The financial goals thread got me thinking. How do you plan to reach your goals this year? We built our first house, so need to rebuild savings from the down payment. I qualify for the loan forgiveness program now that we've had our first LO, so my law school loans will be forgiven after 8 more years or so. My payment has also gone down. We just want to save, start LO college fund. We bought YNAB last year, and DH found it too complicated. He's an accountant/auditor and prefers his excel spreadsheet. I don't do spreadsheets, so plan to get the new online version!
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Well, since we didn't win the Powerball, I guess we'll just have to cut back on going out to lunch. That seems to be the biggest drain on our money, and also the easiest way to cut back. That alone will save us close to $300 per month ($3,600 per year).
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We have YNAB and that has been a huge help seeing where our money goes (I'm an accountant too and I love it! So much easier than my complicated spreadsheets and it's also helped us save). I started a new job last year that had a decent raise, so we are putting all that towards our debt. I'm hoping to be completely debt free by the end of the year! Eating out is a huge expense, I'm not eating out for lunch anymore and we are cutting back how often we eat take out for dinner. Helps with our need to lose weight too!
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I don't "budget" every month, but I do set monthly goal at the beginning of the month. I write them down and keep them in my checkbook. I review them each time I balance my check book (which is usually each time we get paid - every Friday) to make sure we are staying on track. I check off each goal as we reach it throughout the month.
I also have spreadsheets with graphs. Most of my goals are focused around paying off my remaining debts (my student loans and house). I LOVE watching the graphs go down! I'm a huge number/spreadsheet nerd.
We also have $50 pulled from each of my paychecks and hidden away at the credit union through my work. We never really miss it (it's only $1,300 each year), but it's nice to know that it is there if something ever comes up. Then again, last year the thing that "came up" was that we bought a boat..... opps.
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I guess for us, its about tightening back up. We were incredibly frugal the first 3 years of our marriage (or basically until our son was born) and lived in a really dumpy rental, drove paid off older cars, couponed, meal-planned, packed lunches, and paid off A LOT of student loans. All in all, I think we were living on about 30% of our take-home pay.
After our son was born, we just had a lot of personal and family situations that required most of our spare resources. Luckily having always lived on so little, we had the ability to meet those challenges, but our expenses did go up with a baby (and now another due in May), so it didn't allow us to pay as aggressively towards our student loans as we'd like. Plus I took a 50% pay cut once I went back to work by scaling back to half-time.
So this year will be about tightening back up in a way that accommodates our children and our sanity while allowing us to make more modest progress on our loans. I can't make everything from scratch anymore, we have to account for babysitters and daycare expenses, etc.
We're starting January by working on our pantry challenge (i.e. trying to use up all the food in our pantry and freezer and menu plan around that), which always saves us a lot of money. Ditto on packing lunches and snacks from home more consistently. We're not planning on taking any fun vacations this year with the new baby, so that should save us some money and we have all year to budget for Christmas travel (its our year to see the ILs and we have to buy a seat for DS).
Luckily LO2 will be a boy, so we will just reuse all of DS' stuff. I couponed a lot for diapers last time, so hopefully I can do that and choose a diaper shower in lieu of a "stuff" shower this time.
DH and I had a weekly date night after DS was born, but it will be trickier with a new baby, so that will probably save us money the second half of the year. We will do a weekly lunch date until DS2 is born while DS is at daycare (still cheaper than dinner!) and once DS2 is on a more consistent sleep schedule, we can plan on at-home dates.
We will transition DS1 to a 2's preschool program in September, which will save us about $350 a month the last quarter of the year. Buying a house will give us some tax savings this year and we're in talks with our accountant to restructure our business to open up some more tax-friendly options.
The second prong is just increasing our income. I will be on unpaid leave the second half of the year, so DH has to make more money! He will get a raise for next school year (he's a college professor), so that's great. We also started making some significant investments in DH's law practice last quarter (updating his website, hiring a web marketing team, increasing his social media presence, etc.) with the goal of increasing business and ramping up our income more. Again, we're trying to do it in a sane way - making DH busier with a newborn coming into the picture isn't going to make us any happier - so we chose a more modest marketing and growth strategy so that we can keep up the quality of the work and the quality of our family time. So far, we've been pleased with the amount of increased business coming in and its been manageable.
My student loans should be paid off this month or next month, which is exciting. We'll roll the payment over to DH's loans with the goal of getting his down to 5 digits by the end of the year (2 sets of law school loans, sigh).
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@dc yoga bee: how did you qualify for the forgiveness program after having an LO? Do you work for the state?
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@dc yoga bee: can you tell me more about the loan forgiveness program?
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Stop unnecessary shopping!!
Amazon and Target are huge money drains for me!
