I’m back! Life Updates

~Progress, not perfection

Hello! It has been almost two years since my last post!!! 😁 What’s been going on?!?  How are we doing financially? Did we move? What are our new goals? Let’s catch up!

My husband and I are in our mid 30’s and I use this as my safe place to keep myself motivated and on track. Since my last post we have moved back into town. We chose not to move to another metropolitan area as we didn’t feel like the job markets are as good as were we live and the move didn’t feel “right”. We purchased a home with a 20 year mortgage and that is our only debt.

The things that are going well:

A) One year of expenses saved in our emergency fund

B) Contributing 12% to 401k (both myself and hubby)

C) 20 year mortgage $178,149 remaining at 4.125%- starting mortgage $192,500 (Sept 2018)

Things that have changed:

A) Hubby recently (this month) decided to transition his side hustle to a full time job.   In addition he has started a new part time job that provides benefits (health insurance, 401k, etc) so we won’t have the added expense of adding him to my benefit plans. Benefits start after 6 months so we will be holding off on contributing to his retirement until then.

B) We will be living on less income. End of story. Just kidding, it’s true but we will make it work! 🙂

I will create a separate post on updated goals as with life this is a work in progress  and if I don’t submit this post I’m afraid I might change my mind in posting since it has been such a long time!

Thanks for reading this if you did 🙂 The goal post will be up soon!

~Rachel

 

 

 

 

 

 

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No Spend Challenge!!!

We completed our first ever No Spend month in January. What an experience!

Things I learned:

• Eating out during the week for lunch adds up! Normally I would grab something out about 1-2 times a week. So I was spending $20/week or $80/month on lunch!!! Before the challenge I didn’t think of my lunch habit as a big deal at all. Good news is that it has been 6 weeks & I haven’t had lunch out yet this year!
• It helps to reset your spending. Spending money on my health is a priority which meant that I was spending upwards of $100/mo on supplements prescribed my naturopathic doctor. To be honest I’m not sure that they were improving my life. With the No Spend month I started using up my supplements & once one ran out I decided if it was something that I could tell was impacting the way I felt. So far I’ve only added one supplement & found an inexpensive drug store version of another.
• I thought my husband was the person who spent the most discretionary money 🤔 It was shocking to find that he wasn’t…I was! By nature I’m the saver. He’s the spender but now I realized that that isn’t always the case. He had a much easier time not spending during Jan. Most of the purchases he makes are for projects around the house & with the challenge he worked on using things he already had at home to do.
• Little purchases do indeed add up! $5 here & $10 there over the course of a month matters.
• Eating through your pantry & freezer feels really good! Less clutter & more chances the food will not go bad because we found food we had no idea existed in the feeezer.
• Challenges like this can be fun! We were more creative & thought of it as a game that we could no doubt win 😊

We we were able to save $250 in January due to the No Spend Challenge!!! So excited to make an additional payment on our vehicle 🚘 loan!!! 

So far Feb. unintentionally has been a No Spend month as well. We’ve only purchased necessary items but if we purchase the occasional item we aren’t going to beat ourselves up over it.

Goal: Striving for intentional purchases with life balance. 

Have you completed a No Spend challenge? What did you learn? Did anything surprise you? Would love to hear about your experiences 😊

~Rachel

Welcome!

 

What I learned from Dave Ramsey

~You weren’t born to just pay bills and die.

Dave Ramsey is someone who I started following about two years ago. He has a syndicated radio talk show regarding finances & is a “say it like it is” kind of guy.

He guides his followers to follow the Seven Baby Steps.

