Posting my plans and goals for 2019 makes sense, after I reviewed the year of 2018 on Monday. I have been looking forward to 2019 for a few weeks already, budgeting and planning.
I will plan out my goals both conservatively and optimistically, to arrive at a range. Landing anywhere in that range would make me very happy.
Also, I decided to start posting actual numbers here to hopefully paint a better picture of the situation and the road to Fire The Boss.
Let’s see what we’ve got here!
Increase in Income
I have drafted a financial plan for 2019, with a lot of variables. I don’t like variables, but not everything is known in advance so we simply have to deal with them.
One of the unknowns is the increase in income. I’m still in the phase of my career where I expect my salary to increase, however nothing is certain.
One thing that is certain, is that my income tax will be slightly lower with our new tax plan. That means that I will increase my net salary a little bit even if my gross doesn’t increase.
The expected (net after taxes, company car, pre-tax retirement savings) salary range from conservative to optimistic will be 2,550-2700 euros per month.
Regarding bonuses I expect a 1,500-2,500 euro net bonus next year. Also my tax return will probably be around 1,000-1,500 euros. Next to that, I plan to earn at least 1,500 euros net from my side hustle, but targeting an optimistic 3,000 euros.
That means my total yearly net income will be in the range of 34,600-39,400 euros.
To continue the alliteration this paragraph is about the expected expenses!
I’ve done the budget for next year, and expect to spend around 1,700 per month on fixed costs such as the mortgage, but the number also includes discretionary spending such as vacations and clothes, and reservations for replacing my laptop and phone when the time comes.
This amounts to 20,400 in yearly spending.
Savings Rate Goals
In 2018 I had a target savings rate of 40% and it’s still unclear whether I will make it or not. It depends on whether some costs fall in December or January I guess. It doesn’t really make sense (the costs are there anyway) but still it would be nice to hit that number.
For 2019, I will increase my goal by 1% to a massive 41% in the conservative plan, to a whopping 48.2% in the optimistic plan.
I will post two differently calculated savings rates in the future.
Saving Amount Goals
The above means that I have to save 14,200-19,000 euros next year and add them to my investment portfolio.
If that works, I will have gained an additional 2.4%-3.3% in financial independence (as calculated with a 3.5% withdrawal rate).
Whether my portfolio will actually increase by this amount is very uncertain and depends on a lot of outside factors. One of them is the stock market performance, and I don’t expect 2019 to be a fantastic year to be honest.
But who knows, nothing is certain!
Plans Never Work
No battle plan survives first contact with the enemy. There’s always an event that was not part of your contingency plans.
The same holds up for your financial planning. Anything can change everything. So while I think it’s good to plan for the future – it gives you a sense of where things are going – nothing is ever set in stone. I know I will not necessarily make this 41% savings rate work. But sure as hell I’m going to fight for it!
What does your financial plan for next year look like?