Big, Scary 2018 Financial Goal UPDATE

About thirteen months ago, I posted about our Big, Scary 2018 Financial Goal. You might want to read that post first so you can see what we wanted to achieve.

As promised, here is my update: We were able to achieve about 1/3 of our goal!

Not perfect, not 100% but I am still so excited about the progress we made on our home mortgage.

This past year was a very expensive medical bill year for us (nearly $8,000 in medical bills have been paid in CASH by our family) Mark has also changed jobs which has affected our income and his part time work. Despite these changes we have remained committed to not taking out credit cards or loans and editing our finances to pay cash for all that we want/need.

If you read the comments on that original post, my wise friend Abbi wrote: "I am excited for you making this goal. I think it is great to stretch ourselves but then also be able to give ourselves grace should something come up that causes it not to work out." I have held on to that advice many times this year as our money wasn't able to go where we wanted it to go. 

Were we 100% committed to only achieving this goal? Absolutely not. We still ate out, we still did some little trips, we still had extras. Could we have been more committed? Absolutely! Will we keep working on it in 2019 ? YOU BET!

We have now been in our home 5.5 years and very much dream of having it paid off in the first 15 years that we are in it! We cannot wait to "owe no man anything but love"

What were your 2018 financial goals? How did you do on them? What are your goals for 2019?

Big, Scary 2018 Financial Goal

When Mark and I first married, he was 21 and I was 22. I was one year out of college and he was about 2 weeks out of college. We were young and living on love...and nearly $25,000 in student loan debt.

We made a plan, a firm plan, and we rocked it! Less than 2.5 years later we had paid off ALL of our student loans and purchased our first house. Here is my 7 Days of Dave series that gives the details.  We bought our current home in 2013 and we did a 30 year-mortgage because I was not working at all and we feared the bigger payment with a 15 year mortgage. We did verbally commit to each other that we wanted to shoot for that 15 year mark! Well, 4.5 years have gone by and we have not made many significant strides on our mortgage beyond our monthly payments. We have no new debt and have purchased different vehicles, two washing machines, a dishwasher, and spent nearly $15,000 in medical bills. We are happy that we are still debt free and that we have adjusted our budget time and time again to stay debt-free.

Last summer, when I started with Usborne Books & More my initial goal was that my paychecks would just go to put money on the principal of our mortgage. Then we had four eye exams, three ER visits, a flooded kitchen, a new dishwasher, an immediate care visit. My book money covered 80% of that! I still haven't made an extra payment on our house BUT we were able to cover so many things without even touching our savings!

But...

A few months ago a certain number kept popping in my head. Over and over again. I started seeing it in my dreams. I would think of it 10-15 times a day. I began praying on it and the more I prayed the more it felt like where God was leading me.

Over the weekend, I read Money Problems, Marriage Solutions by Chuck and Ann Bentley. I won this book on my blog friend Abbi's blog - Proverbs 31 Living (If you love homemaking, homesteading, homeschooling, blogs hers is one to follow! I have been reading and enjoying her blog for years now!) Thank you Abbi for this great book!

Last night, Mark was out helping a friend move and the kids were in bed so I wrote the number down. I spent about 30 minutes doing math and figuring out how to get what we owe on our house down to that number. My goal date is 12.31.18. Poor Mark came home and I said, "Guess what I want to do next year?!"

The goal feels scary - we'll be making almost a double payment every month (with the second, extra going to the principal) but with book money and extra money from babysitting, sales, etc it's totally do-able!
The goal feels uncomfortable - we are going to have to edit some parts of how we live. We're going to have to choose the house money over pizza money. We're going to have to go without a few of our fun purchases.
The goal feels like a stretch - while it's completely attainable with dedication we haven't made a goal this big since I was working part-time.

We will not compromise:
Our health - we will continue to go to all medical and dental appointments. We will also continue to buy fresh fruits/veggies and organic meats.
The children's education - if it is something they need for learning we will continue to give them 100% of those experiences.

