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For three years I've had a single goal directing my actions: I wanted to get out of debt. Now that my consumer debt is nearly gone, I've spent a lot of time wondering what to do next. I was worried that I'd lose focus, lose direction. That's not going to be the case. I've set three major financial goals for 2008. After I pay off the last of my final loan next Tuesday, I intend to:

Max out my retirement plan for 2007 and 2008.

Pay taxes.

Bolster my savings.

These goals are ambitious, but I think I can achieve them. In fact, I hope to do even more.

Retirement

I got a late start on my retirement savings. The box company has been setting aside a pension for me, but I only began my self-directed retirement savings last year. I managed to make the full contribution to my 2006 Roth IRA. I've contributed $2,000 so far this year, and intend to max out my plan by the middle of December. In 2008, the contribution limits on Roth IRAs increase to $5,000/year — I hope to invest this amount.

It wasn't until I started writing Get Rich Slowly that I understood the value of saving for retirement. I'm now convinced that it's the most important financial move a person can make. Even if you screw up every thing else, if you make regular retirement contributions, you'll have a safety net at the end of your life.

Taxes

Last spring, my accountant asked me how much I expected to make from Get Rich Slowly in 2007. “I don't know,” I said. “Maybe $2000 a month.” It was a pipe dream, and I knew it. The site was only generating $1000 a month.

“Fine,” he said. “We'll set up estimated tax payments. Every quarter you'll mail $1790 to the IRS, and $320 to the Oregon Department of Revenue.” I figured that I'd be overpaying, which would mean I'd get a nice tax refund. To my surprise, however, I've earned twice as much as I had hoped. This is a nice problem to have, but it also means that I've badly underestimated my tax obligation. I need to come up with about $8,000 by April 15th!

Saving

I'm a natural worrier. My upcoming transition to “professional blogger” gives me plenty of things to worry about. I'm making enough to support myself now, but what if my readership declines? What if I lose the muse? To cope with possible problems, I want to build an emergency fund — an enormous emergency fund.

In my dream world, I'd save $20,000 by next winter. Unless my readership doubles overnight, that's not going to happen. I'll keep that figure as an eventual target, but I'll be happy to have saved $5,000 or $10,000 by the end of 2008.

Other goals

These aren't my only financial goals, of course. I still dream of buying a MINI Cooper — but I'm going to save for it. I also want to do some work on the house — paint the exterior, upgrade the electrical system — and to buy a Stickley chair. I'll regularly set aside small sums of money for each of these things.

Goals are crucial. They facilitate smart choices. When you know that you're saving for a down payment on a house, it becomes easier to forego a new pair of shoes or the Justin Timberlake concert. It's amazing the creative ways you can find to save money when you want to buy a new car. And when you finally make the decision to get out of debt, it no longer seems a hardship to shop at thrift stores or to cook at home. You come to recognize these things as a means to an end.

As we approach the new year, set some financial goals. Set a short-term goal, a medium-term goal, and a long-term goal. Make your goals specific, measurable, attainable, realistic, and timed. If you do this, and if you keep these objectives in mind whenever you face a financial decision, I think you'll meet with a level of success that will surprise you.

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