Tag Archives: one million

2018 Budget Planning

It’s time to plan for a baby. And 2018. I’m aiming to put together a realistic budget, and determine how – with baby I can accomplish my goal of $650k networth by the end of the year (*personal networth) en route to my major next goal of $1M by 40, or sooner. I’m bumping that up to 38 because after that I’d like to save for the down payment of a house. This gives me 4 years to hit this goal.

Principal (estimated as of Jan 1)

Retirement: $265k
Investments: $260k
Owed: -$10k

=$515k + 5% annual goal (goal) = $540,750 ($459k to goal over 3 years, or ~$153k growth per year or $12k per month)

This may not be do-able, but it also may be… if I budget smartly, keep my job, kick ass (get close to full bonuses, if that’s possible) and don’t go crazy spending on baby (and we stay in cheaper housing until baby is 3.)

Lots of variables, so here’s what is more concrete:

Start: $515k
End Goal:  $650k

$110k to be made in savings, investment income, bonus, etc.

  • $25,000 in interest (at 5%, could also be negative, of course)
  • ($85,000 remaining to save or $7083 per month)
  • $4000 monthly savings w/ exception of 2 months 401k contrib. ($40k)
  • ($41,000 remaining)
  • Bonus (after tax) = $10k (*half bonus, conservative estimate)
  • $31,000 remaining
  • Potential value of co stock/ $32k
  • 401k contributions: $24k

= end year at ~$675,000

So, if I keep my job, and kick ass, realistically I can increase my networth by ~$130k in one year, or around 30%.

Or, the stock market can go down, I can lose my job (or not get any bonus), or my child born in August could have early medical issues requiring me to leave my job to take care of it — so this is all a hypothetical, but it’s nice to have goals.

Ending the year at $675,000 is actually a great goal, because that makes it so for the following 3 years I only need $108k increases per year to hit the $1M by 38 goal. Anything excess above the $1M will be saved for a down payment. I’d like to own a house by 39, when my child is 5 and entering kindergarten. I can dip into the $1M investments if I have to then, and the downpayment will be split between myself and my husband so if I can save an extra $150k (and he does two) we can buy a house. Yes, I’ll need to keep my job, but with the $1M cushion I’ll feel a lot better about everything (as long as stock market doesn’t totally crash, which could also happen.)

MONTHLY BUDGET 2018

*note items like health, baby, home are split 50% w/ hubby. This is after split costs.

Income: $7500
Home: $1500
Health: $500
Baby: $800 avg (*includes childcare for 3 months)
Travel: $300
Bills: $200
Shop: $200
Ent: $50
==========
$4000 remaining (***not taking ANY unpaid time off, this plan expects I will be returning to work after 4 weeks of maternity leave. Hopefully I can work from home during this time.)