The Important Things We’re Saving For – Our Savings Goals for 2016

Do you need help figuring out what to save money for? Read how PT saves money and what his goals are for 2016. This will get ideas going for what financial goals you need to have in place.

It’s time once again to review our annual savings goals. Hard to believe, but it’s our 9th year of chronicling our goals like this. You can peek through each year by using the navigation below.

Briefly, we met our savings goals from last year. We maxed out our Roth IRAs ($5,500 each), contributed some excess income to our Solo 401Ks, and effectively saved for the following one-time, annual expenses: real estate taxes, home owners association dues, car and home insurance, Christmas gifts, travel, and car maintenance.

One area where we failed is saving enough for business (payroll) taxes. This number is hard to predict each year with two businesses with variable income. But we weren’t even close (about $4,000 shy) and so I need to ensure we automate more savings deposits from the business income to a separate account for taxes.

Why Share Savings Goals?

I do this – create savings goals – for several reasons:

One, I believe in the power of goals (cue Huey Lewis’ Power of Love).

Two, it helps me implement something I believe in more than goals – and that is systems. That is, we attempt to automate each one of these goals with automatic savings deposits so that it’s not left up to chance that they are achieved.

The reason I’m so open with our goal setting process is that I’ve come to believe in the effectiveness of story in personal finance. And this – saving consistently – is one of the best stories that Mrs. PT and I have to tell. I hope our story is both educational and inspiring – leading you to take action on your own annual financial goal setting process.

As an aside, we used to also create annual debt reduction goals (find those here). But since we are debt free except the mortgage (just refinanced for 15yrs), we have decided to use all of our excess funds for saving for our goals.

Our Savings Goals for 2016

Emergency Savings – We’ve got a fully-funded emergency fund (here’s how we decided on how big it should be), so we won’t be contributing to this fund routinely. But I am going to explore the Betterment overflow account to capture excess emergency savings account funds.

Retirement – Saving for retirement has been our #1 goal for several years now. We place it ahead of short-term savings goals as well as saving for college expenses for our kids.

We currently have a solid amount of money in our Traditional IRAs and 401Ks (deferred accounts). So we prioritize our Roth IRAs and contribute the max each year. We’ve set up an automatic deposit from our checking account each month for a number that will ensure we reach the max at year’s end.

Our contributions to the Solo (or Individual) 401Ks – these are 401Ks we’ve setup through Vanguard for our two small businesses – will not happen monthly or routinely. We will only contribute to the Solo 401Ks if our income reaches a certain threshold.

Short-Term Savings – These items are significant enough to warrant a separate savings account (using our Capital One 360 account). We automate the deposit into these accounts and make sure we reach our goals at just the right time.

  • Income/Payroll Taxes – $10,000
  • Real Estate Taxes – $7,000
  • Travel – $3,000
  • Vehicles – $1,200
  • Auto Insurance – $960
  • Home Insurance – $800
  • Gifts/Christmas – $600
  • HOA – $515

Capital One 360 Automatic Savings Plans

College Savings – We love our kids – 6, 4, and 1 – and hope they are in a position to choose to go get a college education when they reach that age. But we do not intend to pay for their entire college experience.

We are contributing $25 a month per child into a 529 account ($900 annually) and look forward to being able to give them a few semesters of tuition coverage. We’ll let them handle the rest with scholarships, income, and yes, some student loans.

We use the Ohio college savings plan since (1) they have Vanguard funds, and (2) we are in Texas (without a state tax) and would have no benefit from using a Texas college savings fund.

Health Savings (HSA) – Finally, we’d like to be able to contribute to our HSA (held at a no-fee local credit union). But because we use Medishare we cannot, yet. So, we are just spending from this account regularly and hoping the laws will change before it runs dry. Tax free medical savings is awesome!

Want to see our goals from previous years? Click to the next page.



Last Edited: April 9, 2016 @ 3:25 pm The content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Philip Taylor

Philip Taylor, aka "PT", is a CPA, financial writer, FinCon CEO, and husband and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.

Comments

  1. Those are all great savings goals! What about saving up for vacations? We have a fund that we call a “Travel” fund where we put money in order to have cash to pay for vacations every year. This year we were able to go to Hong Kong and Singapore all thanks to having a plan and putting money into a savings account designated for vacations.

  2. Some of these goals are similar to mine.  I have been wondering about pulling my property taxes and home owners insurance out of my escrow and just doing it on my own, since I can at least get interest on the money.  I have a baby coming in the next few weeks, so I have been saving for that for a while.