1) Build up a $1,000 emergency fund.
2) Pay off your debts smallest to largest using a “debt snowball.” Throw out conventional wisdom that says to pay off the highest interest rate first. Personal finances is 80% behavior and 20% head knowledge. Having some “small wins” paying off the little debts will build up some momentum for the larger ones.
3) Build up 3 – 6 months of expenses in an emergency fund. This will get you through life’s emergencies that will inevitably come up.
4) Maximize your retirement savings at 15% of your pay in 401ks, retirement plans and Roth IRAs.
5) Invest in a college savings plan like an Educational Savings Account (ESA) or a 529 plan.
6) Pay off your home early.
7) Build wealth, have fun and give some of your money away

-Baby Steps are accomplished one at a time, no skipping ahead 😉 After completing Baby Step 3, you will work on steps 4, 5 & 6 all at once (assuming you have a mortgage & children). My husband & I are in 34 years old & are working on steps 4/6 (as we don’t have children).

What I have learned from Dave Ramsey:

Don’t make excuses!

Credit cards are lame

Leasing a car is one of the worst financial decisions you can make

Getting out of a financial mess isn’t going to be easy & it may take a considerable period of time but in the end it will be worth it. It probably took a while to get into debt, it will take some time to get out of debt too.

Living below your means is really the answer to getting out of debt & living the most financially sound life. If you require little to live there will be less stress on maintaining your life. With less stress you will likely have more options in life. Possibly you choose a more rewarding job that offers less income, no worries when you are living below your means anyway! Maybe with no debt you are free to decide to move across the country if you so desire. Options people!!! So underrated…talk to me when you hate going to your job everyday but you have bills so you trudge through another day.

My husband & I sacrificed & worked extremely hard to pay off 70k of student loans in 6 years. If we would have took the easy road & made minimum payments we would have been paying on them for an additional four years!

An additional four years would mean that we wouldn’t have been able to move onto our next goal which was pay off our vehicle loan which we accomplished March 2017. In addition we were able to save up to travel a week in tropical island of St Lucia as well as beautiful Vancouver, Canada. Both places we would highly recommend!!!

My final takeaway is if you put your effort, energy & time into something you want badly enough (like improving your finances) it can be done!

~Are there any other Dave Ramsey fans out there? What other things did you learn from listening to him or following his program?

~Rachel~

July Financial Update

Great things are done by a series of small things brought together. 

~Vincent Van Gogh

If you haven’t read my Goals & other financial updates… post please head on over there first.

July was back to normal which is a relief. As you may recall we paid off our vehicle loan in March, started contributing 12% to our retirement & are debt free excluding the house (yay)!

At the end of June we started, drumroll please…a sinking fund. To a majority of people this would be a pretty mundane step but for us it seemed so out of ordinary. We’ve had a savings account for as long as I can remember & any unexpected or nonrecurring expenses were taken out of the savings as to maintain a consistent balance in our checking. We were adding to our savings each month (and with the expenses occurring infrequently) it didn’t have much of an impact on our savings. The sinking fund will be in a separate savings account which will keep it easier to differentiate from our emergency fund. Now that we are debt free, it seems like the next logical step to financial independence.

Now I didn’t go too crazy on the sinking funds. One is plenty to get us started as baby steps seem to work best for us. We don’t plan on replacing our vehicle anytime soon (cross our fingers) but you can’t start too early, right?

SINKING FUND
Vehicle 🚗

June 2017 $200
July 2017 $200

Balance $400

Desired balance? 15k???

Yeah, I know what you’re thinking. It’s going to take years to reach our goal at that rate! 6.25 years to be exact 😉 Progress is progress 🙂

As I explained in my Goals & other financial updates… post we are unsure if right now is the best time to funnel our additional money each month into paying down our mortgage. I’m more comfortable just setting it aside until we are more solid in how we feel on moving. I’m pretty sure winter driving might help us decide 😉 Or the opposite could happen & we realize that it isn’t so bad (excluding a few treacherous days) & we take the money & send a lump sum payment to our mortgage company.

July additional money saved for mortgage payoff:
$700

Balance $700 (this is our first month)

As always feel free to leave a comment or any questions you may have 🙂

~Rachel

Goals!!! And other financial updates…

Trust the wait. 

Embrace the uncertainty. 

Enjoy the beauty of becoming. 

When nothing is certain, anything is possible.

