My 2020 Financial Goals

Goals are key to success. It’s true, most successful people have some sort of goals. I’ve read that in a book somewhere, probably. I recently reviewed my 2019 goal results and now it’s time to set my 2020 financial goals.

I’ve already set my personal goals so the ones here are all financial stuff. I like to split those up because the focus is entirely different. I don’t want to muddy the waters on either end and want to have enough flexibility to get creative on both ends.

Last year, I set 9 financial goals. For, 2020, I’m adding one more to celebrate the new decade. You know, cause it’s ten years? Clever!

These 2020 financial goals won’t be too different from what I’ve done in the past. After all, if it ain’t broke, why fix it? The focus here as always is on things I can control. There is one goal dealing with dividends but most of them focus on investing more or achieving a certain savings rate or reducing expenses.

One thing to know is that I don’t like goals that require some external forces to get there. Grow my portfolio X% is an example. I can probably do that easily if the market cooperates or I could immediately fail if it hits a snag. There’s always going to be some external forces in every goal you set but my hope here is to minimize their impact if I can.

If this is your first time seeing my financial goals, I do them on a medal basis. I’ll set something reasonable at bronze then move on up with silver and gold. Setting the right goals mean I’ll mostly hit bronze with a rare silver or gold in there.

Is there a reward for the medals? Nope! Just a feeling of sweet success or sour failure.

Hopefully, these can give you some ideas on your own financial goals so let’s get started!

Portfolio Goals

Goal One – Invest more capital

• Bronze – Invest more capital than in 2019
• Silver – Invest 7.5% more capital than in 2019
• Gold – Invest 15% more capital than in 2019

2019 was a record year for me so I’m thinking this is going to be a tough one. I don’t have any expenses that are disappearing this year(like in did in 2019 with my car payment and wedding/honeymoon in 2018) nor do I expect my salary to go up much, if at all. That means the goals get a bit looser than last year on the silver and gold front.

I do think this is one I can easily fail next year. That’ll become much more likely if we finally buy a home this year as we’ve been tried to do for the past two years. Still, there’s no point in making it too easy and aiming low so I’ll try my best to beat 2019.

Goal Two – Collect more dividends

• Bronze – Collect $15,000 in dividends
• Silver – Collect $16,000 in dividends
• Gold – Collect $17,000 in dividends

I collected $12,948.77 in dividends last year. That was a 20.99% growth rate over the year before. However, this was a record year and one where I benefited from strong dividend growth after the tax rate cut. On top of that, we still had decent cash/bond yields at the start of 2019. The former will slow down now that the new corporate tax rate is fully baked in and the latter has come down throughout the year as interest rates fell.

That means I’m expecting dividend growth to slow down a bit. The bronze here represents a 15.8% growth rate which I think is doable. I also like that the numbers are nice full dollar amounts!

Silver is 23.5% and Gold is 31.3%, both of which will be tough to hit. They’ll certainly require a record year of new capital and some good dividend increases from my holdings.

Savings Rate Goals

Goal One – Achieve a certain gross income savings rate

• Bronze – Gross income savings rate of 33%
• Silver – Gross income savings rate of 39%
• Gold – Gross income savings rate of 45%

I saved 42.8% of my gross income last year so I want to make this harder in 2020. However, I still like the 33%+ as my bronze medal because it conforms to the 1/3rd in savings, 1/3rd in expenses, 1/3rd in taxes rule. It’s an arbitrary rule but it’s something!

This will be largely driven by whether or not we buy a house this year. If we don’t and all other things go well then I think a silver is doable here but a gold will require some work. If we do get a home then a bronze might be a struggle.

However, since this is really the driver of investing success, I’ll make sure to stay focused on this and save as much as possible when I can. It helps that I can max out my 401k and HSA to help minimize taxes paid as well and improve my ability to save.

Goal Two – Achieve a certain savings rate

• Bronze – Savings rate of 43%
• Silver – Savings rate of 51%
• Gold – Savings rate of 58%

This savings rate moves in line with the gross income savings rate. However, this one ignores taxes and is a pure comparison of expenses and savings.

