2015 Financial Goals

I love this time of the year.  Setting goals for the coming year is exciting.  Everything is a blank canvas and the year always has so much potential ahead.

Last year I tracked every single dollar I spent and allocated all of that cash to achieving goals which I set out at the start of the year.  My ability to do this going forward is limited by the fact that I now share finances with my fiancee (although we are not fully integrated yet).  Given how tedious tracking every dollar is I'm not going to ask her to do this and so I'm going to have to settle for a way of tracking my goals which is less hands on than last year.

 But before we get to the 'how'...I'm going to outline my savings and spending goals for the coming year.

My financial goals for 2015

I set my financial goals this year with my fiancee.  This was the first year that I had to do it with someone else and I had to reign in what I wanted to achieve in order for us to accommodate both of our goals.

The goals listed below are joint goals.  I tried separating these out but it really was far too complicated and I couldn't work out how to track them separately either.

Goal #1: Get Married.  Required savings: $5,000

My fiancee and I decided to have a shorter engagement rather than a longer one.  Neither of us really wanted a long and drawn out engagement.  This was for a variety of personal factors including life plans and age and also neither of us want to drag out the wedding planning phase for too long.

I have outlined my wedding savings plan before.  We have budgeted $40,000 for the wedding itself.  Some serious saving done through 2014 means we only have $5,000 left to save for the wedding.

Goal #2: Go on a grand tour of Europe for our honeymoon.  Required savings: $20,000

The best part about planning a wedding is definitely the honeymoon.  I love travelling and I really wanted to travel through Europe before I had to settle down with children.  When I budgeted for my wedding in 2014 I was also budgeting for my honeymoon so although it looks like I haven't saved anything it's because it has all been allocated to the wedding (which comes first)

Goal #3: Save for a home deposit.  Required savings: $40,000

Ok - for all those who were worried that I had suddenly changed into a person who had totally given up saving and investing don't worry - I haven't.  Saving for a home deposit is something that I've been doing for years.  I haven't explicitly said that is what I was doing but every time I put money in my investment property's home loan offset account it was to form a deposit for my own home when it came time to buy it.

Big non-deductible housing loans are not my cup of tea and my fiancee wants to eventually be a stay at home mum so I figure that we can borrow about $400,000 comfortably (and still allow me to keep my investment portfolio intact).  We are budgeting for a house to cost us ~$650,000 which means we probably need $250,000 - $300,000 saved up in cash (more is required due to stamp duty and other purchase costs).

Given the amount already in my offset account this means we probably need another ~$130,000 - $180,000.  Given we will be a two income household for the next 2 years I think we can comfortably save this amount in that time.

For 2015 I am targeting $40,000 in savings for the home deposit. 

Goal #4: Build up an emergency fund.  Required savings: $10,000

I have been slowly building up an emergency fund over a few years.  There hasn't been a particular plan for this.  Whenever I had a bit of excess at the end of the month it would go into my emergency fund.  At the end of 2 years of this ad-hoc approach I have a grand total of $800 in my emergency fund.

Emergency funds are important and I've been meaning to build one for a while.  They help you cover months where unexpected things can and do happen.  I want to get this fund built before I take on another home loan and I have zero excess cash to play with.

Goal #5: Get my share portfolio moving again.  Increase portfolio valuation by 15%

At the end of 2014 my share portfolio was worth $240,000.  I'm targeting to increase this by 15% over the year to $276,000.  I plan on doing this in a few ways:

1. Save $15,000 from my wage and employee share plan
2. Become more active with my share portfolio to generate greater returns

Note that I would never target 15% returns from my share portfolio on it's own.  That requires a risk profile that I'm not comfortable with.  When setting your returns target for your share portfolio always remember that the share market itself only averages mid to high single digit returns over the long run.  Anything above this and you're taking additional risk.

I'm going to track these goals instead of every dollar I spend

As I mentioned at the top of the article, as I am now sharing my finances with my partner I cannot track every dollar we spend together - it is just too hard (and if I'm going to be honest it was a bit of a pain to do so last year).  Instead every month I'm going to track my performance against these five goals to keep myself on track.

Have you set your goals for 2015?  I would love to hear about some of them.

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2014 Financial Goals

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My updated wedding savings plan

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