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I'm not superstitious, but I am a little stitious—thanks to the goal-setting exercises we're doing in today's episode. I started doing this process in 2021, and so many of my past, hyper-specific visions have come freakishly true that it’s now a borderline sacred process to me. 

We’ll start with the big picture “alignment” questions, and then shift into the annual quantitative assessment I do for our financial picture. If you've been feeling stuck or cloudy in your life, this process might provide the clarity and direction you’ve been looking for. 

Get the 2024 Money with Katie Wealth Planner.

Our show is a production of Morning Brew and is produced by Henah Velez and Katie Gatti Tassin, with our audio engineering and sound design from Nick Torres. Devin Emery is our Chief Content Officer and additional fact checking comes from Kate Brandt.

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Mentioned in the Episode

• New York Times article from Jenny Taitz

• Shanna Skidmore’s Blueprint at Home Planner

• Does the Perfect Save Rate Exist? I Figured It Out

• 2024 Wealth Planner Tutorial

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Katie:

Happy Wealth Planner Launch Week here at Money with Katie, rich people. I guess I should also say Happy Thanksgiving too. But you know what? The Wealth Planner launch is always the most exciting part of my Thanksgiving every year. So, I'm your host, Katie Gatti Tassin, as always, and I'm actually so excited to be sitting down for this episode with you, because seems like the perfect time to align our financial and life goals together for 2024.

This is the time when I personally most enjoy reflecting and setting intentions for the upcoming year. I think it's because the energy of gratitude and kind of taking a step back, going into what can sometimes be a busy holiday season, just feels like really fertile ground for positive change. And bonus, it means that by the time January 1st rolls around, you'll have about a month of "practice time" under your belt, so you're not waking up from the eggnog haze right before New Year's to be like, "Oh gosh, I have days to get it together before 2024."

So, as I mentioned, the fifth iteration of our flagship product, the Money with Katie 2024 Wealth Planner, launches this Black Friday. And during launch weekend, everyone who purchases the planner will also get my free annual review template. So, this is new this year. This is the 27-page slide deck that guides you through the same process my husband and I use this time of year to examine our spending, our investing, and our net worth over the last 12 months, and how we set projections and goals looking ahead. So, I'm going to be using this as a loose guide for part of today's episode.

Now, today might feel a little bit different than our, I'll say, normal episodes, so if you're listening to this while lounging around over the holiday, maybe consider grabbing a pen and paper, heading into a quiet space to think through some of these things. The transcript will also be available on our website within 24 hours of publishing, so we'll link that in our show notes, if you would prefer to follow along on your computer or your phone. Some of what I'm going to share today might sound a little bit out there, because I have to admit, when I look back on some of the goals I wrote in years past, it's a little unnerving how much of it came true. And while I'm tempted to be like, "I don't know, it's magic," I think it's actually clarity of vision. So for that reason, we're going to start today with some of the bigger picture questions and visualizations for what we want out of our lives. Then we'll dive into the data analysis component that'll match up more closely with that annual review guide.

To frame the conversation today, I want to share a New York Times article from Jenny Taitz that I cut out and taped on my wall back in 2020. It says, "Stop writing off hard work as luck. Humility is a virtue, but it doesn't need to come at the expense of creating an enduring sense of faith in yourself. When you play down your accomplishments and abilities with self-deprecating attributions, entirely writing off victories to external factors like chance or timing, you not only perpetuate the belief that something negative is on the horizon, you also miss out on the power of self-efficacy, the mindset that you have the ability to shape your life. Knowing you can rely on yourself motivates us to strive, and predicts your capacity to manage your emotions effectively and achieve what matters."

So, this is part of the belief system that I want us to hone a little bit today, that we have agency to improve our own lives. Because what's a reflection and intention-setting session, if not an acknowledgement that you have the ability to create the future you want? So, with that being said, we'll get into it after a quick break.

We're going to begin with those big picture questions. So, if you're going to journal or think out loud alongside me, feel free to pause as we go. I am personally debating introducing visuals to my own process this year, with a sort of hybrid vision board journaling activity, so you do you. I typically will only write things down, but for some reason I'm feeling like that could introduce an interesting layer. So, by the time you're listening to this, I will actually be sitting down metaphorically alongside you to do my reflection for 2024 too.