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The big thing we are working on is eating out less. We probably spent at least $100 a week eating out last year, plus we bought groceries. So this year, we are cooking more, packing lunches, and trying to use up everything we buy for the week.
I plan on calling our cable company and trying to work out a smaller cable pricing or cancel it altogether. Our cable/internet bill is close to $130 and we pay a bit more just so we can watch TBS (literally the ONLY channel we watch in the higher bracket). Other than that, it's just going to be a lot of belt tightening.
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@gingerbebe: We're doing an "eat from the pantry" month too! We have so much food in our chest freezer and pantry. My ambitious goal is to only spend $25 on groceries next week for things like milk, eggs, and fresh fruit.
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YNAB. I'm going to shop around for homeowners insurance quotes, too.
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We are putting "extra" money into savings, and going to try and save a few nights worth of tips from DH's 3rd job. Not eating out much, which we rarely do anyway...
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Food costs, for one. I was actually surprised when I graphed my "work lunches" in Mint that it wasn't as much as I'd have thought, but it was still a lot. And I need to make better choices at the grocery store, work at getting things on sale and storing/freezing them, and using up the food we already have.
With any luck, DD will be potty-trained in the next few months and we'll be able to cut diapers from the budget.
I'm looking into new cell phone plans and just need to pick one...that will probably save me $15-20/month.
Other than that, there isn't much I can pinpoint except just generally being more mindful about what we buy. We can't do a whole lot about the mortgage or daycare costs, which are our biggest expenses. I'd love to get rid of cable but I'm not sure I could get DH on board and we'd still have to pay for internet so the savings would actually be minimal (no high-speed options except Comcast in my neighborhood
). We could "spend to save" by updating some appliances to more efficient ones (particularly our fridge and washer) but they still work fine even though they take more energy so I have a hard time justifying it.
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(how do you qualify for loan forgiveness??) @dc yoga bee:
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This month we're tracking everything we spend so I can show concrete proof to SO how much we actually spend. And then, of course, we'll follow through with cutting back and being more disciplined with paying down debt.
I'm also thinking seriously about switching to cloth, but pretty sure we won't see a savings there since the money will be going to expensive formula instead
ETA: I also have to stop buying Tulas, but that's not so hard because the dollar is just atrocious.
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@lawbee11: That's a good idea! I got my auto requoted, but I need to ask about a requote for my homeowner's insurance.
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Definitely food. Less eating out. More pantry eating (and meal planning).
I'm also trying to reduce unnecessary spending. It's SO hard.
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@PurplePeony: We get just Internet (used to be Comcast, now its AT&T U-Verse) and pay for Hulu, Netflix, and an annual NHL package and it saves us so much money! We even get the more expensive high speed Internet since DH works from home most of the time. Before when we had a traditional cable/internet/VOIP bundle (the phone line just came with it), we sorta had to get a DVR too since we weren't ever around to watch anything live, and it was like $180 a month! Now we spend about $100 total. I go back and forth on Netflix (we didn't have it for over a year, and then just put it back on recently), so that fluctuates, but we just use our Apple TV (that we got as a gift) and that's plenty for us!
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@hellobeeboston: @littlejoy: @regberadaisy:
https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service
State, federal, non-profit work (basically public service,) and a qualifying income based repayment plan. So, I didn't qualify for the IBR plan when it was just DH and I. Now, having the dependent allowed me to qualify because I have a dependent, and I have less take home income (we do $5000 DFSA.) Work for 10 years, don't miss a payment, and the balance forgiven after ten years. The majority of your payments have to be IBR, and I think I've been paying for exactly 2yrs, maybe 2.5.
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We paid off all our consumer debt in 2014, and saved up a huge emergency fund in 2015. Our plan in 2016 is to FINALLY start really increasing our investing (in particular, retirement savings and starting our LOs college fund).
I'm so happy to work on this this year! We'll also be sending any unexpected windfalls to paying off our mortgage, which we hope to do within the next 10 years.
ETA: To actually answer the question, we are just funneling the same funds we used for debt payoff and emergency fund savings towards our new goals. We're always trying to figure out a way to get our expenses lower and our income higher, so hopefully that little set of funds continues to grows over time
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@DillonLion: I met with the financial planner this morning about the house. We built, but we plan to buy our forever home in 5-6 years. So, at first I didn't see the point of paying extra to the principal if we are moving. But, now I see that helps equity, as well as interest! We put a contract on the house in June, and by the time we closed at thanksgiving time, the house appraised for $14K more! Now, I'm motivated to actually pay more towards the principal!!
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@dc yoga bee: Heck yeah! This isn't our forever/last home, but we've made a pact that its our LAST mortgage. We plan to pay cash for any houses we buy in the future, which a large portion of that will be equity from the house we sell.
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