics / weights every other day, and walk 2 miles daily.

The flip side of this is, eventually your food bills will go up as your body consumes more energy and your basic metabolic rate goes up. This is normal and I would say just do it. The money you save being frugal with the water weights will outweigh (haha!) the cost of extra food through saving on gym memberships. Though, that said, if you find you don’t have the willpower to keep it up yourself, find a workout buddy.

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Wayne @ Young Family Finance December 31, 2012 at 11:48 am

These are great goals. I’m especially interested to see how the $10,000 into the 529 plan goes. Putting in $10,000 in early would definitely be the way to go. By saving early, I’m sure you’ll need to save less.

Unfortunately, my wife and I have only been able to save here and there. However, I’m pleased that we are putting money away at all. They’ll need all the help they can get with the constantly rising tuition costs.

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sin camisa December 31, 2012 at 7:06 pm

My girl was born in 1999; so my big investment on the 529 plan early on did not pay, courtesy of the dot.com collapse. It took close to 10 years to get back to my original investment. Today we are sitting on about 25% gain (after almost 14 years) and praying for scholarships. The gamble it’s Wall Street.

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sin camisa December 31, 2012 at 7:09 pm

And of course, happy New Year and looking forward to following your progress and learning from your wonderful site.

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retirebyforty January 1, 2013 at 9:23 am

You’re right. It’s all a gamble, but it should work out in the long run. 25% is better than nothing and at least you don’t have to pay tax. Good luck with scholarships! Hopefully the market will do OK over the next 15 years for us…

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Moon January 1, 2013 at 7:38 am

Hi RB40,

I just came across your blog in December but have been enjoying it so far. Keep up the good work!

I have been making a lot of new year financial resolutions for me and my husband for the past few years and we have been able to keep all of them! Hopefully we can do the same for 2013!

Our specific goals this year:
1) Max out both of our Roth IRA (done – I already increased both of our automatic monthly contribution to make sure we max it out to the dot $11,000)
2) Pay off my husband’s student loan from his MBA (will be paid off in Oct with our monthly $700 payment directly paid out fom our bank)
3) Increase his 401K’s contribution to 12% (he is doing 10% right now and we are still debating how the contribution should be divided between ROTH 401K and regular. Right now it’s half and half. I showed him your article about this specific topics but he is definitely leaning towards ROTH on everything.)
4) Increase my ROTH 401K from 12% to 15%
5) Increase emergency savings for 25%
6) Make a monthly donation to a charity
7) Home Improvement – install plantation shutter to our house
8) Our goal is visit one new U.S. city per year (I wasn’t born here so I haven’t been to tons of U.S. cities but we do travel internationally) Last year we went to D.C. And NYC, this year we plan to visit Boston (and the New England), may be Australia this coming Christmas, if we meet all our goals above! ;)

We may not be able to do both 7) and 8). I am still determine on the domestic trip to Boston since I believe like you said, we should have some fun in life while keeping our priorities straight! Good luck on both of us on achieving our goals!

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retirebyforty January 1, 2013 at 9:27 am

Great goals for 2013! I haven’t seen many US cities either. Once our kid is a bit older, we’ll visit the East Coast more. I want to visit DC and NY. :)
Happy New Year!!!

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Lance @ Money Life and More January 1, 2013 at 8:41 am

I like the idea of frontloading the 529. That seems like a great idea if you can afford it!

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retirebyforty January 1, 2013 at 9:28 am

Hopefully it’s the right time to front load the 529. I’m sure college would cost $500,000 by the time Baby RB40 is ready for school. We might have to sell our rentals to afford it.

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Aloysa @ My Broken Coin January 1, 2013 at 9:26 am

Middle life crisis? :) I turn 40 this year too. Forty is a little early for the middle life crisis. Give it another five years! :)
Overall -great goals! I wish we could max out our 401K accounts. Not this year. Maybe next one.