And if I borrow someone else's modality or process today, I will tell you where it came from, obviously credit work accordingly. So, this first framework that I want to mention is actually a page in Shanna Skidmore's blueprint planner, and these are a few of the questions that she recommends asking as you review your previous year and look ahead. So, I believe she actually has this as a freebie template online for this specific exercise, but I'm going to go through a couple of them.

The first question is, where am I today? So, back in 2021 when I answered this question, I wrote, "$220,000 in annual Money with Katie revenue, working full-time for Meta, and married to Thomas in Colorado." So this question is relatively open-ended on purpose, and what you choose to focus on I think says a lot about what matters to you right now. I led that year with the business and financial aspects of my life, but I also included my physical location, my marital status, because those things were relatively new at the time and felt really relevant. Today, I would probably say something like, "I'm a full-time acquired business owner, actively stretching her capacity to learn and grow, and I live in California. I'm a wife and a daughter and a friend," or something of that nature.

The next question is, where do I want to be one year from today? So, you start by writing the date of one year from today. So, in 2021, I had written, "Full-time Money with Katie with $500,000 in annual revenue." Now, I remember how I felt writing this. I remember specifically thinking, there is literally no way, but I might as well put it out there. And by November 2022, by that year later date, I was doing Money with Katie full-time, and our revenue was more than $1 million. So, this is what I mean when I say sometimes the process in retrospect feels a little magical.

When I did it in 2022 for 2023, I remember focusing a lot on that location piece. Distinctly remember being afraid to write, "I'll live in California, I'll live by the water," because we're Air Force, we didn't get to pick our assignments. But I wrote it anyway, and here we are. I live in California in a house on water. So, like I said, I don't know, clarity of vision, dumb luck. It's kind of a mystery to me. But all I know is I'm going to keep going with this system, because it's worked out pretty well for me so far, so hopefully it does the same for you.

Now, as I think about November, 2024, I think I'd probably write something about how I'll be a more sophisticated operator of my business with, I don't know, a growing media empire, we'll say. But like I said, I'll be getting deep in my own feels for my own assessment alongside you as you listen to this, so I'm actually not quite sure yet how I'm going to answer that question.

The next directive is, give yourself a rating from one to ten in three categories: the personal, professional, and financial. So you'll rate each one, and then, and this is the important part, think about what a ten would feel and look like for you. So, in the personal category, I would give myself a nine this year. I worked with a trainer and a nutritionist, they helped me fix my diet and exercise habits, and I feel really happy in my marriage and my friendships. But a perfect ten would look like having other hobbies outside of work, which is something I want to focus on in 2024.

In my professional category, I think I'd give myself a seven or an eight, because I feel like executing on our new vision is still very much a work in progress. And a perfect ten would be working three days a week, having a lot of brain bandwidth to feel extraordinarily proud of every single piece of work I'm generating, to feel like our team is super empowered and really clear on the vision, and really having that translate to our revenue goal.

And then financially, I'm feeling as though I really couldn't ask for more. I feel very grateful to be in a position of abundance and consistency. So, I'm going to give my current state a ten. And I would also add that if you're also going to explore adding visuals to this picture this year, it might be easier to demonstrate what a ten feels like with a picture than with words. So, what is the energy that a ten would have, and how can you start adding some imagery around those feelings? Because that might clarify some things too.

And then finally, for each category, you're going to answer two questions. What's working? What isn't working? For example, in 2021, for my personal category not working, I wrote, "Using entire weekends to work, not having any hobbies, and putting my self-care on the back burner." And it's funny, because I will admit to look back and see the commonalities, the common threads that are still a little bit existent, but also to see where the hard work really paid off and things have improved or been worthwhile. There were certainly sacrifices I was making at the time that I'm glad I made them, even though they didn't feel so great as they were happening.

But committing to a real hobby in 2024 is definitely on this vision board for me. Right now, I'm leaning toward learning how to play piano. I think that that would be a fun use of my time, and something that would make me feel a little more well rounded. So, I'm also going to attempt, we'll say attempt is a strong word here, to take a more active role in travel again. I think I've been in that really passive wedding guest travel phase for the last 18 months of my life, where I'm only traveling to go to weddings, and so I'm not really putting any time or energy or effort into the trips, and I would like to get back to that.