~Unknown

Yep, I skipped June’s update but I’m back to keep myself held accountable. June ended up being a month where I wasn’t so rigid on the budget & it showed. Since paying off our vehicle loan in March 2017 & increasing our 401k contributions to 12% I felt a little lost. Not gonna lie we enjoyed the money we spent in June. We went on a day trip up north & went out to a nice restaurant for my husband’s birthday along w/another meal just because. It was enjoyable & eating out is something we don’t do all that often so it felt special.

However, it feels like we’re in a financial slump. We haven’t fallen behind but in June we weren’t really getting ahead much either. We loosely stayed within budget but had only $200 to add to savings (A normal month would be more like $700-900). The lesson learned is that we always need goals to make progress in life, no matter how small.

The hard part that both my husband & I struggle with is if we should move, where & when. We currently live in a spacious updated 1903 two-story home that we both love. We like the community that we live in but the one downside is the commute. I drive 60 miles a day (35 mins each way excluding winter) & husband’s commute is a little less (25 mins each way). We live in North Dakota where the winters can be treacherous driving (land is very flat so blizzard like conditions are not uncommon). We would rather not move closer to town because we would lose the serenity of why we live where we live, if that makes sense. So our plan would be to move to another metropolitan (medium size Upper Midwest city) which would require us to start over in a new city. We are both excited & beyond scared to make the leap. Which leads me back to needing goals to make progress in life. I’ve had my heart set on paying off our mortgage by 40 (we are 34 & 33) but if we don’t intend to stay in our home long term should we continue to aggressively pay it down? Or is there another place to put it? Our background: we are debt free (excluding our mortgage) with 6+ months of an emergency fund saved. If we continued to stay in our home we have a desire to purchase land where we would build a bare bones cabin for summer camping. I need to state that we both feel blessed to have this problem-to not know what to do with our additional discretionary money. We’ve worked extremely hard in the past ten years purchasing our first home & renovating it, getting married, traveling & paying off 70k of student loans. This was no easy task but we are grateful for our health & the opportunities that allowed us to work hard to get where we are today.

What advice would you give? We’d love any insight that you may have 😊

~Rachel

May 2017 Financial Update

~It always seem impossible until it’s done

Nelson Mandela

This was a let’s get this new budget working smoothly month before we hit the ground running. I’m looking forward to paying additional on our mortgage but I just recently started (this month to be exact) a new budget line item for sinking funds. Those that follow Dave Ramsey may be familiar with the term. Essentially they are funds for those expected nonrecurring expenses, like Christmas, vehicle registration tabs, subscriptions, etc. In the past we didn’t include them in the budget & I realized that when those things came up I was bummed, not necessarily because it was something we had to pay for but more so because it wasn’t in the budget. I’ve been toying around with adding them for a while & realized there’s no better time.

1) Pay off vehicle loan by August 2017

DONE ✅ (completed March 2017)

2) Change both of our 401k contributions to 12%.

DONE ✅

3) Start paying down our mortgage faster so that we can be totally DEBT FREE! Currently we purchased a home Sept 2015 on a 15 year mortgage so we have approx. 13 years left!

-More information to come on this!

Also, I’m looking forward to revamping the goal list in June’s update as there’s only one goal left 😊 Don’t worry…I’ll be adding more.

~Rachel

Financial Update-April 2017

~Giving up on your goal because of one setback is like slashing your other three tires because you got a flat. 

The last two months have been anything but normal. I had surgery on my elbow to remove a benign bone tumor & am currently in physical therapy to regain mobility. It has been physically challenging as well as emotionally & financially. We have money set aside for the medical deductible & co-pays which is a blessing. It feels empowering to “weather” this storm. Things like this do & will continue to happen in life & we just have to plan as much as we can & let everything else happen.

As you may recall in March we became debt free except for our home.

1) Pay off vehicle loan by August 2017

DONE ✅

2) Change both of our 401k contributions to 12%.

-Working on it! As of now I have changed my contributions to 12%. Husbands is at 8%. Hopefully this will be complete by the end of May. I had indicated in last month’s update that we were planning on saving 13% but at this time I feel a need for more wiggle room in the budget. Will adjust once I have more of a comfort level of the numbers.

