How many did you get?
I read this post by J Money last year, and thought it would be a good fit for RetireJapan too.
So here are the goals, adapted for Japan :)
15 Goals to Hit On Your Way to Financial Freedom
Not all of these are necessary, or even desirable. It will depend on your situation and outlook. However, they might be helpful or inspiring. As an additional challenge, pick one of the ones you currently fail at and set a deadline to achieve it by :)
#1. Build a starter emergency fund of 100,000 yen. Check. I overpay the account my mortgage comes out of each month, and the excess builds up and pays my property taxes. It's at about 150,000 yen now.
#2. Organize your important financial information in a binder or eFile. Fail. I started doing this but need to finish it and update it. This will be vital if something happens to me and my family need to untangle the web of exactly where our investments are.
#3. Develop a monthly budget habit. Fail. I am not a fan of budgets. I think it's important to know where your money is going, but find it easier to 'pay myself first' and just decide how much to save each month. I don't worry about the spending side of the equation much.
#4. Pay off all of your debts. Check. No debt, apart from the mortgage at 0.5%. We could pay it tomorrow but prefer to invest the capital.
#5. Build a mid-level emergency fund of 1 million yen. Check. We actually have two of these: a personal one and one for my wife's business. The business one is at least 6 months' operating expenses.
#6. Cut your expenses. Check. Cheap mortgage, cars bought for cash, MVNO for mobile phone. We spend too much money on food and travel, but manage to save/invest more than half our income so I think we have earned it.
#7. Be aware of your credit score. Fail. I actually have no idea how credit scores here in Japan work, but I am planning to do a blog post about it soon. Stay tuned!
#8. Earn extra income. Check. I've had a part-time or second job (or jobs) since my second year in Japan. Tough at times but worth it for the extra income, the skill-building, and the sense of achievement. The key for me is to upgrade the jobs so that over time you are doing higher-value or more interesting work.
#9. Read the top personal finance books. Check. I think I have read a lot of these, although I am always on the look for more. You can see some of them on the further reading page.
#10. Automate your savings. Kind of check. I don't have to think about this as it's the same amount every month, but I do log in and make the transfers by hand.
#11. Automate your bills. Check. Easy. I pay all our bills with a credit card, including my wife's kokumin nenkin, electric, gas, NHK, etc. This makes it easy to track them using MoneyTree and also gets us some air miles.
#12. Automate investing. Kind of fail. Our iDeCo and THEO accounts are automated, but I do everything else by hand. I kind of enjoy it though, and again it is mostly just doing the same thing every time, following the plan.
#13. Write a 5 year financial plan. Check. I have a spreadsheet that estimates where we'll be for the next fifty years (yeah, I'm kind of optimistic). I deliberately set the annual numbers slightly low, so we beat the estimates every year :)
#14. Start maxing out your retirement account every year. MAJOR CHECK!! Yep, we max out iDeCo and NISA every year and then try to invest a little on top. We also pay into the pension scheme here and I pay into the UK one too.
#15. Complete your emergency fund so you have at least 6 months’ expenses saved. Check. Yep, we actually have about a year in our personal one, as well as the 6 months for the business.
So there it is! 15 financial goals to hit by 40 (or whenever)! I hit 40 last year, and it looks like I achieved 11 of these.
How about you? How many points did you get?