Okay. So, now we're onto vision settings. So, once you've got that stuff jotted down, we're going to think through some big fill-in-the-blank questions. Again, these come from Shanna Skidmore. They're very simple. It's, number one, more than anything, I would love to blank. Open-ended, right? Number two is, I'm happiest when I blank. Number three. More than anything, I would love to be blank. And then, if I could do anything, I would blank.

So, one more time through, and I'll give you some examples that came to mind first for me. Number one, more than anything, I would love to feel really confident in my ability to run a business, while also actively seeking out new challenges that stretch that ability. Number two. I'm happiest when I wake up early on a Saturday morning, and get outside with my dog and listen to a podcast. Number three. More than anything, I would love to be a multidimensional person with interests outside of work. Probably catching onto that trend by now. And number four. If I could do anything I would... Okay, so see, this one's actually hard for me, because for the longest time and for many years, my answer was, I would do Money with Katie full-time, so I feel like I've already got my lifetime do anything box checked. So, I really need to go back to the drawing board on this one.

And then finally, our word for the year. So, in thinking back on this, my 2022 word was alignment, and I chose that for the way I felt very aligned to my life's purpose in taking Money with Katie full-time. In 2023, it was expansion, to reflect the way I wanted to build upon the foundation and really explore what was possible. And my word for 2024 so far, subject to change, but right now I'm leaning toward refine, which is the way I want to focus on having smarter systems and cleaning up the areas where I've taken shortcuts or I haven't given it my all, to maybe hone more of those soft skills, which to me really connotes a sense of craftsmanship, which feels very inspiring right now.

So, if you're not normally a big intention setting person, you might not immediately see the value in having a word for the year or answering questions like these. But my perspective is that all of these practices really influence the narrative arc that we're telling ourselves about our own lives, which directly affects our behavior and our habits, which is going to impact our outcomes. And as y'all know, I love data, so though there are some things like the answer to the question, "Where do I want to be on November 22nd, 2024?" that you can't answer with a SUMIF formula, there's a lot that we can do with those formulas. So, data nerds, it is your time to shine. We're going to switch gears now to the spreadsheet brass tacks. That is, right after we take a quick break.

All right. So, as we get into the data, our objective here is to review our 2023 numbers, and then forecast our financial progress for 2024. So, I like to treat this as though I am a business or my household is a business, and we're trying to make sure it's running efficiently, so we're going to begin with income.

First thing, we're looking back. So, you can either use your 2023 Wealth Planner for this, or you can go really hard and download your most recent pay stubs, and then you can look at the year to date amounts. But you basically want to jot down how much your household has earned in income this year. So, this should include W2 jobs, 1099 income, tax refunds, bonuses, both received and expected, commissions, gifts, you name it. You want to capture the full extent of what came in. And for the sake of simplicity later, I would recommend only counting post-tax income, since you can't save or spend what you paid in taxes. So, that's just for the sake of simplicity, but it's up to you.

So for us, that looks like my W2 salary, my husband's W2 salary, my business's revenue share, my book advance, and then a few rogue speaking engagements here and there. So I like to make a list by line item, so I can see what's really moving the needle, and then jot down the total. And then it's time to look ahead. So, now that we know our figures for 2023, I like to forecast how 2024's income picture is likely going to shape up. If you know of any key cash infusions that are coming, so think estimated tax refunds, gifts, bonuses, like we said, in addition to any W2 base pay or 1099 income that you're expecting, make a list of what you're anticipating will come in. And sometimes it is helpful to do this by month.

And this is partially the first area where you can marry the data-driven forecasts with your goal setting. So, if part of where you want to be in a year from now is a job that pays you 50% more, you might write down a footnote here of what you would expect your new income to be after a certain point in the year when, not if, but when you get this new gig, like going from 70K to 105K. And I will admit, I will concede, this is almost certainly pseudoscience, but I do like the way this kind of sends a signal to my subconscious mind that something is already in the works or it's already happening, and that it's a when and not an if. So, that's an option that you have here. Okay. Moving on to spending.

