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My Goals for 2020

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Now that we’ve turned the calendar to another year, another decade, it’s time to figure out what goals we would like to set.

Specifically, in this post, I’m going to go over the goals that I’m setting for myself, why I’m setting that goal, and how I’m going to put a system in place to achieve that goal.

What are my goals for 2020?

  • Get out of debt – Bought a house in 2019 and bit off more than I could chew. Other life events have also thrown a wrench in my financial planning.
  • Save for retirement – I’ve put my savings on hold for the time being due to poor financial decisions that led to the debt, etc.
  • Incorporate a meditation practice – I’ve harped on it and studies show how much it helps. I need to do this.
  • Journal every day – When I remember to journal, those are generally good days. I need to do this consistently.
  • Read every day – Reading can only help me, so why wouldn’t I do it more? I’ll learn something new and it’s shown to provide some meditative benefits.
  • Spend more dedicated time with my son – I’ve found myself over the last month or so having my phone out more than normal. I mean, I’ve had quite a lot going on with work and mentally, but that’s no excuse. He deserves better.
  • Exercise regularly – it’s good for my body and my mind. It’s a must.

Typically, when you’re setting goals, you should be very specific. You’ll notice, that I wasn’t. I get more granular with my goals in the systems section.

My systems

Getting out of debt and saving for retirement we can lump into one system, as they both revolve around finances and me reigning in my spending.

Until April, this will be incredibly challenging, as I am currently paying my mortgage on my house and the rent for my apartment.

So until I get my house rented (I have tenants set to move in, in April), I’m kind of stuck. Once that happens, however, I’ll have the debt repayment pedal down to the floor.

Simultaneously, I’ll contribute $20 per month to my retirement account, just to get in the habit of doing it again. Start small, enforce the habit, then increase the dollar amount.

Meditation

Of my goals, incorporating meditation practice should be relatively easy. I know my preferred style – I’m not one to sit pretzel-legged on a cushion. I lay down on the floor, on my back, which some relaxing music playing.

The hard part is a) making the time for it and b) doing it consistently. To start, I’m going to set my alarm for 5 minutes earlier than normal.

5 minutes might not seem like a lot, but if I wake up 5 minutes earlier, that gives me 5 minutes to meditate. If I do that consistently for the next, say three weeks, those extra 5 minutes won’t seem that, and I can scale it to 10 minutes.

As I noted in last week’s article, when forming a habit, you have to start small and then scale up.

Reading

Reading every day. This is a must-do for me. It’s good for my mind, it’s good for my soul, it’s good for everything. I have a great many books on my list, but they will all fall into a specific genre – finance, philosophy, religion, or biographies.

The first one will help with work. The last three will help with life.

Every day, before bed, I’m going to read for 15 minutes. That’s my starting point. Once I get into the habit, the amount of time I read will increase.

Spending time with my son

Spend more dedicated time with my son. This is an easy one. Just stay off my gosh darn phone.

Keep it in my room or in the kitchen. Not in my pocket, where I can easily access it. Put the ringer on and leave it alone.

If it’s an emergency, someone will call and I will hear it.

This will also eliminate a distraction, so if he goes to bed for the night, I can immediately pick up a book without getting sucked into the social media black hole.

Exercise

Exercising every day. I read recently in a book about the Dalai Lama that exercising your mind is more important than exercising your body, so I’ve put that on the back burner.

I have a pull-up bar in the doorway to my bathroom and I do 5 pull-ups every time I go in, but that’s not enough dedicated, consistent time for exercise.

I think doing it in the morning makes the most sense. I’m too tired in the evenings to exercise. The question is, do I do this before or after meditation?

Probably after, as I need my mind at ease when I meditate.

So instead of waking up 5 minutes earlier, I’ll start by waking up 20 minutes earlier. Dedicated 15 of those minutes to exercise and the remaining 5 for meditation.

Related reading:

A Systematic Approach to Goals

Worthy Goals for You to Set and Crush

How Do You Set Financial Goals?

A Systematic Approach to Goals

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With 2020 staring us in the face, it’s time to review goal setting and the systems you can put in place in order to reach those goals.

“A goal without a plan is just a wish.” – Antoine de Saint-Exupery

That said, let’s look at systematic ways to approach goal setting and actionable tools you can use to smash those goals.

