As have done many, I thought I would take a moment to share with you where my financial “head” is right now. This is usually the time of year when most people are either taking a look back at the year they had in 2009, or taking a peek ahead at what’s in store for them in 2010 financially. I thought I would do both.Before I do, I wanted to let you in on a little secret. I know that I have been a big advocate of financial “goal-setting” and I firmly believe in its importance. My secret is this: I don’t set goals. What? Are you screaming “imposter” right now? Calling me a fraud?Well, hold on just a second. What I mean to say is that I don’t set goals in the traditional sense. As I have read the retrospectives and goals of other people out there, it occurred to me I don’t set goals. Again, just not in the traditional sense. For example, my journey out of debt. I basically had no benchmarks, no “six months to do this”; no “by the end of the year” do that, nothing. My approach, as with most things, is similar to a bull in a china shop. I was horrifically in debt, and I knew I had to do something or I’d be suffering for the rest of my life. So, I stuck my head down (figuratively, of course) and simply bulldozed my way through my entire financial mess, until it was clean and clear and I was ready to move on. Then as I have also written before, I was kind of in a funk for about a year or so, because I didn’t know what to do with my newfound financial freedom. Meaning, I didn’t know how to get my so-called “extra” income to start working for me. Here, I probably could have used a clear set of goals, I just didn’t have them. Once I figured it out though, I simply put into place the steps that I wanted in order to start building for my future.An example. If you think that you will be able to reduce your power bill by 15% in the coming year, then why make a goal out of it? Why write down “I want to reduce my power bill by 15% in 2010.” To me, that means you can goof around the whole year before finally doing something about it. How about this. If you’ve identified a way or ways to make this happen—put them in place. Get going. Do it right now. This has always been my approach to just about everything.I know that there are some things that take time, and for these, a set of goals would be good. But as I read the retrospectives of others out there and also their goals for the coming year, it occurred to me that a lot of the things that I was reading could be put into place on a more immediate type basis.Having said that, here is my brief look back at 2009, and a concise look ahead for 2010.2009This was definitely a year of simply “holding on” for me. I did not lose my job; however, I did take about a 28% pay cut. Basically, my bonus compensation was eliminated for the year, and it was/is a big chunk of my monthly income. It wasn’t eliminated; it was simply that the financial results of my department(s) did not match up with some budget numbers that were generated before the downfall in the economy.I basically knew it was coming before 2009 started, but it did take a month or two to slash our household’s spending. Mine is a one-income household, with a three year old son at home, so things were tight anyways. Well, as I said, there was no time to sit down and map out a set of goals. I had to slash spending, and slash I did. We eliminated just about all forms of discretionary spending, and I cut back slightly on some 401k contributions and I did not contribute much to my Roth IRAs this year. It killed me to do this, but as they say, you have to pay yourself first. I also paid off our second car this year, which eliminated $250 from our monthly budget. This could not have come at a better time.That was part and parcel my 2009 financially speaking.2010Looking ahead, I of course hope to get back on track with my bonus potential at my job. It was a good lesson learned. This bonus money really just began for me in 2008, and our household did not handle it very well. I kept less track of spending, and really got a little sloppy with a few things. It was the first time I had experienced such a windfall (basically, a 2% increase in one year) and to be honest we did not handle it very well. However, there were no “beat up” sessions, it is simply a lesson learned.If/ when I do get back on track, I‘d like to return to my 401k contribution percentages, and even make up for what I did not contribute this year. I‘d like to do the same with my Roths, as long as I stay under the contribution limits.In addition to this, any savings/spending/investing ideas that I come across in 2010, I plan on putting them into place as soon as I can figure out how.And, on a side note, I want to get rid of these 10 pounds that have been nagging me for a few years now, and keep them off! Having a sound body goes a long way to having a sound mind.Agree with my mindset? Disagree? Have your own plan you’d like to share? Let me know—I love your comments.For those of you who would like to learn more about financial goal-setting and other topics, visit me at Your finances101.com/blog
Causes David Bakke Supports
Anyone's desire to get out of debt!
I also generously support The Salvation Army and the Vietnam Veterans Association.