All right. So, while we're looking back at our spending, this is a little challenging if you don't use the Wealth Planner or another spend tracking app, but now you'll want to understand how much you've spent in 2023 and what your average monthly spending was. So, brownie points if you know what goal spending you were targeting for the year, so you can compare the two numbers. So, this year it looks like our actual spending was about 10% higher than our goal spending, so I'm anticipating that we're going to close out the year over budget. It's also helpful to review which categories specifically gave you a hard time. So for example, we had a goal to cut our food spending in 2023 by about 30%, given what this exercise revealed to us in 2022, and so far we're actually tracking toward hitting that goal, which is great.

But what surprises me in looking at this year's numbers, because I had to plug all my 2023 data into the 2024 Wealth Planner so I could test it, but also so I could use our new year in review tab for this episode, is that our miscellaneous budget is roughly three times higher than expected, which tells me that we're actually doing a lot more party and bullshit spending than I had realized. So, we're going to be digging in a little bit deeper there. Part of my assumption is that it's things like Taylor Swift tickets and the fact that we moved across the country and ended up having to pay several thousand dollars for that. My husband bought a drum set. There were a few things that we bought this year that we really hadn't planned on buying. And one last finding for me here, my pet's budget is a lot higher than expected. We had budgeted about $7,500 this year for Georgia and Sam, but Georgia ended up having a surgery and needing some additional care for a bone tumor, so we're actually expecting to be way over there as well. And that will also impact how we set goals for 2024 and where we allocate money.

So, speaking of '24, we're looking ahead now. I am particularly excited about this year in review tab and how it'll simplify this process in the future, because it's going to tell you what your monthly average was in each category and subcategory, so you can make more informed estimates as you set your new budget. So in the meantime, you can probably look at your overall spending, divide by 12, and then figure out what your average monthly burn is to help guide your decisions moving forward. For example, if your goal monthly budget in 2024 is $4,000 per month, but you saw that in 2023 you were actually spending closer to $6,000 a month, that's probably a sign that something is amiss, and that it's not likely to work very sustainably in the future unless something really changes. So, you'll want to try to pull out a spending category or two that seem erroneously high to you, and then start thinking about potential explanations, solutions, the same way I just highlighted a couple that popped out for us.

And then once you've spent enough time with the data to feel good about setting your 2024 spending plan, you can fill out that read me first tab of your fresh blank 2024 Wealth Planner or budgeting software of choice, and then chart an informed course for next year. Keyword here is informed, right? Because even if you follow a crap budget perfectly, the outcome will still be crappy. It's also nice to think about what came up in your personal reflections while assessing where you want to allocate funds. So, if you jotted down that joining a health club with a sauna would take you from an eight to a nine in your personal life, you probably want to budget for that membership in this plan.

You'll want to ask yourself throughout this exercise, how can I better direct my money toward things that are going to improve my experience of life? So for some, that might actually mean paying to remove stressful components first, like you might hire a professional cleaning service, or pay for garage parking next to the terminal more often, or splurge on weekly grocery delivery. So, you want to make sure that you are referencing back to those goals as you're filling out the plan.

Okay. Time to look at the other side of the coin, which is your saving and investing progress. So, we'll look back first. The 2023 Wealth Planner will tell you your total short-term saving and long-term investing numbers in the year to date summary box on each tab, so feel free to look at the most recent one. If you want to get more granular and look back by account or goal type, that'll definitely earn you some extra credit, and we did build that functionality into the 2024 one, so that the year in review tab will summarize total contributions to each account for you as well as monthly averages and things like that. So, that'll be done for you next year, but this year if you wanted to, you could do that manually.

And get a sense for the total amount you saved or invested this year, as well as your average monthly contributions, and just compare that number to your spending and income figures. Does it seem to add up properly? Or are there potentially phantom costs that are not being accounted for? Calculate your save rate for the year, which is the percentage of your income that you saved, and don't forget to include any paycheck contributions to retirement accounts that might have happened before you saw your take-home pay. If you're taking it a step further to calculate what went into each account, confirm that the outcomes match your priorities and you don't have any old zombie transfers happening, like an automated savings goal that you just never turned off. Yes, I am talking to you, the rich girl who is still putting money into a $90,000 emergency fund instead of investing.