How to begin

  1. Large/Lifetime goals – These are things you want to accomplish throughout your life. They can be philanthropic, health, financial, etc. Figure these out first.
  2. Short-term – Now that you have your long-term/lifetime goals determined, you can break them down into shorter-term goals. Consider these stepping stones, and a lot of these will change as you age. For example, your philanthropic goals. There may be causes you care deeply about now, but that can change.
  3. Actionable steps – Once you have your lifetime goals broken down into manageable targets, it’s time to create steps to get there and I’ll illustrate that using the three examples above.
    1. Philanthropic – Research causes and charities. Pick the ones you most identify with. Review your budget to find out how much you can give. Do a little more research to find out if your donations are tax-deductible (most, if not all, should be).
    2. Health – Establish the specific reason you want to be healthier (for yourself, your partner, your kids, grandkids, etc.). Research a diet that could work for you. Research an exercise regimen that could work for you. Consult experts (i.e. nutritionist and personal trainer).
    3. Financial – Create a budget/spending plan. Cut expenses. Save for emergencies. Insure you and your belongings. Save for retirement.

Here are a few articles I’ve written in the past about financial goals:

Worthy Goals For You To Set And Crush

How Do You Set Financial Goals?

Systems

We can think of systems as the sub-category of actionable steps. A routine is another word for it. When it comes to goals and habits, you can’t rely on will power. You have put a plan in place to do the work for you.

Take exercising for example. You need to create low barriers for yourself. Wear your gym clothes to bed or have your bag packed the night before.

If you go to the gym, put your bag and your keys in a place where you have to pass them to get to your car.

If you exercise at home, have your routine and your equipment laid out and ready for you.

Habits

When it comes to creating habits, James Clear, the author of Atomic Habits, likes to break down the habit into bite-sized pieces.

For example, if your saving for a down payment, go to your banking app and transfer $1 from checking to savings every morning (or whatever amount is realistic for you).

When that becomes second nature, bump it up a dollar a day.

Another thing that James says is, “People ask me all of the time, how many days does it take to create a habit? My answer, all of them because if you stop doing it for one day, it’s no longer a habit.”

External versus Internal

This section is speaking specifically to mental health versus other goals. You could also consider physical health as an internal goal, but for this article internal relates to mental health.

There are several things you can do to work on your mental health. See a therapist, exercise, and start a journal. Those three are low-barrier, easy things you can implement into your day to help.

Meditation, medication, and other forms of mindfulness training/practice can also help. There’s a podcast that I listen to regularly called “10% Happier” that will help you with establishing a meditation practice.

Do some research about this. Meditation can and will take many different forms, and not each modality will be right for you. Some may find that magic mushrooms from a magic mushroom dispensary can help them to relax, whilst reading has also proven to have meditative benefits.

Financial Goals

It really is up to the individual as to what they consider, short, medium, and long-term, but my definitions are as follows: Short-term – less than 3 years. Medium-term – 3-15. Long-term – 15+.

My definitions are almost entirely based on the investability of those assets for that specific time period.

  • Short-term – Emergencies, a new car, what have you. This is money you will need soon, so risking it in the stock market is out of the question. High-yield savings accounts should be your go-to in this scenario.
  • Medium-term – Things like down payments for a house or sending your kid to college. What you’re saving for will dictate the vehicle that you use. If it’s saving for college, a 529 or a Coverdell ESA should do the trick. If it’s for a down payment, your best bet is usually a taxable brokerage account, as there are no fees for early withdrawal.
  • Long-term – This should be strictly focused on retirement. Assets should be in a retirement account(s) and invested (investment selection should be based on risk tolerance and time horizon).

Once you’ve established your short, medium, and long-term goals you can break them down into actionable steps as we talked about earlier.

Wrapping it up

Each New Year brings about resolutions that we hope to achieve. Whether it’s getting in shape or paying down debt, your barometer for success should be progress and consistency.

Are you in a better place than you were on January 1st? Do you have more saved? Are you still committed to the goals you set in the first place?

Yes. It feels great to set a target and hit it, but as far as I’m concerned, if you’re better than you were yesterday, that’s all that matters.

Take it one day at a time and keep your eyes on the prize. You got this!