We will compromise:
Our fun stuff. Maybe we don't need every camping item or pair of shoes that we love.
Eating-out. We are working every month to get better and better about not relying on conveniences like a quick meal out.

I do not plan on making this into a series but just wanted to share this here as an encouragement to others. I do plan to update a couple of times over the course of next year and will update at the end of next December to let you know how we achieved this goal!
What big financial goal can you make for your 2018? What debt can you eliminate?

Join us as we prayerfully strive to, "owe no man anything but love." Romans 13:8 

7 Days of Dave: Day 7

Welcome Back to our "7 Days of Dave" Series! It is Day 7 our last day.

Baby Step 7: Build Wealth and Give

By the time we have all reached Baby Step 7 we will be completely debt free including no mortgage payments! What a wonderful day that will be!

Step 7 is about building wealth for the future generations of our family and giving to our church and favorite charities. Dave really stresses the importance of saving for children, allowing them financial support and help even after you are gone. We have been truly blessed with help from our families and want to make sure that we are able to do the same for Annabeth. We are blessed by the fact that we still have all four of our parents and even some of our grandparents but in case we pass early in life, we want to make sure that Annabeth will have the financial backing that she needs.

Baby Step 7 is also about giving to others. What is the point of having money if you aren't sharing it? In our minds, none. Even through the other baby steps we have chosen to give to our church and organizations that we believe in. While it is God's Will for people to be debt free ("Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law." Romans 13:8 (NIV)) it is also His Will that we would give to others. "In everything I did, I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus himself said: 'It is more blessed to give than to receive.' " Acts 20:35 (NIV) We live by the Bible and believe it to be entirely true. We do not believe that one can pick and choose verses and thus we believe that debt free living and radical generosity are not "suggestions" or "nice ideas" or a "goal for someday" but rather they are what God expects us to be doing. 

While we have loved our journey with Dave Ramsey through his 7 Baby Steps as well as his books, our real journey is with the Lord. We strive to know Him better and to serve Him better. If you have further financial questions, Dave questions, or questions about what we believe/why we believe PLEASE leave them in the comments and we will get back with you.

Dear Readers, we are praying for you. Even without knowing your names or reasons for reading our 7 Days of Dave Series we are praying for you and for financial freedom for yourself and your family. We are also praying that each of you will grow in your walk with the Lord, realizing that all Good things come from Him. God Bless! 

Our Family.

We are so thankful that all of you read our little blog

and we pray daily for all of you! 

7 Days of Dave: Day 6

Welcome Back to our 7 Days of Dave Series - It's Day 6!

Baby Step 6: Pay Off Your House Early 

We purchased our second house, our hopefully "forever" house April 19, 2013. We purchased it with a 30 year mortgage so in 2043 it will be paid off. However, in that time we will end up paying for the house nearly two times thanks to interest rates! Eep! That doesn't sound very good. Our current goal is to try to pay it off in 20 years or less instead of the full 30.

At the moment, our family income is below $40,000 and that is with Mark's full-time job, overtime, and part-time job. I say this only to illustrate the fact that we are not earning $60,000+ a year or something. We are a middle-class family with one income and mediocore health insurance.

I will admit that in the first year that we have been here we have not made any extra payments on our mortgage. After paying two mortgages and two sets of utilities last spring while we were living at the old house and renovating this one, we had some work to do rebuilding our savings before we could begin paying extra on this house.

We also do not want to take money away from Annabeth's life right now. I know, I know, life is not just right now but choosing between Annabeth taking dance class or $40 extra on our mortgage we are choosing dance class. In the near future, we want to work to really begin putting extra down on our mortgage.

On thing we have discussed doing is putting an extra $112 a month on our principal each month. That would mean every six months we would really be paying seven months of mortgage payments. That translates to 14 monthly payments a year and every six years we would be making seven years worth of payments.

I think it is just like the debt snowball step, it really will be a matter of putting everything extra into our principal balance. That could include Christmas and birthday money as well as our tax return. Also, we could add money I earn from card/craft sales, consigning, and garage sales.

This step, our current step, is one that we really want to begin focusing on now that we have been in the new house one year. We look forward to the day that we own our house outright! What a day that will be!