And then finally, to round out this part of the reflection, check in with your net worth from January and compare it to your net worth now. How much did your assets hopefully grow by? I was really excited at first, because I saw that we had grown by about 30%, but then I saw that that was pretty much only from contributions, and that our net worth actually went up by less than we contributed overall, which is just a testament to making progress despite volatile markets, I suppose. But it's a bit of a lumpy year.

And then looking ahead, now is the time to think about what you want to commit to next year. Are there any accounts you really need to kick into gear, so that if you're thinking you're buying a house in two years from now, it's like, "Wait a second, we actually have to turn up that contribution"? Maybe you have those accounts receiving the automatic ones that you need to turn off. What about your overall save rate? How do you feel about that? Do you want to save more? Do you want to save less? If you remember from our optimal save rate episode, going from saving 10% of your income to 15% shaves seven years off your working timeline, so that little 5% incremental bump does a lot of heavy lifting, but after a certain number, you really start to see diminishing returns. So, you might not even be deciding that you want to save more.

And then assuming your income and spending pan out as planned in 2024, what is your expected save rate? So we can think about this like your personal profit margin, and that's how we refer to it in the annual review template, because it tells us what we're really gaining for the future from our time worked. After my first few months of working full-time, when I had basically nothing in savings, I had a real record scratch. "How did I get here? Wait, what's the point?" moment, because I had just spent 40 hours per week in the unflattering glow of fluorescent lighting, with an increasingly painful lower back from this stupid desk chair, and I was treading water financially. I didn't have anything to show for it. And that unnerving treadmill effect feeling is actually what prompted me to start doing a lot of financial soul-searching. So, now's the time to set that save rate goal for 2024. And if you find that you are going to be saving less than you anticipated, look at your income, look at your spending, figure out if you can expand the former or contract the latter to get a little bit closer to that target. And remember that both are pieces you can play with.

Okay. So, a couple other places we want to review. One is debt payoff. So, looking back, were you able to pay down debt this year? If you were, congratulations. The 2023 Wealth Planner's year to date summary box will tell you your total debt pay-down amount, but you can dig deeper into the weeds by either looking at that non-car and home debt pay-down section if you're using the planner. Or you can go into the net worth tab, review how your liabilities have changed overall, and then subtract the total now from the total in January, just so you can see how much total debt you have paid off. The 2024 Wealth Planner will also have an area for tracking debt pay-down if you need it. And if you're using another means of tracking, you can compare your most recent loan statement to your January statement to see how things have changed over the year.

And then looking ahead, now's a really good time to check in with your debt pay-down strategy. Look at the interest rate on the debts that you still have. Are you focusing on the ones that make the most sense, like the highest interest accounts? Or have you been funneling all your extra funds every month toward a loan with a fixed 3% rate without thinking about it? So, just make sure that any debts that are hanging around for an unnecessarily long time, that you could just aggressively wipe out with a few months of skipping takeout nights, if that's even an option either, because sometimes you just let things pile up and you kind of accept them, but you might be able to knock them out really fast. Remember to build that monthly payment plan into the budget for 2024 in the debt payoff section.

And then the last thing you might want to consider is irregular spending. So, irregular spending is something that we are building in a little bit more directly this year, but looking back, I've already mentioned to you that my miscellaneous category was [inaudible 00:25:47] in 2023. And there's likely not a ton of looking back to do here that you haven't already done in your examination of your spending habits, but what's important now is looking forward. The only thing I'd recommend you don't skip in your reflection period here would be assessing the ROI on your big irregular expenses. One of ours in 2022 was our temperature controlled mattress cover, and it was a big investment, but it really improved our sleep quality, which we know is a huge component of meeting our health goals, so our consensus was that that was worth it. That was an irregular spending item with a really high ROI. And that's a good lesson, that we don't regret investing in things that improve our health. So, someone call Bryan Johnson, let him know.

Now, looking ahead, there are a couple good questions that I think can help guide us here. So, how many weddings are you going to next year? Do you have international trips on the horizon? What about trips to see family? Are you going to be moving? Are you getting a different car? Are you adopting a dog? Are you replacing your couch? Is your kid going to start daycare? So, you might not have thought to include some of that stuff in a regular budget, since these are all one-offs, or it might be new expenses for you, but you'll want to make sure you are somehow allocating funds to them. So, think about how that'll either impact your save rate, if you're going to be shuffling money from saving and investing to pay for them, or your net worth, if you already have that money set aside in cash and you're just going to be deploying it. So, there's a spot in the 2024 Wealth Planner where you can input planned irregular expenses, and then each month you have the opportunity to add any unplanned expenses, and it will ask you if you want that to be counted in the budget or not.

