2022 Goals – January Review

For 2022, I have set some goals that I’ve spelled out previously in this post. To help achieve them, I’ve decided to write a monthly check up to help keep me accountable. For a refresher, these are the 5 specific things I am doing in 2022:

1. Be more intentional
2. Write more
3. Max out our Roth IRAs
4. Research other means of income
5. Compartmentalize for long term goals

Starting off 2022 right – I’ll take all the snow

Aside from keeping myself accountable, I am also writing to try and inspire others in the skilled trades to do the same. For years now, I have consistently said not to let retirement happen to you; rather, be intentional about saving and investing. Far too many of my brothers and sisters are unintentional about a lot of things – including retirement. And, one of the main reasons I began this website in the first place was to outline the various ways those in the trades can save for retirement. To that end, this year will see me navigate through a few targeted funds/accounts, how I am approaching it all, what I save per month, and the hope is that it will inspire others to do the same. Without further ado, let’s dive right in.

Well, writing about my specific goals is being more intentional and certainly allows for more writing. All things considered, I will be writing about the monthly progress on maxing out our Roth IRAs, and periodically detailing numbers 4 & 5. So, how are we doing?

*Caveat: You should be intentional with just about everything you do. If there was one thing I recommend you work on this year, it’s The Art of Intentionality. Get better at this and you will get better at a lot more.*

2022 Goals – January Roth IRA

I took the time to lay out what it would look like for me to max out our Roth IRAs.

$12,000/52 = $230.76 per week – $115.38 for each IRA. For the month of January, there were 4 weeks and that meant 4 contributions.

January 7: $115.38 x 2 = $230.76

January 14: $115.38 = $230.76

January 21: $115.38 = $230.76

January 28: $115.38 = $230.76

For the month of January, we contributed a total of $923.04 – and we are on target!

 

There is one caveat though: All of January’s contributions are for the 2021 year. So long as you have not met your contribution limit, the IRS allows you to contribute to the previous calendar year until April 15 – or the tax deadline. Given I didn’t meet the contribution limit for 2021, everything I deposit will be to 2021.

The benefits for this are clear: It allows me to contribute more than the $12,000 limit in a year. Plus, it helps me to shore up last year’s contribution while keeping my goal. What’s more, should I be able to invest even more, I have the added time to meet not just my own personal goals but also the contribution limits for both years. Winning!

Of course, the ultimate goal is to get caught up totally, so that at the beginning of a year I am contributing to only that year. I have been intentional about taking the time and contributing every week, documenting it, and it makes me feel as though I am accomplishing a goal. Couple that with increased retirement savings and we are winning.

2022 Goals – Researching other means of income

I have been looking online at various revenue sources but this first month has been a bust. There are so many different websites out there offering earned revenue it’ll make your head spin. What’s more, many websites only tell you about the revenue stream and not necessarily how to get into it.

For my part, I still think donating plasma is a tremendous opportunity but alas, they have a 4 month waiting policy after you get a tattoo. I’ve been a regular visitor in the past year and a half that I’m currently unqualified – and likely will remain so for some time to come.

So, back to square one. At some point I’m destined to find something; I’m of the mindset that in this area tenacity and intentionality will result in effects at some point. May the search continue!

2022 Goals – Compartmentalize for long term goals

This one is a bit expansive – I mean, what is a long term goal? In reality, it could be anything, so to narrow it down, I’ll list the things I have in mind here:

1. Build up my emergency/opportunity fund more
2. Build up another savings fund
3. Build up another investment account
4. Build up custodial accounts for each of my kids (UGMA/UTMA & Roth IRA)

I know – it seems like a lot but I assure you it’s not. Let’s unpack this from the beginning and see if I can’t explain it all.

Build up my emergency/opportunity fund

We have an account through Betterment and it is actually called out emergency/opportunity fund. Two things right out the gate: We have a decent amount in it already and I really only view it as a 2nd emergency fund. We have another, larger account at another state that nets us 1.75% interest and I have always considered it the bulk of our emergency funds. One of the main reasons we have the one at Betterment is because it is easier to access. Oh, and the money is invested.

Still, I like to play it a bit safe and think an increase in both emergency funds would provide extra margin. As of the end of January, I have yet to really contribute to either account – BUT I will soon. I’ve been busy with the others on this list this month.

Build up another savings fund

I have a checking and savings account from a credit union that I have allocated funds for. I have some I plan on depositing in there likely the first of February. As of right now, I am viewing this account as a “opportunity” account and, if I’m honest here, I have in mind right now of traveling. I have always wanted to visit the Nordic countries and a trip like that takes denaro. What’s more, a trip like this is probably a few years in the future, so I have time to try and grow that nest egg.