Annabeth in front of her second house and hopefully our forever house!

7 Days of Dave: Day 5

Welcome Back! It's Day 5 in our Seven Days of Dave Series.

Baby Step 5: College Funding for Your Children 

529.**

If you have a child, go open a 529. This is the absolute best thing you can do for your child. It is a college-savings plan that has a great interest rate and is tax-free. Do it now! Go!

My grandparents opened 529s for us grandchildren right when they first came out. I was able to earn quite a bit of scholarship money and by finishing my degree in three years, I left UofL with quite a bit still left in my account. When we found out Annabeth was coming, we started adding to it again.

The night of my high school graduation.

18 and ready to see/take on the world!

When friends and family ask what Annabeth would like for her birthday or Christmas we happily reply "College money!" A few times a year we add money to her 529. While the cost of college is steadily rising, we know that every penny saved is one less penny that she will have to earn through scholarships or grants.

Mark graduated college with a great deal of loans and while we grew and learned a lot from paying them off, we would really like for Annabeth not to have that experience.

Money added to a 529 can only be used for post-secondary education and related costs (housing, textbooks, fees, etc) so we also made sure to open a seperate savings account. We add money to that account each month with the hopes of buying her first car or helping her make a down payment on her first house. We use extra money that I make from garage sales and consignment sales along with a designated portion of each of Mark's paychecks.

We set a certain goal for ourselves of what we wanted to have saved by her high school graduation. We tried to make it an amount that we really feel will help her without bankrupting us in the present. Also, we obviously, have an advantage over parents of multiple children in that we have just one college education to save for. One of the many joys of raising an Only.

See you tomorrow for Baby Step 6!

**This is my own advice, not Dave's. I am not a financial planner, I just believe this to truly be the best deal going!

7 Days of Dave: Day 4

Welcome Back to our Seven Days of Dave Series! It's Day 4 and Baby Step 4!

Baby Step 4: Invest 15% of your income into Roth IRAs and tax advantaged retirement accounts

When I was 18, my grandparents helped me start my Roth IRA. During my college years, they added to my IRA, matching the amount that I earned working each year. At that time the maximum yearly deposit was $4,000 but you also had to make more than that to contribute that much. As I was working part-time at school and summers at camp, I never had that kind of income but we added as much as we could. I continued adding the maximum amount each year through 2011 when I left working outside the home to stay home with Annabeth.

Mark is blessed with a job in the public sector which means that he puts money into retirement two different ways. First, his job comes with pension after a required number of years of service and successful retirement. Mark also adds to a retirement fund through P.E.R.F. (Public Employees Retirement Fund).

Why does Dave say 15%?

At this point, people working through Dave's steps are debt free, minus the cost of where they live. Thus, they should begin looking to invest their income to grow their wealth. Too many people live in a "right now" frame of mind. That is all well and good right now, however, at some point we all will want to retire! And to retire, you have to have money. 15% is a fair amount because it is enough to really amount to something over the years. However, it leaves plenty to live modestly in the moment and work on Baby Step 5 which is "College Funding for Children." Dave discusses the fact that a lot of parents tend to want to save every extra penny for college but he argues that children can earn scholarships to help parents pay for school and that their degrees will not pay for the parents' retirement.

On our honeymoon, enjoying a day at Honeymoon Island

June 2009

We hope to enjoy retirement traveling as well!

Why is this important to us?

Although there are times when we would love to take a big vacation every year or own more than one car or do fun projects on the house, we really see the value in being able to retire comfortably. We would like to retire and travel, to have lots of time to spend with Annabeth, and maybe even grandchildren some day.

We know that life is, probably, not just right now. We want to be prepared for the future.

Our favorite Dave quote is:
"Now you must live like no one else so later you can live like no one else."

Anytime one of us wants something big, that isn't a necessity and doesn't go along with saving for the future we remind ourselves that this is worth it. We don't have a $200,000 house or two cars or a vacation home or a boat or... But we do have a solid start on saving for our retirement which feels, at least to us, so much better.

