Six month financial goals
I’ve always hesitated to create financial goals because of the inevitable disappointment I would face when I looked back months later and realized that none of them came to fruition. But one of my biggest objectives for Daleel is creating accountability for myself and sharing the results of that accountability in the hopes that I can provide support for other Muslims on their financial journeys.
With that said, in an effort to be less critical of myself I’m going into this with an optimistic but realistic mindset. I’m confident in my ability to reach some of the goals in my list, but I’m considering other goals as stretch goals that I’ll accomplish if I’m able to. Coming face-to-face with our finances can be extremely vulnerable. We have to look back on past decisions with a more critical eye and create a game plan for addressing poor monetary patterns at the source. But the positive habits that are built and the financial, emotional, and even religious benefits we gain from them will make it well worth it.
Goal #1 - Max out Roth IRA
I currently invest in two retirement accounts. One is my employer sponsored 401k where I have limited control over what I invest in and the other is a Roth IRA account. This is an individual retirement account that allows me to contribute a certain amount of money per year in any stocks or funds as long as I’m within the income limit established by the IRS. For 2023, the IRS has established that investors within the income limit of $138,000 per year (if filing as single) can invest up to $6500 in a Roth IRA account. For the 2023 tax year, I’ve only invested $500 in my Roth IRA account. My goal is to contribute the remaining $6000 before tax season - April of 2024.
Goal #2 - Make an additional mortgage payment
The primary reason I’m behind on many of my investment goals is…my mortgage! Although homeownership is an exciting milestone, it requires a heavy upfront cost and the interest rate of 5.875% that I pay on my home loan makes my monthly payment pretty hefty. I’m currently paying $2666 per month for my mortgage alone. I currently have a 30 year conventional loan. I can pay off the loan early at any time and I intend to do so to avoid paying additional interest inshaAllah. One of the easiest tricks to shortening the length of the loan is to pay just one extra mortgage payment per year. This can take off four to five years from the loan and in some estimates, it can shave off as much as seven years.
Goal #3 - Purchase company shares
I work at a startup and the way stock options work through startups can be a little complicated. Startups incentivize employees to work there longer by offering them stock options available for purchase over a period of time. I currently own 5000 shares and as of today, 1458 shares are available for me to purchase. I plan to invest in the additional options that have vested (shares I now have the right to own) within the next six months. This is one of my primary, easier to achieve goals.
Goal #4 - Create a budget
This is a goal that I’m considering a non-negotiable. I know that I’m spending excessively in certain areas. To mitigate that pain and learn more about my spending habits/areas for improvement, I need to create and maintain a budget. This is one of the more difficult but necessary parts of financial health because it requires a significant amount of course correction. One of my largest struggles in budgeting has been finding the right routine for me. I want to automate as much as possible while still having access to and control over my spending. There are so many different budgeting methodologies and tools on the market, but it’s important for me to make an educated and personalized decision that works well with my financial state and philosophies.
This is my first time writing out a set list of financial goals and giving myself a deadline. I’ve created reminders for myself to do a three month check-in at the halfway point, and another review at six months to see how many of my goals I’ve accomplished.