Review Your Year's Financial Goals

Saving Money Tip #216 - Review Your Year’s Financial Goals. It’s that time of year again – the end of the year when everyone wants to wrap presents for the holidays and wrap things up for the year. Added to the craziness of holiday activities are all of the last-minute things we need to get done by year end – getting all of the doctors’ appointments in to finish off your Flex Plan, losing those last 5 pesky post-baby pounds, making the last of your donations to take advantage of tax write-offs, and trying to meet all of the other goals you set almost a year ago.

One of those goals should have been a financial goal – whether it was paying off the half of you debts, saving $5000 in a retirement account, starting an education fund for your child, or simply following your budget and your overall financial plan. With only two weeks left until year-end, it is time to start reviewing the financial goals you had set for this past year. How well did you meet them? Were your goals realistic – too pie-in-the-sky or perhaps, not high enough?

When you review your goals, look at what you accomplished and try to analyze those goals you were not able to meet. Pull out your budget and study it. Were your budget categories and amounts realistic? Or do they need to be adjusted? The only way to have a good financial plan is to improve on the one you have. If most of your goals have been unmet, analyze why that is so. If you were way off on budget estimations, adjust them. By reviewing this past year’s financial plan you can be better prepared to make realistic financial goals for next year.

In Real Life (IRL) – I’ve been reviewing my budget lately. And what I have come to realize is that I grossly underestimated spending in the gift and “unexpected” categories. Our family’s budget for gifts is $100 per month. We don’t follow budgets strictly to the dollar in any sense of the imagination. But the budget is there to give us an idea of how much money approximately is allocated to each category. One hundred dollars per month was supposed to cover birthday gifts, Hanukkah presents, and gifts for any other special events such as weddings, bar-mitzvahs, graduations, etc. This year seemed to be the year for every one of our relatives to get married or do something special. We were invited to an out-of-town bar-mitzvah and two out-of-town weddings that we didn’t know about (we didn't attend all of them). This not only dug into our gift category but also other categories since celebrations entail other expenses – driving to the event, hotels, clothing, etc. These were all expenses that we didn’t plan for this year.

In addition to the family celebrations, my husband’s only aunt found out she was dying of cancer and had only months to live. Of course he wanted to see her one last time, and she lives in Germany. But no budget would hold him back from that trip. So he and his mom made last minute plane reservations and flew to Germany. Along with the airfare, came gifts for cousins and other relatives he rarely sees. This trip entailed a big expense that we didn’t plan for.

One of our financial goals was to make a $5000 contribution to our Roth IRA plans and a $2000 contribution to each of our children’s Education Savings Plans. The children’s plans are complete. We are a bit short on our Roth IRA contributions. (I’ve made $4000 to mine and my husband has made $3000 to his). We actually have until April 15 2010 to make 2009 contributions, so we will do that. But some of these extra expenses we incurred came out of moeny that we were going to contribute to these plans.

Over the next week or two I will continue to look at where my budget categories were realistic and where they were off the mark. And then I can use the notes I make to prepare our budget for next year. Have you reviewed your financial goals and expectations from this past year? How did you do? For other financial tips, check out Frugal Fridays.