So there has been this post from GenYWealth that has been making the rounds recently, and since everyone is measuring their life against it, I thought I’d jump on the bandwagon.
GenY Wealth’s 20 Financial Milestones You Want to Reach in Your 20s
# 1 – Finance a dream vacation…in cash
Kind of? Our trip to France for our honeymoon was definitely amazing, and we’re planning a trip to Ireland when Chad and my sister graduate from their Masters and PhD programs, which should take place just before we turn 30.
# 2 – Pay off your student loans
I definitely have the cash to pay off my $12,000 in student loans, but for some reason, those loans just don’t bother me. I have over 2 years until I’ve officially failed, though, and I’ll probably pay the balance off once we lose out on the interest deduction.
# 3 – Automate paying your credit card bill in full
It’s not automatic, but that’s crazy talk! I always review my bill thoroughly and make sure that the charges are from places I’ve actually been to and for the amounts I’ve actually spent. I’ve been double-charged, I’ve been charged wrong amounts, and sometimes I’ll make a return and can wait to pay the bill until the credit shows up. I don’t and will never accomplish this goal.
# 4 – Get rid of all bad debt
Besides the student loans, we have no debt. So, good job, us!
# 5 – Build an adequate emergency fund
Our savings are sort of all lumped together right now, so we have a very healthy emergency fund! Our other savings are extremely long-term goals (e.g. a house, which is probably a few more years away), and we could definitely that money if there was an emergency.
# 6 – Make your first, and last, investment mistake
Does this count?
# 7 – Develop a statement of cash flows
I’m going to assume that my detailed and slightly anal Excel spreadsheets fulfill this goal.
# 8 & 9 Max out a Roth & Contribute to your 401(k)
I’ve maxed out my 401K the last two years and my Roth IRA since 2007. This has made sense for me so far.
# 10 – Get a degree or certification that increases your earning power
I got a Master’s degree and promptly got a 13% raise. Win for me!
# 11 – Take a career risk
I don’t know if I’ve really taken a risk. Certainly I challenged myself by taking on a job that I might not have been good at, but it would have been a lot braver for me to stay at my job in California and try to make something out of a job that I hated.
# 12 – Negotiate something
Haven’t done this. Negotiating makes me feel queasy.
# 13 – Earn your first side grand
I earned $8,000 in overtime this year, does that count?
# 14 – Start a sub-savings account for an upcoming financial goal
I tried the targeted savings accounts last year, but it was too annoying to keep track of! I have a general idea of the amounts we have saved for certain things, but it’s all sitting together in one account.
# 15 – Set a target retirement date
If we save at our current rate, we’ll reach $1M by the time we’re 36. That sounds good to me!
In all honesty, I have no idea when I’ll want to retire. I’ve always thought about early retirement, or semi-retiring and becoming a teacher, but I really like my job and I really like what I’m doing. Will I still feel this way in 10 years? Maybe not, but arbitrarily deciding a retirement date based on nothing seems a little silly, even if I’m not going to be held to that date. My goal at this point is to save enough money so that money issues aren’t the thing holding me back.
# 16 – Monitor your credit
I check my credit report semi-regularly and use CreditKarma to check my score, but that’s about it. We’re still a few years from buying a house, and we have enough cash to cover pretty much anything else we’d want to buy, so I’m not very concerned with our credit status.
# 17 – Say no to a financial salesman
I don’t have enough money for a financial salesman to come after me. Is this a thing that happens to real people?
# 18 – Give just enough to make it hurt
One of my big regrets for 2010 is that I donated the most piddling amount ever to charity. I’m hoping to make this a priority in 2011!
2 Milestones for the Over Achiever
# 19 – Invest $1 for every $1 you spend
If you don’t count taxes, I’ve done this the past three years. Even counting taxes, we’re saving about 40% of our gross income. I think that’s pretty OK, and I think things will only get better once Chad graduates and works a proper full-time job again.
# 20 – Start a 529 College Savings Plan
I idly tossed the idea around when Chad was going back to school, but since he got a scholarship, it sort of fell by the wayside. I’m not sure it makes much sense as a “maybe” account, though. The tax deduction isn’t all that great, and we’d have to be pretty firmly set on having kids in order for it to be really worthwhile. So… maybe we’ll work on it.
I think one of the main things I learned from evaluating myself and reading others’ posts is that no one checklist is right for everyone. I’d like the original post a lot better if it had been written as “20 Financial Milestones I’d Like to Reach in My 20s.” Some of these goals seem stupid to me (seriously, if you’ve automated paying your credit card, I hope you’re at least reviewing the statements!), some of them seem reasonably worthwhile but aren’t important to me, some seem like they come from a place of privilege (maxing out a Roth and a 401K is $21,000 dollars. Even coming up with the $5,000 for the Roth is difficult for a lot of people!), and some seem completely arbitrary (the “financial salesman” goal is a really odd one), as though they were adding simply to flesh out the 20 things.
I would challenge bloggers who read GenYWealth’s post to come up with their own list of milestones – 5 or 20 or 200 things they’d like to accomplish sometime, whether it be by 30 or just before they die. If you don’t want to go on a vacation, maybe you’d like to save up for a house, or a wedding, or to send your currently-1-year-old niece to Harvard. Maybe you can’t save $5000 to max out a Roth IRA, but maybe you can save $100 or $1,000. Maybe you don’t want to earn side income, but can you push yourself at work for an extra bump in pay?
Chances are, you’re already comparing yourself to a bunch of standards that come from outside yourself, whether it’s your savings (my NetWorthIQ is high for someone my age, but low for someone in Washington, D.C. How am I actually doing?) , your possessions (I love my engagement ring, but that coworker just got a 3ct stunner!), your relationships (I hate loud parties and drinking, but this is what I’m supposed to be doing in my 20s, right?), or your weight (I can run 10 miles without stopping, but I’m not a size 0 so clearly I am too fat).
Why not craft some goals that are made just for you?