Although I’ve privately noted my 2010 financial goals in detail, I’d like to share some of them here. The main reason I’m doing this is for accountability, but I wouldn’t be surprised if readers wondered about my finances from time to time. After all, everyone has their own financial problems, challenges, and aspirations. As usual, I won’t be giving out actual numbers here for privacy reasons.

Without further ado, here are my financial goals for 2010:

Emergency Fund. In yesterday’s update I talked about how all I have left is a 4-month emergency fund because of the many financial emergencies I experienced last year. My goal for 2010 is to save up for a 7-month emergency fund (meaning have 7 months’ worth of living expenses tucked away). My “big” goal is to get it up to a year’s worth, but it’s not as necessary anymore since I’ll have less dependents this year.

Retirement Fund. Basically add PXX,XXX to it over this year. After that, I’ll be making an effort to move it to investment vehicles with better returns.

Insurance. I need medical insurance, so does my partner. This year I’ll make sure that we both have it so we can minimize medical expenses.

Legal paperwork. I need to finalize my last will and testament, as well as a power of attorney for my partner. This may sound morbid, but anyone with assets should do this, no matter how young you are. This is especially true if you want your assets to go to other people apart from the default legal choice (your children, spouse, or parents).

Launch graphic design studio. I’ve been planning and organizing a graphic design/illustration studio with some friends for almost two years now and it’s time to jumpstart it from months of stagnation.

Improve returns from passive income stream. This basically means to spend a few hours for testing and research. Doesn’t sound exactly passive, I know, but if it means better returns then hopefully it’ll be worth it.

If time and opportunity permits it, launch another passive income stream. Not a must-do, but if I find the time and don’t have other unexpected projects, I’d love to do this. I have a few options right now but I’ll need more information/research.

Looking at these goals, I see a unifying theme: I’m laying the foundations. It looks like I’ll be spending this year ensuring stability for me and my family. I’m putting safety nets in place (bigger emergency fund, retirement fund,legal paperwork) while setting up systems that will allow me to protect myself and earn more income (insurance, additional income streams).

How about you, what are your financial goals for 2010? How do you hope to achieve them?

Image by ilco from sxc.hu

At the start of 2009, I wrote a post describing my financial goals for the year. I know that’s I’m already a few days late, but I’d like to take this opportunity to review whether I’ve accomplished those goals.

1) My Income Goal

I didn’t disclose the figure, but I wasn’t able to meet my income goal consistently. I earned more in 2009 if I compare it with the previous year, so it’s not necessarily a bad thing. Also, it’s been taking me much longer to launch my other income streams, so it’s taking a while for my additional income to make a difference.

2) Emergency Fund

My goal for my emergency fund was to save up for 1 year’s worth of living expenses. Sadly, I wasn’t able to reach this goal. So many emergencies happened this year – someone close to me needed an operation, I got sick a few times, etc. Even with my discipline to save and my existing emergency fund, I couldn’t really keep up with those emergency expenses. I still have 4 months worth of an emergency fund, but that’s less than what I started with in 2009.

3) Retirement fund.

In my post last year, this is what I said:

My retirement fund is doing okay, but every year I have a goal of how much I should set aside for retirement.  Note that my definition of retirement is the time when I am no longer physically or mentally able to work.  I love my work, and I want to do it for as long as I can.  Also, since I don’t have a corporate job, my definition of retirement is different from the traditional definition.

With that in mind, I shifted the bulk of my retirement savings for my house savings (to build that farm house in the province). I still have money for retirement tucked away, and I plan to add more to it this year.

4) Provincial House

I’m on track with this goal. This is the goal that is not allowed to die.

5) Will

I did prepare a will, but I did not have it notarized yet. My partner and I will be speaking with a lawyer to see our options and alternatives to see what we can do to protect our relationship legally and financially.

6) Donations

I was able to donate more money this year, especially during Ondoy. This also extended to donations in kind, not just cash.

7) Passive Income Stream

I established an online passive income stream mid 2009, but my income from it is minimal for now. In the coming year I hope to make improvements to it so that I can earn more.

Summary: 2009 was a mixed bag for me financially, but it was mostly positive. There’s still a lot of room for improvement, and tomorrow I’ll be posting about my financial goals for 2010.

How about you? Were you able to reach your 2009 financial goals?

It’s the start of a new year again, and it’s time for planning one’s finances for the rest of the year.  I spent the past few weeks working on my financial goals for 2009, so that I can increase my chances of being financially stable in 2009.

I find that it’s important to make your goals as specific as possible.  For example, “save more money” is a bit vague.   How much will you save and what are you saving it for?  Also, write down the actions you need to take for each goal. If you intend to make more money, how will you do that?  What are the steps you need to take to make it happen?

I encourage you to do the same thing.  Let’s make this year a year of better financial responsibility.  List your financial goals on your blog, and send me a link to your post (either through the contact form or the comments section of this post).  At the end of the month, I’ll compile all your links and share them to other Frugal Pinoy readers.