In 2019, I hit a savings rate of 56.5% so I’m taking this one up a notch as well. Again, I’m keeping the bronze a reasonable 43% and taking the other two medals up quite a bit. I want to still have a shot at this in case I buy a home but want the gold to be a stretch even if I do great like I did in 2019.

I like to track both savings rates as tax liability in retirement is difficult to estimates. It’s likely that my taxes will be a lot lower then since my income won’t be as high as all I really need to do is cover my expenses when I retire. I don’t need to save anymore!

Goal Three – Achieve a savings rate of 50%+ in X months

• Bronze – Savings rate of 50%+ in 6 months
• Silver – Savings rate of 50%+ in 9 months
• Gold – Savings rate of 50%+ in 12 months

I hit a savings rate of 50% or more 8 times last year. That’s why I want to stretch myself in setting my silver goal one above that. I think six is doable even if I purchase a home. After all, expenses are often concentrated in certain months allowing me to save more in others.

Even in 2018 when I had a honeymoon and wedding, I still hit 50%+ in six months. You can see that in the graph below.

Sure, 2018 may have had some negative months which hit the overall savings rate but the individual months still did well at times. There’s always months like February where I usually get a bonus plus months like November which is usually a three paycheck month.

Those help to buffer any expensive months. That’s why I like this as a goal. It helps me offset any high spending months and really buckle down after I have an expensive month. That means that even if I get a house, I can offset an expensive month or two with one of higher savings.

That type of consistency in saving is key. I already know I’ll have some expensive months coming up as I have some trips planned so I’m hopeful I can start off the year strong and get a head start on this goal during the colder months.

Expense Goals

Goal One – Reduce monthly bills

• Bronze – Reduce one bill in 2020
• Silver – Reduce two bills in 2020
• Gold – Reduce three bills in 2020

This goal is pretty simple. I’ve got a lot of monthly payments, the goal is to reduce one or more this year.

I actually failed this goal last year mainly cause I hate calling places. Hopefully, I can change that this year and reduce one of my bills. Comcast is one I have my eye on since I’m paying entirely too much for internet right now. I’m sure I can figure out some others too!

My wife actually inspired me to definitely try to get this done this year. She rents a storage unit and successfully called and reduced the monthly cost by about $40 last month. It was pretty cool but storage units are entirely too expensive and it’s another reason we want to get a house since our tiny apartment is tiny!

Goal Two – Reduce utility and internet/phone costs

• Bronze – Reduce utility and internet/phone costs
• Silver – Reduce utility and internet/phone costs by 15%
• Gold – Reduce utility and internet/phone costs by 30%

Last year, my goal was to reduce my utility costs. It was a resounding success with a 1.38% reduction. It’d have been more but I have to keep the apartment heated and cooled for this old lady.

This year, I’m adding the internet and phone costs to the table. I figure if I can reduce my Comcast bill, this can reduce quite a bit so I’m bumping up the reduction for silver and gold. I’ve also been thinking of getting a new phone this year so that might come with a carrier switch as well which would help on that end. However, my phone costs aren’t too bad right now due to a discount I get through my employer.

Goal Three – Cover discretionary expenses with side hustles

• Bronze – Cover one of my expensive discretionary expenses with a side hustle
• Silver – Cover two of my expensive discretionary expenses with a side hustle
• Gold – Cover three of my expensive discretionary expenses with a side hustle

This is a new fun one and a way to get my fun expenses covered with some extra side hustles.

After all, I do have a treat yo’self personal goal this year. It’d be nice to cover those off with some extra cash!

First, let’s define an expensive discretionary expense. This is something that costs $100 or more that I normally wouldn’t buy any given year. That means my expensive high end meals won’t count since I do those all the time any given year.