I’ve heard pictures don’t do it justice – hopefully one day I’ll be able to make the comparison

And yes, I realize I could combine accounts and just make things simpler to some but as the title suggests, I really like to compartmentalize.

Build up another investment account

A mighty oak tree starts….as an acorn

Ok, so I have our Roth IRAs through Betterment as well as a taxable investment account but I have always been intrigued by the Acorns investment platform. How does it work? Easy: they round up your purchases and when you accumulate $5.00, they invest it. They estimate the average monthly investment is somewhere to the tune of $30.00 – not too shabby for unintentional investing.

I’d seen it around for a while now and really liked the concept. Plus, I was intentional about signing up for the service. Why? Because I want to save as much as possible – and I really like the round up feature. So, to that end, I opened an account, deposited some start up coin, set up recurring deposits weekly, and enabled their roundup feature.

Their round up feature, at least to me, is a super easy way to invest and their flat rate fee as opposed to a percentage is nice, too. Obviously, smaller accounts pay a larger portion than larger accounts with a flat rate, but as far as I’m concerned, that is just more incentive to save even more. It resonated with me: my annuity account through work is also managed using a low flat rate and I’m a fan of simplicity. It’s one of the reasons I have Roth IRAs, after all.

Currently, via my automatic deposits, I should deposit $5.00 a week for 49 weeks = $245. That isn’t much, BUT it’s just what is automatically deposited. IF Acorns is right on monthly round up estimates, then $30 * 12 = $360. That’s $605 total which, to me, still isn’t a lot but from intentional unintentionality (yea, I coined that) then it is. What’s more, IF someone were to read this, get an idea of how they could start investing in a small way – this is one simple set up.

Again, I am a BIG fan of simplicity and their round up feature is ingenious. There are A LOT of those in the skilled trades who could easily sign up for this. Click here to do just that.

Build up custodial accounts for each of my kids (UGMA/UTMA & Roth IRA)

Even mini snowman is open arms when it comes to custodial accounts

Now we come to the last thing I have been busy with this month: Custodial accounts. Again, this falls within the realm of compartmentalizing for long term goals – and one of those goals for me is to set up my kids for financial literacy. Of course, that involves teaching them at an early age the ramifications of money but also includes debt, savings, and the miracle of compound interest.

In the meantime, I set up UGMA/UTMA accounts for each kid as well as Roth IRAs.

UGMA/UTMA accounts stand for Uniform Gifts to Minors Act/Uniform Transfer to Minors Act. Nerdwallet has a pretty good synopsis should you want more info and I will likely write a separate post about this specific type of account; for the purposes of this post, though, I’m not going into a lot of detail. There are, however, a couple of particulars worth noting here:

The first $1,100 is TAX FREE and, according to Fidelity, “There’s no limit to the amount you can put into an UGMA/UTMA. But gifts to an individual above $15,000 a year typically require a form to be completed for the IRS.”

I’m well aware that many of us in the skilled trades do not have unlimited pockets – nor are we able to save thousands of dollars in custodial accounts for our kids. HOWEVER, I do think we can set a few dollars their way and so long as you don’t reach the $1100 limit, it’s TAX FREE.

I created custodial UGMA/UTMA accounts through Acorns because it was a feature I could add and I had created an account myself. Currently, I have $5.00 scheduled to be deposited on a weekly basis. Again, not a lot, but it is something starting out. You eat that elephant one bite at a time, after all.

The last custodial accounts I signed up were Roth IRAs through Charles Schwab. Just like the UGMA/UTMA accounts, I have plans to deposit $5.00 weekly for each kid – with the caveat it is chore money around the house. I have a spreadsheet I update too – I don’t want/need any nasty surprises from audits and unkept records. When I make a deposit, I note the amount, date, and reason for it. That way, I can substantiate activity whenever.

Tying it all together

“Comparison is the thief of joy” – whoever said it deserves kudos because it’s true. Likewise, I have given up the idea of comparing our family financial standing with others. Some people don’t have a pot to piss in – others have millions. Each family is unique, their savings habits are unique, and it’s the same for us. To me, if my kids reach adulthood with a sense of financial literacy and responsibility, as well as several thousand in a custodial account and the same in Roth IRAs, then I feel we have done them a great service in preparing them for adulthood. Compound interest needs time, after all, to work it’s magic.

2022 Goals – January scorecard

So there you have it: January 2022 is a nutshell. IF you are in the skilled trades and you haven’t begun to save for retirement, a rainy day, or emergencies/opportunities, there is no time like the present to do so. After all, no one else is going to save for you. You have to be intentional about what you do. And there is no reason (except maybe extenuating health issues that eat away at your check) to not save AT LEAST in a IRA.

So, grading myself, I’d say we are starting off 2022 right. Grade: A

What are your thoughts? How do you save – and what are your goals? Whatever they are, get after them!