Note: For privacy, I won’t be including actual figures here, just percentages and placeholders.

My financial goals for 2009

Earn at least P xx,xxx per month.  I’ve raised this by 63% from my previous goal last 2008.  This is my most important goal, because without it, I won’t be as successful with my other goals.  Here’s how I plan to accomplish this goal:

• Be consistent with my work output.  At least 13 articles per month for one client,
• Explore other moneymaking opportunities.  This includes a passive income stream (more about this later), applying to travel writing gigs, launching my illustration studio, and earning more from my web content service.
• Put my money in accounts with better returns.  This means I’ll look into special deposit accounts, time deposits with higher interest rates, and maybe even other investments.

Finish saving up for my 1-year emergency fund.  Right now, I only have the money for a 6-month emergency fund.  I’d like the security of knowing that I can pay for my current lifestyle even if I don’t earn anything for a year.  This is especially important since I have dependents.  Based on my calculations,I’ll finish saving up for my emergency fund by September.

Reach a certain amount of savings for my retirement fund.  My retirement fund is doing okay, but every year I have a goal of how much I should set aside for retirement.  Note that my definition of retirement is the time when I am no longer physically or mentally able to work.  I love my work, and I want to do it for as long as I can.  Also, since I don’t have a corporate job, my definition of retirement is different from the traditional definition.

Save up at least P xxx,xxx for Pangasinan house.  I’ve already mentioned before that one of my goals is  to build a house in a farm in Pangasinan by 2011.  To do that, I need to save a certain amount of money this year.

Prepare a will and have it notarized.  Remember Heath Ledger?  When he died, he did not update his will, so there was nothing in it about his daughter and his ex-wife.  I want to make sure that my partner gets the bulk of my savings and personal effects, and the only way to do that legally is through a will.  I’ve seen many Filipino families get torn apart just because people didn’t agree about who was entitled to what.  Something as legally binding as a will prevents these unnecessary arguments.

Here’s a sample of a will that is valid in the Philippines.  Feel free to browse that site as it also has templates of other legal documents, such as deeds of sale and special power of attorney.

Donate more money to causes I support.  I already donate to an animal shelter, but I want to donate to PAWS, Haribon, and maybe an educational NGO.  I welcome suggestions here.  If you also plan on donating to causes in 2009, click here for a list of organizations you can donate to.

Establish a passive income stream.  To ensure that I have an income even if don’t have any clients, I need to establish an income stream that requires little input and maintenance.  I’m thinking of working on an ebook (for an international audience) or online mentorship (for Filipinos).  I haven’t fleshed out this idea yet, but I’ve scheduled the planning stages in my calendar.

I’ll be updating you on my goals each month, to show you whether I’m on track or not.  That’s the point of blogging about your goals – so that there’s public accountability. If you’re writing a list of goals that only you can see, it’s very easy to remove some items or throw the list away altogether.

Now, it’s your turn.  How about you?  What are your financial goals for the year ahead?

I have the following financial goals for this year:

• Goal 1: Have 1 year’s worth of basic living expenses in my emergency fund.
• Goal 2: Put away a certain amount for my retirement savings.
• Goal 3: Earn no less than Pxx,000 each month.

For security reasons, I won’t be putting many actual figures on this blog, just percentages.  However, to keep track of my goals, I’ll be posting my progress here.

Goal 1: Emergency Fund 

Progress:

Notes:  So far, I’ve saved 45% of my target amount – which is roughly 4-5 months worth of living expenses.  There’s no average amount I put in every month, but I always try to set aside P3,000.  When I reach 100% of this goal, it’s likely that I’ll stop putting money into my emergency fund.  I’ll just add to it again when I’ve used it for unexpected financial emergencies.

Goal 2: Retirement Savings

Progress:

Notes:  I’ve saved 53% of my target amount for this year.  Unlike my emergency fund, I’ll be adding to my retirement savings continually, as long as I have an income.  I know I’m only 24 years old, but it’s never too early to save up for retirement.  Compound interest is my friend.

My definition of retirement is when I’m no longer physically or mentally able to work.  I plan on working as long as I can, because I really, really love being a freelance writer.

Since I’m still young, I can put part of my retirement fund in riskier investments (currently in a Time Deposit).  When I get to my 100% goal for the year, I’ll invest 50% of my retirement savings and set aside the remaining 50% in a high-interest, long term TD.  Any recommendations are welcome.

Goal 3: Income

Progress:

Notes:  My income should never fall lower than the red line.  Numbers 1 to 12 on the X-axis represent the months.  As you can see, I was very unfortunate last February.  Judging from the height of my March income, I guess the lack of income last Feb had something to do with payments getting to me later than usual.  Since March, I’ve been doing well, and with my new jobs I’ll be able to earn more.

This image is from my personal financial spreadsheet.  I have my partner to thank for that.  She organized my yearly finances in a neat Excel file so that each peso that comes in and each peso that goes out is all accounted for.

I’m glad that so far, all my financial goals have been on track, except for my income last Feb.

Do you keep track of your financial goals?  How?