 

4) Start paying down our mortgage faster so that we can be totally DEBT FREE! Currently we purchased a home Sept 2015 on a 15 year mortgage so we have approx. 13 1/2 years left!

-More information to come on this!

~Rachel

 

 

March Financial Update

We have some exciting news to share!

WE ARE DEBT FREE (excluding our home)!

We paid off the vehicle loan a couple weeks ago & couldn’t feel more blessed & relieved.

1) Pay off vehicle loan by August 2017

DONE ✅

2) Change husband’s 401k contributions from 8% to 10%. Mine is currently at 10%.

-Working on it!

3) Then slowly increase both of our 401k contributions to 13%.

-Plan: over next couple months increase both contributions to 13% (hopefully we meet this goal by the end of May). We have changed our original goal from 15% to 13% because we are looking to funnel more money into paying off the mortgage faster. We are giving ourselves permission to change our minds in the future if this isn’t working.

4) Start paying down our mortgage faster so that we can be totally DEBT FREE! Currently we purchased a home Sept 2015 on a 15 year mortgage so we have approx. 13 1/2 years left!

~Rachel

Feb 2017 Financial Update

~Every time you borrow money, you’re robbing your future self~

The month started out well with no non-necessity spending until around the 15th of the month. Then we traveled to Minneapolis for a doctors appointment & along came with was one night in a hotel, meals out & one trip to a home store. We were thoughtful of our purchases & considering didn’t spend a ton. We had a good time though & made it into a little winter getaway 🙂 I’m learning to balance saving & enjoying life too!

1) Pay off vehicle loan by August 2017.

Balance of loan Oct 2016 $4860
Feb 1,2017 $3150

March 1, 2017 $2340

Husband “found” $400 this month…he intended to deposit a couple checks a while back & found it in between his car seats. Happy Day it was! 🙂

I am SO excited to share that we will crush the original goal of August 2017!!! New planned payoff will be at the end of March! Waiting for our tax refund & looking forward to being debt free excluding mortgage.

Steps 2-4 will be completed after the vehicle loan is paid off.

2) Change husband’s 401k contributions from 8% to 10%. Mine is currently at 10%.

3) Then slowly increase both of our 401k contributions to 15%.

4) Start paying down our mortgage faster so that we can be totally DEBT FREE! Currently we purchased a home Sept 2015 on a 15 year mortgage so we have approx. 13 1/2 years left!

~Rachel

Jan 2017 Financial Update

~If you wait for perfect conditions, you’ll never get anything done~

Unfortunately this last month I was diagnosed with a health condition so there were several copays & one medical bill that was due that derailed the month a little.  Good news is that I’m doing just fine & we were able to fit the unexpected expenses into the budget without going over 🙂 Since insurance can take some time to process there will be more bills to come. However, we are taking it month by month.

Side note: Our family has been using EveryDollar for 6 + months to budget & I am enjoying the ease of keeping up with inputting receipts, income, etc. In the past I would use a spreadsheet but it got to be too time consuming to do it daily. Now I use the app on my phone whenever I make a purchase. I’m sure there are other apps that work just as well, it’s just what I use (husband still has me enter his receipts) 😉🤔

January we took part in our first No Spend Challenge month. Thank goodness for that! I will put up a separate blog post about the challenge & share what we learned.

1) Pay off vehicle loan by August 2017. We just recently started attacking this debt.

• Balance of loan Oct 2016 $4860
• Feb 1,2017 $3150
• We were able to make an additional $250 payment due to the No Spend Challenge!

Steps 2-4 will be completed after the vehicle loan is paid off. 

2) Change husband’s 401k contributions from 8% to 10%. Mine is currently at 10%.

3) Then slowly increase both of our 401k contributions to 15%.

4) Start paying down our mortgage faster so that we can be totally DEBT FREE! Currently we purchased a home Sept 2015 on a 15 year mortgage so we have approx. 13 1/2 years left!

~Rachel~