Shifting Focus – Updated Goals For 2009

Earlier this month, I wrote about my financial goals for 2009.  After talking things over with my wife for the past couple of weeks, we have decided to shift our focus – temporarily – away from aggressive long-term saving and towards aggressive short-term savings.  Here are the changes we plan to make -

Original Prioritized List Of Personal Finance Goals

  1. Fully-fund 403(b)
  2. Fully-fund 2 Roth IRAs
  3. Fully-fund 3 Education Savings Accounts
  4. Save for down payment on a new home
  5. Stay out of debt

Current Prioritized List Of Personal Finance Goals

  1. Fully-fund 403(b)
  2. Save for down payment on a new home
  3. Save for future automobile purchase
  4. Fund 2 Roth IRAs
  5. Fund 3 Education Savings Accounts
  6. Stay out of (non-mortgage) debt

As many of you know, I live in a home provided by my employer – as part of my compensation.  My wife and I, at some point, want to buy a home of our own.  We have decided to increase our non-retirement savings, so that we will have adequate funds for a large down payment, should we choose to buy a home.  Of course, I would prefer to pay cash for a home, and that might be what we decide to do, but we want to be prepared to buy, should we find a house that we like at a price we can afford.

We will still work towards fully-funding our Roth IRAs and ESAs for our children, but saving for the new home and a newer automobile will be higher on our list of priorities.  Again, we have no idea when we’ll actually purchase the home, and it might be several years from now, but we want to be prepared, just in case.  Having a solid down payment, on top of our current emergency fund, is very important to both of us.


NCN

http://www.ncnblog.com

No Credit Needed is a personal finance blog about debt reduction, saving money, and simple living. Thank you for visiting the site and please consider subscribing to No Credit Needed by Email. Have a blessed day!

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4 thoughts on “Shifting Focus – Updated Goals For 2009
  1. Kevin

    You might consider this further rearrangement:

    1) Fund 403(b) just enough to get employer’s match
    2) Fund 2 Roth IRAs
    3) home
    4) auto
    5) rest of 403(b)
    6) 3 ESAs

    The reason is that Roth contributions are generally more valuable than non-matched 403(b)/401(k) contributions. I max out my Roth before I worry about maxing my 401(k).

    Do you know about the exception that lets you withdraw IRA funds early, without penalty, in the special case of buying a first home?

     
  2. The Happy Rock

    Nice switch NCN. We are currently on a similar plan.

    1. Fund 401k to get company match
    2. Stuff the rest into a down payment fund.

    Recently we decided that we are going to sell our tiny condo and rent for a little while. It will remove the burden of having to sell and buy at the same time and let us get a great down payment ready. We would stay but our family of 4 has long since out grown our 900 sqft condo.

     
  3. Miss M

    I similarly split my long term and short term goals, I do save for retirement but not the maximum. I then save a lot of money outside of retirement, both straight savings and taxable investing. I have a lot of needs and goals that require cash before I’m old :)

     
  4. Kym

    I’m curious why you want to buy a house and potentially take on a mortgage when you have free housing as part of your compensation? If you no longer live in the company-provided house, will they pay you more? If not I don’t really see the point.