We’ve all got goals, right? Well I’m no different, I have tons of money goals! Some are reasonable, and some are admittedly pretty far out there. But hey, life is for living right? And it takes money to do most of the things we want to do right? So, I need to set some pretty crazy money goals to get where I want to be.
All My Bank Accounts
I wrote an article in the long ago about the many bank accounts that I own. What I didn’t mention was my money goals for each account, and how I arrived at that number. Well now it’s time to dive into that!
Short term Emergencies
My target for my short-term emergencies account is 6K. I know this is a weird number, 5k seems like it’s more rounded, doesn’t it? I agree, but I chose 6k as my goal because I always want to have at least 5K in the account. I’m sure that doesn’t make any sense to you, but in my head if most emergencies cost between $500 and $1000, and my fully funded account has $6000, I’ll never go under $5000! I know, I’m an oddball, but it works for me.
The good news is that I was able to fully fund my short-term emergency account as of September! One down, way too many to go!
Long Term Emergency
My long-term emergency account is supposed to get me through a period of unemployment. My goal is to have one full year of essential living expenses saved up to get me through something like that. To figure out how much money I would need, I added up all of my monthly expenses and multiplied it by 12.
My yearly life costs almost 35K! The biggest expense is of course housing, followed by food & gas and then utilities. I’m sure I’d be able to cut back on some of those things if I was unemployed, but my estimates are based on what I’m paying now. I have to way of knowing what I’d spend on gas and utilities if I wasn’t at work full time.
Currently, I’m not even close to being fully funded in my long -term emergencies account. I have about four months of living expenses saved up (yay, 1/3 of the way there!).
With my short-term emergency account fully funded, I started putting most of the money that was going there each paycheck into this account instead. That will definitely help me reach my goal faster! I like to call this the savings snowball method.
One of my most extraordinary money goals is my FIRE goals account. My goal for this account is a whopping $150K. That’s insane, even by my standards! I know it’s not advisable to have so much money sitting in a savings account doing a whole lot of nothing, but trust me, there’s a method to this madness!
First, I’m not even close to my goal, so that’s kind of a moot point. Second, the money isn’t doing nothing. I have a savings account that pays a decent interest rate, considering interest rates on savings nationwide still aren’t very high. It’s better than nothing though.
I’m sure you are all dying of suspense, why do I want to have 150K in cash for my FIRE goals?
If you read my post on my FIRE goals, you know that I want to travel. A big portion of that is traveling through the US, work camping my way through the national parks. Any guess on what big ticket item is needed for an adventure like that? That’s right, an RV! I don’t want anything big or fancy, but a decent (used) RV is going to set me back about 50K, if not more. Yes, I have found some for between 20 and 30k, but they are rough looking, and with inflation going the way it is, I’d rather overestimate than underestimate.
I also want to travel to China for Tai Chi, and India for yoga. These trips won’t be cheap either. I’m going to try to do them consecutively so as to only pay for one trans Pacific flight, but these two activities will still cost me about 15K total.
Another big expense is going back school. I want to study anthropology and go to archaeology field school. Obviously, I’m going to be as frugal as I can about this, but education isn’t cheap. I’ve done some math, and this is probably going to cost me about 30K.
I also need to have at least one year of living expenses saved up before I embark upon these crazy adventures. I know, I know, I’m going to have that in my long-term emergency account, why do I need it again?? The answer is that if I’m being super conservative. If I’m going to quit my job for all this crazy nonsense, I want some cash reserves on hand in case something goes wrong.
I also want to be sure to have some extra cash on hand for when the market crashes again. Having 10K available to throw into an index fund when the market crashes will put me in an awesome position during the following bull run.
I’m sure if you were following along, you’d notice that after these three things, I’m still 20K shy of my 150K goal. I rounded up to 150 because like I said before, I want to be super conservative with my cash holdings, just in case something goes wrong. It’s better to be safe and ready for an emergency than to be sorry.
Travel Before FIRE
My money goal for my travel account is 5K. Unfortunately, I haven’t been able to achieve that because I take too many trips. But really, that’s what this account is for. I’m putting money aside to help pay for all my crazy trips.
Next Big Purchase
I don’t have a goal for this account because I don’t know what that next big purchase is going to be. It could be as cheap as a water heater, but it could be as expensive as a wedding. I make sure that I add a bit of cash to it every paycheck so that I’m prepared for anything that I need to buy.
Outside of my savings account, my other big money goal is to pay off my debt. I somehow managed to charge $6400 on my credit card in the last year, and now I have to pay that off.
I know, a lot of PF people will advise that I use my substantial savings to pay off the credit card. But I don’t want to do that. I know I’m paying more in interest on the card than I’m making with my bank accounts, but it feels good to have money in the bank, and I don’t want to lose that.
My credit card payment is my top priority. My goal is to get it paid off in the next six months, and I’m going to budget and scrimp and save to get there rather than take away from my future goals.
Like I said in my first post about my bank accounts, I’m old school and I like tracking all my craziness by hand. If you are looking for an awesome modern tool to track yours, check out Personal Capital!
What are your money goals?
What are you saving for? We’d love to hear about your top money goals in the comments!
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.