Monday, January 4, 2016

Resolution Failure...(Or Why I'm Giving Resolutions 1 More Chance)

Having often made fun of 'New Years Resolutions' put me in a bit of a conundrum when starting this post. First, I am all about goals and setting benchmarks. Benchmarks help you to evaluate how you are doing, as you progress. However, as a long-tim gym member, I will admit to rolling my eyes, groaning and avoiding peak hours the first 2 weeks of January as people who made a new year's resolution to 'get healthy' in the New Year ambled around my gym using all the prime exercise equipment only to vanish a few weeks later (a bit judgy of me, I know!). I give people credit for trying, but calling something a "New Year's Resolution' almost makes it synonymous in my mind with a goal that isn't going to be followed through on. Like, if you are so serious about this goal- why did you wait until January 1st to kick it off anyway?? Probably not fair of me (sorry... not sorry).

In the spirit though of a fresh start, I'm going to give New Year's Resolutions 1 more shot. This is the last time though- if this time doesn't work, we are going to go our separate ways for good! With launching this blog a few weeks back, the timing is great to roll out what our financial goals are for the next year. But first, why have financial goals in the first place? I have found that while really important, managing your finances (especially long-term finances like retirement) get pushed to the backburner when other important life events distract us or get in the way. Having a tangible plan has been demonstrated to have more results. For example, 'save more money' likely won't have the same impact on your future spending, as setting a goal to save $200 each paycheck towards a fund for emergencies. Accountability is also huge, whenever you are starting a new goal, whether it be for finances or for getting in shape. I plan to check back in 3-4 months with a resolution update and let you know how things are sitting!

So with no further ado, the Frugal Rock Financial Resolutions for 2016:

- Do something with old 401k accounts. So this is a biggie. I have one retirement account from a previous job that I was at for about a year. The account only has a few grand in it, and it's been passively managed since that time. While I'm not 'losing' money, the current retirement account charges me a pretty high expense ratio (meaning they take a pretty large cut when money is made, thus cutting into my profits) and the actual investment options aren't great. My goal is to rollover the funds into another one of my other retirement accounts, so I have more control and also can avoid those high fees.

Time Commitment: LOW


-Find a way to reduce my commute by biking at least one day a week (or 52x in 1 year). I talked about my struggles with my commute in 2 recent posts (here & here) where I wanted to reduce both the time spent in my car and the expense/carbon footprint of my driving habits. In order to make this happen, I need to work on increasing my cycling fitness to enable me to be able to bike 30 miles in one day (my roundtrip commute) and have recently begun doing some research on electric bikes as a possible alternative to assist me in commuting this way more consistently.

**Update: I have fallen in love with an ebike at a local bike shop. After dragging Mr. Frugal Rock to check it out, I'm thinking we may be adding an electric to our bike arsenal in the near future- after watching for the price to drop post-holiday**

Time Commitment: HIGH- all that biking/training time adds up. If I do decide to purchase an ebike there will also be a financial commitment as well. I'm hoping that the amount I spend will be easily be countered by the amount I will save with reducing my driving commute/gas/car maintenance, etc. I'm also counting of the long-term health benefits of biking daily!

Results: SLOW- it may take me a bit to reach this goal- I currently am very comfortable biking half the distance, about 15 miles, but will need to work on getting closer to that 30 mile mark. In other words, after 15 miles I'm a sweaty mess (overshare!) so need to work on my stamina or install a shower in my office at work...

- Aggressively save to pay off our mortgage early. For me, debt is debt- while there are some good reasons to hold a mortgage, 30 years seems like craziness to me. If it takes 30 years to pay off a property, it makes me wonder if it was actually more than the person could afford. While that may be controversial, too many people become slaves to their housing payments (mortgage or rental) and aren't able to do the many other things they want to do because they are so locked in to that high payment amount.

That's why the Frugal Rock Household has a plan to be mortgage free. It's contingent on quite a few things- both of us maintaining our same day-job income, and our 'side' jobs continuing to help fund additional income for us. My hope is that if our home is paid off in less than 10 years, that it will give us increased ability to explore new career paths and investments, while also allowing us to sock away additional funds towards our dreams of 'early' retirement.

Time Commitment: MINIMIAL- now that a plan is in place. Each month both of us have automatic withdrawals from our checking account into our savings account. At the end of the year, we take the funds and decide where to place them for maximum reward/safest return (since we want to be able to access them in a few short years).

Results: SLOW

- Continue to explore 'side jobs', or as I keep seeing it identified as online, 'the side hustle'. Side jobs are a great way to increase income in a 'fun' capacity. It can literally pay to do what you enjoy, if not full-time, at least on a part-time basis. Some ways we did this last year was doing some contract work on the side (training for Ms. Frugal Rock, and machining contracts for Mr. Frugal Rock). Other side projects for revenue in 2015, included selling repaired items on Craigslist, like a snow blower we got for free from the neighbors that Mr. Frugal Rock, fixed and sold for a profit.

For 2016, we both hope to continue doing those side projects, while also looking at other ways to get our products out there. We've discussed starting our own Etsy page and also looking for ways for writing to be more than a hobby and possibly generate more of a side income by doing some free-lance work on the side...This one is more of a pipe dream right now, but it's good to have a 'reach' goal!

Time Commitment: EXTENSIVE

Results: Unknown and No Guarantee

-Embrace budget travel. I love to go to exotic places BUT have realized there are many great places within a days drive that we have never traveled to. This next year we have decided to embrace our love of camping/hiking and are limiting our travel to more budget options, staying with friends/family when traveling or hiking/backpacking. We've reserved a few places already for 2016, including a road trip to FL in January and our own private beach campsite looking over Lake Michigan in the summer. I feel calm just thinking about it!

Time Commitment: LOW

Results: HUGE (for our mental health ;) but easy to go overboard with spending, so we will have to be careful with this one!

What about you? Are you making News Year's Resolutions this year? Do you have any financial goals you want to make for 2016 (paying off your student loans, or car payments? starting that retirement fund?)?

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