However, anything that doesn’t happen multiple times a year would count. For example, I recently I spent about $110 on a steam sale and that would count as it was the first time I bought video games in a while. Another good example is a new phone if my current one still works(I’m thinking about upgrading my phone). Clearly some things are easier to cover than others as a phone will be hard to cover off on via a side hustle. However, it doesn’t mean I won’t try.

As far as side hustles goes, what does that entail? For one, anything I covered in the beer money post will work. Another thing I’ll count will be any cash back I get via websites like Rakuten. That’s not really a side hustle but if I can get cash back on my essential expenses when I wouldn’t have in the past then I consider this a success. This will be a good way to either find some fun new side hustles or do a bit extra on some of the things I already do. Amazon Turk is likely candidate for this.

Note that for the purposes of this, side hustles that currently produce some form of passive income won’t count. That means my self-published books that bring in a few bucks each month don’t count unless I publish something new. The blog doesn’t count either if it brings in any profitable income.

Income Goals

Goal One – Increase income

• Bronze – Increase income(2020 vs. 2019) by 2%
• Silver – Increase income by 5%
• Gold – Increase income by 10%

My income grew 7.6% last year. That was because I got a promotion and raise towards the tail end of 2018. That meant the comparison of 2019 versus 2018 compared a full year at that salary to a partial year in 2018.

That won’t be the case this year. I’m expecting my salary to go up by the standard 2% at best if that. I suppose I could be surprised or I could change jobs but I doubt either of those things will happen. It’s also possible I get a bigger bonus this year than I did in 2019(my first bonus in the new role) but that’s certainly not a given. I

However, even if my salary bump is low, there’s always some side hustles I can use to generate extra cash and that ties back to my previous expense goal as well!

Goal Two – Make a profit and donate to charity

• Bronze – Make a profit on the blog and donate it to a charity
• Silver – Make $100 in profit on the blog and donate it to charity
• Gold – Make $200 in profit on the blog and donate it to charity

I failed this one last year but I donated the $200 anyway! I plan to do the same thing this year but it’d be nice if the blog actually made a profit.

To be honest, I didn’t make much of an effort to monetize the blog last year. There were some affiliate links here and there but nothing major. I don’t really plan to change that this year but I am testing out ads on the website to see how that does in terms of income.

I’ve always said this blog isn’t a profit making machine for me but it’d be nice to have some additional income I could donate to charity any given year. That’s the end goal here and it’d be nice if it was at least a free hobby. It was pretty close to that last year and I’m hoping this is the year I see a profit on the blog.

2020 Financial Goals Overview

I had eight goals in 2018, 9 goals in 2019 and now 10 goals in 2020. I’m not sure I’ll keep increasing it every year as ten seems like a nice round number.

It’s nice to actually have a template for goals now. My 2020 financial goals don’t differ that much from the 2019 and that’s good to me. It’s consistent, convenient and allows me to work on something that I’ve worked on before. I’ll add, modify and remove goals here and there through the years but this seems like a good starting point any given year.

These goals are all things I can control and that’s what I like about them.

2019 was by far my most successful year when it came to financial growth and savings. I was able to move past an expensive 2018 and save a boatload of money. I hope to continue that trend into 2020 although I know that some expenses may crop up.

We do hope to purchase a home in 2020 and it’s highly likely that we will. We were very close in 2019 and continue to actively look even through winter to see if something crops up.

House hunting will be expensive for a variety of reasons. We do have a sizable amount saved for a down payment which won’t impact my savings rate but closing costs have to be accounted for in here.

On top of that, our lease doesn’t expire until the end of the year so depending on timing, we might have to pay rent and a mortgage for a bit of time. That wouldn’t be great so hopefully we can find someone to take over our lease quickly.

Still, whatever happens, I’m excited to jump into 2020 and set myself up well for the next ten years. The point of setting these financial goals is to build a better future for myself with more opportunities and choices. Hopefully, I can do just as well as I did in 2019 and achieve great results this year too!

How about you? Have you set your 2020 financial goals yet? If not then hopefully this article gave you some ideas to get started!