Related Reading:

How to Set Long & Short-Term Goals (And Reach Them Too!)

Is it possible to earn money with cryptocurrencies?

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If you are looking to make smart money, you have wondered about your options, and have considered cryptocurrencies as an option. It can? Find out

In a world where everything is changing so dramatically and technology is advancing by leaps and bounds, people look for innovative ways to solve problems. The latter applies to all areas of life, including personal finance. Given this, you have surely heard the option of investing in cryptocurrencies today, making money from it and being the millionaire tomorrow. [Read more…]

Here Are 4 Fatal Credit Card Mistakes that You Must Avoid

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Owning a credit card is one of the greatest assets that you can have. However, the slightest mistake can cost you quite a penny. You can get a high-interest rate charge, incur a late fee, close the credit card or worst-case scenario tarnishes your credit score.

Nonetheless, did you know that the same credit card, when used correctly, can assist you in building a credit history? You can have a magnificent chance to save money, build credit as well as enjoy the awesome perks. You ought to avoid common credit card mistakes to make the most of your credit card. These fatal mistakes are as follows and ways to prevent them.

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401k Withdrawal Taxes and Penalties

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The 401k has grown in popularity over the last couple of decades because pensions have all but vanished; as a result, strategies around taking withdrawals and how to limit taxes and penalties are extremely prevalent.

In this article, we’re going to discuss the common penalties and taxes, and some of the strategies you can deploy to reduce them.

When a penalty typically applies

In almost all cases, a penalty applies if you withdraw from your account before the age of 59 ½. This is a 10% tax penalty. (Be advised: All withdrawals are subject to ordinary income taxes)

There is also a tax penalty if you fail to withdraw your Required Minimum Distribution (RMD). This applies to individuals over the age of 70 ½. This penalty, however, is 50% of the amount you should’ve withdrawn.

There are several exceptions, however.

Additionally, with the new Secure Act, there have changes to required minimum distributions, contributions, and others. For more information, click here.

When you are exempt from penalty

  • Withdrawal after 59 ½
  • Left employer after 55
  • Left employment in public safety after 50
  • Death distributions: your beneficiary is able to take distributions without penalty, regardless of their age
  • Totally and permanently disabled as defined by the IRS
  • 72t rule – Agree to withdraw the same amount for a fixed period of five years or until you turn 59 ½, whichever is greater.
  • Unreimbursed medical expenses: You’re allotted to withdraw the unreimbursed medical expenses minus 10% of your adjusted gross income
  • If you over contribute to your retirement plan for the year, you’re allowed to withdraw the excess without incurring a penalty.
  • IRS Tax Levies
  • Divorce: Depending on your state and how you settle the divorce with your former spouse, he/she can withdraw their respective portion without penalty
  • Roth conversion: you pay taxes on the conversion, but there is no 10% tax penalty

*All exceptions may have certain requirements that need to be met to qualify for the exemption. Please check with your 401k Plan Administrator and Financial Advisor regarding your personal situation.

Taxes

With regard to tax-saving strategies on 401k withdrawals, there are no short-cuts or exceptions like there was for the penalty section.

The best way to save money on taxes when taking distributions is to be strategic.

If the expense you are withdrawing for is something that can be planned ahead of time, determine your current tax bracket, figure out how much you’ll need at that future date, and withdraw slowly over time (how much you withdraw depends on how soon you’ll need it).

For example, if you are in the 22% tax bracket, are $10,000 from going into the next bracket, and need $40,000 for a down payment in 4 years, then withdraw just under $10k each year.

This assumes that your income and tax bracket will stay the same.

Another way to go about it is to utilize Roth conversions. If the intention is to minimize or eliminate your tax liability for retirement, do a Roth conversion every year. Just be mindful of where you are in your current bracket, so you aren’t bumped into the next one.

In this example, however, it can be counter-intuitive because in most cases, your tax bracket in retirement is lower than it was while you are working. This is commonsense, though. You’re making less, so logically you would be in a lower bracket.

With regard to taxes, it comes down to math. If you need to withdraw from your 401k, crunch the numbers and figure out how you can do that while limiting your tax exposure.