    • DebtRoundUp,

      Congratulations on the baby! My wife and I just found out we are having twins. A total shock to say the least!

      Is your new baby savings for day to day expenses or college fund? I would be curious to see how you figured on how much to set aside each month.

  3. GaelicWench says:

    I’ve got the 52-week challenge on automatic. My plan with that money is perhaps take a volunteer vacation down under (NSW-Queensland) around Christmas. I just need to remember it’ll be hotter than the hubs of h*ll during that time. I need to pay my way down there and, depending on the non-profit, will get free room and board. There’s a wildlife reserve down there that needs volunteers to work. That would be hard work, but truly rewarding. So, that’s my travel goal for 2014. 
    When I am once again gainfully employed – I am currently going to school FT – through my employer, I’d like to get an HSA account started if they offer it, as well as get back on track for my 401k. My EF is on automated as well…..thankfully, through the VA I qualify for VRAP, so am getting a sizable chunk of money from them to help with school and living expenses. No car loan to worry about, just insurance. 

    One small step at a time…..

  4. I also have a rental property and never thought of the idea of opening a small business account for it. Must look into that option!!

  5. Sounds like you have most of the bases covered. I’d say go ahead and get things automated right now. It probably took longer to write this post than it would take to go ahead an automate your savings 🙂

  6. Excellent post.
    When we used to live in Europe, we had similar goals. Now that we have a child with special needs, everything has fallen apart, but plan to get over this next year. Thanks for kicking my rear end 🙂

  7. Do you save up for a replacement car? That is one of our savings categories. We also save for our donor advised charitable fund. Since we no longer can itemize every year, we bunch schedule A items every few years. Our fund allows us to do that.
    I don’t know what our goals will be since we are considering a move closer to my husband’s job, which will sadly put us back in a mortgage.

    • We are not. But we should probably be putting something aside for that. Even if it’s just a small amount. In the past we’ve replaced our vehicles in the year of a big financial win – bonus, unexpected income, etc. But I know we can’t necessarily count on that forever. Right now we have a 2012 Honda Odyssey we purchased brand new. That will last us another 8-10 years at least. So it’s hard thinking about such a distant purchase.
      I didn’t know about the donor advised charitable fund. I will have to look into that when we lose our home mortgage interest deduction.

  8. It seems like you’ve got everything covered for this year. These are definitely good points to consider when saving and making sure you don’t have loopholes because you’ll never know. I might just make adjustments to my savings goals this year and take note of your plan.

    Have you ever thought of having a ‘fun’ savings? Other people might find this funny, but I’ve been thinking about having one for this year. This can go to those I-want-this purchases and maybe some little trips here and there. What do you think?

    • Great idea! I think we would probably consider our Travel savings account the fun account. But I didn’t really consider other “I want this” type spending. Definitely should be a part of any regular budget.

  9. Philip,

    Great post on your savings! Your financial outlook pretty much mirrors what me and my minions are trying to achieve.

    Your Capital One 360 savings accounts is genius and I’m going to steal that idea to help keep a clear picture of how much is in each fund, as opposed to one big emergency fund account.

    Do you use any brokerage accounts to save for the long term? I know they are risky, but could potentially give a higher return than online savings accounts.

    • Ian, my long term savings is my main focus and we use Vanguard target date funds in tax-advantaged accounts. I do have accounts with Sharebuilder ($1.5K) , Betterment ($10K), and Motif Investing ($.5K). The Betterment account is an extension of my emergency savings. More risk, but more return. I’ve also dabbled in $5K-$10K debt and real estate investments, with higher return. But I wouldn’t feel comfortable with all my emergency savings in anything other than FDIC insured products. Thanks for the comment. 🙂

  10. Financedin says:

    The majority of people don’t have a 12 month emergency fund. It’s unfortunate but most people find it hard to save money, this is why my favorite tip of yours is automating your savings. Much needed tips to start the new year.

  11. Penny Price says:

    Our families’ plan for 2015 lists charitable contributions. I just had a Date Night with the hubby where we talked about how much $$ we’ve allocated for 2015, and we determined which causes we can support. It’s also important that the kiddo sees that giving our time/talent/treasures is part of our regular life.

    I also have a savings goal connected with a small marriage-building trip. Think camping just the hubby and I for 4 nights or so. I have to plan for stuff/food/childcare/PTO and more, but a focus on marriage is a priority we have learned to make.

    It’s not that your 2015 goals are bad….I just wonder if they really reflect the Big Picture? And maybe they do?

    • Penny, thanks for the comment.