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retirebyforty January 1, 2013 at 9:29 am

Happy New Year! I thought 40 is the midlife crisis year, but I guess 45 will do too. :)

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Elizabeth @ Broke Professionals January 1, 2013 at 11:54 am

LOL on having Baby RB40 make a friend – my son (he’ll be 2 in May) has a “girlfriend,” but they mostly just throw dirt at each other.

And I hear you on goal #3 – to enjoy being an at-home parent. It’s more work than most people would ever realize.

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retirebyforty January 2, 2013 at 1:44 pm

There are a couple of kids his age in our building, but it seems like their parents don’t want to do a play date or do anything with us. Kind of weird…
Being a stay at home parent can get really frustrating sometime so we have to remind ourselves to enjoy it while we can. They’ll go off to school soon, right?

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Will @ HackingTheBank January 1, 2013 at 2:01 pm

Great list of goals you have! The 529 plan is killer, hoping to front-load like that when I get around to having kids.

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retirebyforty January 2, 2013 at 1:45 pm

Thanks! Hopefully the 529 plan works out well or else he’ll have to go to a community college for 2 years. :)

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My Financial Independence Journey January 1, 2013 at 4:38 pm

Aggressive goals for the year.

Mine are to continue aggressively saving money, both in my dividend growth account and my soon-to-be oversized emergency fund.

My other big financial goal this year is to figure out if I should work towards buying a house. Houses in this area are ridiculously expensive and I’m not really comfortable with deferring investing for a few years in order to build up the down payment. I’m looking into rental property to see if that will be a viable option. A 2, 3, or 4-plex might be a good investment. But as yet, I’m not certain.

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retirebyforty January 2, 2013 at 1:46 pm

You should look around for a duplex. It will let you practice being a landlord and see if you like it. Good luck!

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KK @ Student Debt Survivor January 1, 2013 at 5:15 pm

Goals look great. I hope when I have kids I’ll be able to stay at home with them and enjoy every minute. I turned 30 today and I hear you on the decade birthdays. For some reason they seem monumental, right? Hoping 2013 is happy, healthy and financially prosperous for you!

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Integrator January 2, 2013 at 4:32 am

Happy NY Joe! My goal for this year and the next few years is to try and reinvest all of our dividends back into dividend paying stocks to allow us to increase from $25k yr to $50k per year dividend income by Jan 1 2018. I’ve never set new years resolutions before, let alone a target so far out so we will see how this goes!
Integrator

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retirebyforty January 2, 2013 at 1:47 pm

That’s great! Are all these dividend stocks in your taxable account? Good luck!

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Silly Lily January 2, 2013 at 6:03 pm

My suggestion is to mix the blogs with more family life, like Baby RB40’s latest development or what you’ve learned or seen by being a stay-at-home dad, etc. The family life add more spices to pure finance advises. I know I personally enjoy reading your blog more when any RB40 is involved. :) But perhaps I just know you guys too well. How about making the goal of going to SB with us this year? Let’s see if we can do it this summer!

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retirebyforty January 3, 2013 at 9:07 am

Thanks for your input. I will try to add more spices. Sure, let’s go to SB. Maybe we can rent a house for a week or something.

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Kathleen, FrugalPortland January 2, 2013 at 9:16 pm

Can you keep me posted about Toastmasters?

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retirebyforty January 3, 2013 at 9:08 am

Sure, I’m thinking about going to the PSU club. They meet at 6pm every Thursday. I’ll keep you posted.

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Shawn @ PipsToday January 3, 2013 at 11:06 pm

Recently, I read a blog post titled “A Monthly Financial Planning Checklist” at boomerandecho (http://www.boomerandecho.com/monthly-financial-planning-checklist/) where blogger share his monthly financial goal. I think, setting monthly goal is very effective to fulfill whole year goal, if it is “New Year Resolution”.

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Jeffrey Trull January 8, 2013 at 8:43 pm

I’m finally back in Portland after a long time away! Let’s try to meet up soon, and I’ll help you cross off #14, too, while we’re at it :)

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retirebyforty January 8, 2013 at 11:44 pm

Sure, I’m all for meeting up.

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