Related reading:

How to Save Money Effectively

Business Retirement Plan Guide

*Be advised – Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

10 Things You Should Know Before Taking Out a Loan

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Every year, more than 30% of people go through the process of taking out a loan for one reason or another. Some do it to pay for college, while others do it to pay off a past-due utility bill.

If you’re thinking about taking out a loan at the moment, you should know what you’re getting yourself into before you do it. Loans can be very useful when you’re responsible with them. But they can also turn into a huge headache if you don’t know what you’re doing when you take one out.

[Read more…]

Here’s Why You Should Get a SR22 Insurance

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Have you recently had your driver’s license revoked or suspended and you’re wondering how to go about getting it back?

One of the steps to getting your driving privileges reinstated is to obtain what’s known as an SR-22. This is required to show that you’re being backed up by a legitimate insurance company while on the road despite your past traffic offenses.

[Read more…]

Living with Anxiety and Depression

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A few weeks ago, I wrote a post about my personal experiences with anxiety and depression, and how those mental illnesses affect your finances. (See article here)

This week, I’d like to talk about what it’s like living with these two illnesses. Before I do, however, I’d like to show a graphic from Anxiety.org that sum the symptoms pretty well.

The most challenging part about having anxiety and depression is that no day is the same.

Sometimes, I can’t even tell they’re there. Although, to be honest, those days are very few and far between.

Other days, my anxiety is in overdrive, which is exhausting. I’m jittery, constantly worrying about things that I needn’t worry about, and I have a big ball of negative energy that’s ever present in my stomach.

I have to say, though, the days when my depression is dominant are the toughest. The only thing I want to do these days is stay in bed and sleep.

Isolate myself from everyone, and just deal with it alone. Which is counter intuitive because social interaction is one thing that helps the most.

Recent changes

My medication changed. I don’t know if I noted it in that prior post I alluded to earlier, but my previous prescription wasn’t doing the job.

I’ve been on my new dose for two weeks now. My doc gave me two medications. One to treat my depression and another to treat my anxiety.

So far, so good. My depression isn’t gone by any means, but it’s definitely reduced. Though, I will say, there are days when it flares up due to certain triggers.

My anxiety is, somewhat, better. The biggest positive is that I’m sleeping better, which is vitally important.

The biggest drawback I’ve noticed is something I didn’t expect.

A temper was passed down to be, and sometimes, it’s really bad. Over the past year or so, my depression has been so prominent that it’s muted my anger.

Guess what? The new medication is doing its job and the anger is making its way back.

So what do I do? Change my medications again? Or do I learn techniques to manage my anger? Techniques that will allow me to feel my emotions without feeling controlled by them.

Yes is my answer.

Meditation, relaxation, and exercise. The two former I’m incorporating into my morning routine. The latter will take place in the evening.

My new morning routine will go as follows: (all while listening to relaxing chillstep)

  1. Wake up 45 minutes before I have to get ready (shower, shave, change, leave)
  2. Start with 5 minutes with my neck/head tension reliever
  3. 10 minutes in my inversion table
  4. 15 minutes of meditation
  5. 15 minutes of Tai chi
  6. Turn on some classic 90s/00s hits to get ready to

My exercise routine changes everyday. At least 30 minutes each day.

Day 1 – Elliptical

Day 2 – Stretch

Day 3 – Pull-ups and lunges

Day 4 – Stretch

Day 5 – Resistance bands and jumping jacks

Day 6 – Stretch

I haven’t done enough to take my mental health into my own hands. Sure, I’m seeing a therapist and I’m taking prescription medication, but that’s not enough.

I need to move my body and relax my mind.

I’m also reading a book about the Dalai Lama right now, and it’s quite interesting. It’s giving me a different perspective on how I can go about my day and the mentality I can incorporate into my daily life.

How it affects my finances

Depends on the day. If it’s a depression day, not too much. Like I said, I want to isolate myself on these days and I generally won’t buy things to make me feel better.

If it’s an anxiety-ridden day, that’s a different story. Food is my go-to when my anxiety is running high. That negatively affects my  finances.

Bottom line, just make sure you are taking care of yourself. Whatever that looks like for you. Also, make sure you have a “person”. Someone you can vent to. Someone that checks on you.

Read More:

Choosing a Bed: Sleep Number vs Tempurpedic