Goals for our new life
This year has been a bad year for goals.
I didn’t set any financial goals, aside from maxing out our retirement accounts for the year and increasing cash savings by… whatever they happened to increase by. I didn’t set any personal goals. I did run a marathon, but other than that, I let my running slide.
This year was all about finding a new job (for both T and I), dealing with being apart so much, and accepting the big life changes that were coming our way. Honestly, that was enough, but not enough to call it a goal.
Next year though? We can set goals!
I have my job offer with a start date set in early January. The raise is a little smaller than one would expect for changing jobs, but the bonus structure means it could turn out to be a very significant raise if I do well. Since I’m changing industries, my bargaining power was a little bit weak. I tried though! T has had his offer, and his salary more than doubled from his post-doc salary. We will have just one place to live, a place we will both call HOME.
In short, from a finance perspective, things are more predictable than they have ever been. My little planner heart is so happy, and I couldn’t stop myself from making a few preliminary goals. Very preliminary, as I haven’t discussed with T yet!
- House fund: $100,000 (we have a head start on this)
We would like to put 20% down. Our goal is to be able to pay our mortgage with one salary. At most, we will be looking in the $700k range two years from now. I’d like to spend less, but I’m not sure what the market is like there.
- Baby fund: $8,000
Arbitrarily, I’d like to have $20k in a baby before having a baby, no sooner than 2 years from now. As we think more about this, the number may change. At any rate, it seems prudent to start setting aside this money right now.
- Car Replacement Fund: $3,500
I’d like to have $25k for a new car several years from now (2021).
- Retirement: $45,000 contributions
Max out my 401k and save $27,500 in T’s retirement vehicles
We hope to allocate a good amount of money to explore & enjoy our new city, since we are opting for a cheaper place to live in order to do this. I want to plan my dream vacation of Nepal / Annapurna for the fall, pending our work schedules.
Reflections & Advice Wanted:
Two things come to mind when looking at these plans.
1. That looks like a lot of cash on hand. What is the best way to minimize opportunity cost in the next 2 years? We currently use simple high yield savings accounts. CDs? I-bonds? T-bills? Money Market? Something else?
2. Does it really make sense to save for a baby in a car, when we could quickly amass those savings when the time comes [once we are no longer saving for a house]? Probably not. Especially not the car. I mean, 2021??? Seriously? And if not, should we dump the excess into T’s retirement (can contribute about $7k more)? Or just get our downpayment faster? Or what? I’m leaning towards retirement (tax shelter).