Another year of thinking about money….2018 goals!
It’s the start of the year (well, January, just!), I haven’t set New Year’s Resolutions, but I have given some thought to my financial goals for the year. A reminder, too, of why I’m bothering, which is to keep me focused on my wish to:
RETIRE BY 55 – JUST OVER 11 YEARS AWAY!
I’ve broken this down into 4 year periods, for no reason other than that I was inspired by the 2016 Olympics and hoped that comparing my endeavours with those of top athletes might keep me motivated! There are 3 main elements: spend less, save more, earn more.
I want to:
- Find new ways of earning money so that by Tokyo 2020 I’m earning enough from this to cover a third of my expenses
- Save £200,000 by age 55, which I can use until my state pension kicks in at age 67 (not that I’m relying on the state pension).
# 1 – Grow my cat-sitting business
More (convenient, good) clients. My busy period at Xmas showed me that I can’t take on too many clients at any one time, as I need to fit it in around my day job. I’ll be looking for more clients, based as close to home as I can find, ideally nicely spread out over the year so that I can manage the workload – not that it seems to work that neatly in reality!
Six new clients. I don’t like setting these types of goals, but as I managed six in 2017, I’d like at least the same again.
Increase pricing. I’m starting out, and have been happy to dip my toe in the water and see how I like it. I’ve been charging a market rate but, with some experience now under my belt, it’s not very profitable for the work and responsibility involved. I’m no longer prepared to work for the same rate as I have done to date, and I think good clients will be willing to pay a little extra. I’ve just put my prices up, and am going to give myself flexibility to charge more based on the individual circumstances.
# 2 – Find alternative sources of income
Reminding myself that one of my interim goals is to cover a third of my expenses by Tokyo 2020 from sources other than my main employment is a bit of a wake-up call! That’s only 2 years away! I broke down my early retirement goal into more manageable 4-year periods, matching the Olympics, and it’s a good job as I’ve suddenly realised that although I’ll earn some money from cat-sitting, this is unlikely to get me anywhere near that level of income. So, I need to find alternative sources this year. I’ve a couple of things I’d like to try, but have no idea if they’ll generate any income. Definitely something to work on this year, I’ll start reporting back when they’re a bit clearer in my mind, hopefully I’ll have fun trying even if they don’t ultimately work out financially.
The reasoning behind reducing my reliance on my paid employment is that my savings goal is very ambitious, and it’s far too soon to know if I’ll have enough to live on by age 55. Early retirement for me is not about never working again, but about the freedom to work if, how and where I choose. I’ll feel more confident about making the leap from paid employment if I’ve proved my ability to earn money for myself in other ways, and if I have other income streams up and running, so much the better.
# 3 – Continue with my pension saving
I’m not going to increase the contributions into my work pension this year, but am definitely continuing with current levels, and will pay in my bonus. It will be interesting to see results at the end of the year, especially if the stock market reaches its peak mid-year. This is not really an activity for the year, as it’s automated, but it’s a key part of my savings goal.
# 4 – Increase equity ISA savings
This is where I’ll be focusing my attention for the next few years. I only opened the ISA in the last 2 years, and have only recently started regularly savings, up until that point having just invested a couple of lump sums. From now, if I can afford to save more each month, this is where it will go. Any profit from cat-sitting will end up here. Current pension rules allow me to take my money at 55, but I don’t trust that the rules won’t change. I may also wish to keep my pension money invested. ISAs allow me to withdraw my money at any point so give me complete freedom, and I feel happier with my eggs in more than one basket.
# 5 – Continue with my First Direct regular saver
I love this account. It pays 5% on monthly savings of up to £300. So long as you don’t touch the money during the year (you always have access to the cash, you just won’t get the 5% if you dip in), you’ll get a lump sum of up to £3,600 + 5% for your efforts. Who doesn’t have something they need to spend the money on at the end of a year (see # 6 below…)? I want to prioritise retirement saving, but there are plenty of other expenses between now and then. I’ve banked with them for years, they have great customer service, and it’s about the best rate on the market for regular savings.
# 6 – New kitchen. Possibly new roof.
OK, this is spending more. However, I rest my case for the need for regular cash savings, made in # 5 above! We tackled the first of our big household renovations last year, with our new windows. We’re starting this year by tackling the second, a new kitchen. We’re part-way through the design and quotes, and hopefully in the next couple of months it will be underway. I’ll then have a better idea of whether I want to spend money on a third big expense, the roof…..
# 7 – Switch energy provider
My switch last year didn’t work out that well, I’m sure I’m paying too much so will look into this again. Yawn….
# 8 – Shop around for large household insurances
Home and car insurance are my big ones. Boring, but I’m listing it as it reminds me it’s a key part of spending less.
# 9 – Get rid of more stuff
I’m craving less and my stuff is on the hit-list! When there’s a lot to get rid of, it can be overwhelming to know where to start. Many items – high street clothes, books etc. – I’ve found don’t make much online. It’s also time-consuming and tedious to sell individual items one by one. So I have a growing pile waiting for some sun and a car-boot sale, and anything not sold will go to a charity shop.
# 10 – Write!
This doesn’t fall into any category other than ‘fun’! Partly it’s this blog, I have ideas to re-vamp it. Partly it’s writing elsewhere, fiction, where I’m constrained by nothing but time and imagination (oh dear, I’m doomed…!). Who knows where it might lead?!
So, there we have my 2018 financial goals, with the most work to be done on # 2 and # 10! I’m not quite sure at present how this will pan out, but am looking forward to giving it a go! If you feel inclined to share your goals I’d be keen to hear about them, I’m wishing you lots of success!