      I agree if giving is a wish it should be planned out and part of a budget or saving goal. We do the vast majority of our giving regularly through our Church with automatic withdrawals before we spend on anything else, including savings. So while a part of our monthly budget, they aren’t something we save for gifting later at a different time.

      I love the marriage priority.

  12. Wow, that is so awesome that you can comfortably put away that much in savings every month!! Unfortunately, I was not very good with money management until 2007, when I read Dave Ramsey’s Total Money Makeover. I had over $30k in debt and was renting an apartment. I would have been out of debt within 3-4 years, but a lot of “stuff” got in the way, including a bad marriage and divorce, purchasing my second house when I wasn’t ready, and other things. Fast forward to now, and I am well on my way to being debt free and owning a house again! I have just over $5k in debt, have a nice size 401k savings that I am continuously contributing to, have an emergency savings of about $6k, have a great engineering job, and own my own handmade jewelry business, selling on Etsy. My goals for this year is to get out of debt, and have enough money for a down payment on a house! Very excited!! 🙂

  13. Thanks for the giveaway! Our 2016 savings goals are to max out retirement accounts and contribute to a vacation account. Happy New Year!

  14. I find setting small, short term goals each month to be more successful for me than a master plan for the year. Makes them easier to see through. Just what works best for me.

    Good luck to everyone with their goals in 2016.

  15. Hey PT – Great post as always. I am also a huge fan of CapOne360 accounts because they make it so easy to have separate savings accounts for these types of things. Similar to your setup, we use separate accounts to set money aside for annual expenses (property tax, insurance, etc) and for more fun activities (road trips). For 2016, we are setting money aside each month to fund some home improvement projects.

  16. Our goal for 2016 is to get the irs paid off and start saving for taxes. My husband and I are both self employed and this has been our downfall.

  17. Lindsey thompson says:

    Having just become debt free (but the house) in 2015 we have a goal to contribute monthly to Roth IRAs for each of us, a 529 for our son and save up to buy my husband a new car by the end of the year.heard about you on So Money:)

  18. Our savings goal for 2016 is to start putting money in our savings every month and keeping it there for emergencies. All to often day to day activities have become “emergencies”!

  19. I’m another person who prefers systems over goals but our plan is to invest more in dividend yielding stocks so we can get some stable income during the year. It’s something I started a few years ago, to help smooth out the unpredictability of owning your own business, and I want to do more of that this year.

    • Solid suggestion. I have a desire to get a dividend portfolio going as well. It’s just so hard to pass up that tax deferment. Maybe I’ll start doing a half and half approach.

  20. Penny Price says:

    Our savings goals for 2016 include $1,000 to kids’ college fund (in a MM account), fully funding our Roth’s ($11k in 2016), saving-then-donating $5k to local charities, and otherwise preparing a long-term plan to address our Very Vintage home (which is missing helpful things like insulation and window-weather-stripping). Cheers!

  21. Melissa B says:

    Just started the 52 week challenge to save $5000 in an emergency fund!

  22. Our goal is to fully fund a trip to Arizona this fall and to pay for my master’s classes without incurring debt!

  23. Kim Prato says:

    My debt snowball is almost complete and I will soon have all our medical debt paid off (medical bills and a student loan are the only debt I have). I’m hoping that once the snowball is complete, I can use that money to start contributing to a college savings account for my son. As a single parent, it’s a priority but I haven’t been able to free up monthly money to do it … but this is the year!!!

  24. Becky Riggs says:

    For 2016,I am following the reverse 52 week savings challenge, putting my spare change in a coffee can. I was lucky to have a financial plan created for me so I am sticking to that to help me get out of debt.

  25. I am just starting out with money goals, so I am keeping it simple for 2016. I would like to continue to not have any debt and begin an emergency fund.

  26. Thanks for your PT Money Shot!
    ‪#‎NothingButNet‬

    How ’bout that in marketing you, & doing all you do?
    feel free to use it, si vous plait!

    Maybe for a NY resolution starter and/or a plug for my marketing skills on my LinkedIn profile?

    • My goal is to incorporate what you have done, but in a New Month’s Resolution regarding financial education & planning.
      I am woefully ignorant on most things regarding financial management.
      I plan on incorporating one of your principles, then mastering the understanding & practice.
      Furthermore, to enrich and deepen my own understanding, I plan to ask 3 different friends who are specialized in respective fields to fine tune the implementation for me. & to optimize my understanding by teaching what I learn to others, especially my family, to help them, cement my mastery, & to learn from their questions, things that I have not considered before.

      • Is there a previously posted article that you would recommend for the best order to attack the $?