Another section of the Wealth Planner that might help with this would be the actively contributing and goal account portion of the asset section, so you'll basically have the opportunity to link accounts to certain goals. So, if you're going to start saving for something that aligns to your vision of the next year, you can begin tracking contributions right away. And as a weirdly specific but hopefully helpful aside, if you use points or miles to travel, you might also take this opportunity to just jot down what you've got in the bank to offset travel costs. So, if you have free night certificates or travel credits from a canceled flight or vouchers or you get $200 back on a hotel, you never know, but it's kind of nice to get a sense of what types of travel credits that can offset the actual money you're going to have to spend on these things. And ultimately, what do we want all of this to ladder up to? Making sure that we are moving toward our goals, and that for some of us might include getting closer to financial independence.

Okay. So, we'll talk now about progress toward financial freedom, because when you look back and you look at your net worth tab, you can see how far you've come. And if you're saving in specific accounts for specific goals, you can see how much progress you've made in those too from the last year. And in the financial independence tab, you can see how you're currently tracking toward total financial independence. And for those without the 2023 planner, the 2024 Wealth Planner will also give you an updated estimate right away, using all of your current information.

Now, if you prefer to do this manually, you'll basically look at your current net worth just based on your invested assets and the assets that you have liquid access to, we'll say, and then you'll calculate your FI number, so you'll take monthly spend times 300, that's the easiest way to get it, and then you'll divide your current net worth by that FI number to see your progress to financial independence, what your percentage toward financial independence is.

A few other important questions to assess at this point. What's your cash position? Do you have way too much cash? Do you have not enough? What percentage of your total net worth is in investments or in real estate? And are you happy with that asset allocation, or are you underweight or overweight anywhere by accident? Not intentionally. Now, I would say most people find that they're either overweight in cash or real estate unintentionally, but your mileage may vary. If you are a real estate investor, you probably would not consider having a bunch of cash and having a bunch of real estate being overweight in those categories, because that's your strategy. But you want to make sure that your allocation matches that strategy.

And then looking ahead, what year are you currently projected to hit financial independence? What does the path there look like for you? So, the FI tab will tell you, but don't be afraid to play around with that a little bit. And you can overwrite the formulas for spending and income. You can always just command-Z to undo your changes, but see what happens if your spending goes up or down a little bit, or your income goes up or down a little bit, or you start making more pre-tax contributions so your tax rate goes down a little bit. And then determine, are you satisfied with that timeline? Does that feel manageable to you? Does this feel sustainable? Or is it indicating that you might want to revisit a spending or saving strategy? I personally found that we actually had some lifestyle creep that was pushing out our retirement date more than I had originally anticipated, so we are going to intentionally trim back a little bit to try to get ourselves back on track. And as you fill out the monthly tabs in the 2024 Wealth Planner, the status bar across the top of each month will tell you what percentage of the way you are to financial independence, so you'll be able to watch yourself inch closer and closer, month by month.

As noted at the top of this episode, my 2024 Wealth Planner drops this Friday and will be on sale all weekend to those on the wait list, and will come with that free annual review template that I used as my basis for this episode. So if you'd like to be notified when it's available, you can add your email address to the link in the show notes, and we'll also link to the tutorial video that shows how to fill out the planner, in case you would like to put some visual oomph alongside what you just heard.

But regardless, I really hope this exercise was helpful for you, and let us know what you find. Let us know at moneywithkatie@morningbrew.com if anything interesting pops out at you. This is definitely a borderline sacred process for me every year, and I really love the opportunity to marry those qualitative questions with the quantitative deep dive. And as a reminder, the transcript for this episode will be in the show notes page if you would like to revisit it or if you want to see the questions listed out. But either way, happy planning.

I will see you next week, same time, same place, on the Money with Katie Show. Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin with our audio engineering and sound design from Nick Torres. Devin Emery is our chief content officer, and additional fact checking comes from Kate Brandt.