We thank, praise, and give all credit to the Lord for providing our family with the paychecks that allow all of these financial decisions to be possible. To Him be ALL the glory.

See you tomorrow for Baby Step 5!

7 Days of Dave: Day 3

Welcome Back! It's Day 3 in our "7 Days of Dave" series.

Today we will be looking at Baby Step 2: Pay off all debt using the debt snowball
What does that mean?
Make a list of your debts (excluding your mortgage or rent payment) from smallest to largest payoff amounts. The smallest will be your first priority.

Here is a breakdown of our loans:

Loan 1: $3,500
Loan 2: $7,500
Loan 3: $12,500
Total Loans: $23,500

Loan 1 began billing us within 6 weeks of Mark's graduation. Because we had wedding money and enough money in our "3-6 Months Emergency Fund" we decided to pay that loan off in full. It had a very high interest rate and we really wanted to just focus on the others. Paid in Full: June 2009.

From there we began paying the monthly minimum on Loan 3 ($120.00) and making as large of a payment as possible on Loan 2. Some months we were only able to double the monthly payment on this loan but others (if I subbed a lot or during the hoidays/birthdays) we were able to sometimes pay as much as $1,000 a month on this loan. Paid in full: May 12, 2010.

Down to just that last big one! Because we had only been paying the minimum we had a great deal left. During this time, Mark used one paycheck to make our house payment ($561.00) and the other to pay entirely on the student loan. I used one paycheck to cover all of our utilities and groceries and the other to pay entirely on the student loan. I will say that once we were down to this one loan we did to choose to loosen up a bit. We began to eat out occasionally and even took a short trip to Georgia the summer of 2010 to visit family. However, in January 2011 when we learned we were expecting we knew we had to have the loan payed off before the baby came/I quit work to work at home. Less than 8 weeks before Annabeth was born we achieved our goal. Making that final loan payment phone call was one of the best days of our lives!
Paid in full: August 2011

Mark is listening to the automated system say 

"Loan is paid in full."

 "Now you must live like no one else 

so

later you can live like no one else."

Debt Free Rileys!

Why does Dave suggest to pay off smallest to largest?

The general idea is that small wins (ie paying off a loan) is a great motivator to keep going and working hard to achieve financial freedom. By trying to pay off the largest first, people have to wait longer, work longer, and may become frustrated or give up sooner. 

I will say that being able to work hard and pay off two loans in the first year of marriage was a great feeling! Yes, together, they equaled less than what we had left in Loan 3 but it still felt like a great accomplishment having two paid off!

This step (along with Step 7 - where we currently are) was, spiritually, the most important to us. As Bible believing Christians, we seek God's Will in all aspects of our lives and use the Bible as our handbook. In striving to be debt free we really sought to live out Romans 13:8 "Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law." (NIV)

Be sure to check out Dave's page on Baby Step 2.

Hope to see you tomorrow for Day 4 and Baby Step 4!

7 Days of Dave: Day 2

Welcome Back! It's Day 2 in my "7 Days of Dave" series.

Dave Ramsey's Baby Step 2 is to "Pay off all debt using the Debt Snowball" and Baby Step 3 is "3-6 Months of Living Expenses in Savings." We, unintentionally, switched these two items. As I wrote about yesterday, in the months leading into our marriage I was employed full-time and living with my parents with minimal living expenses. I set a a goal early on to save $15,000 by our wedding day. I was well on my way to that goal until I was laid off that February. However, by watching my spending and saving my earnings from babysitting and subbing we entered marriage with $12,000+ in our savings account. We also were able to add money thanks to our generous friends and family who attended our wedding. We quickly realized that based on our apartment rent, utilities, etc that we had more than six months of living expenses saved! :) Step 3 Complete.

 One of our first moments as Mr. and Mrs. inside Old North's Chapel where we were married
05.23.09

Mr. and Mrs. Riley
For better or worse, Richer or poorer
All the days of our lives.

We have worked continuously over the years to always keep that much in our savings. As each of our father's have been laid off during our marriage we have really seen the value of having a good savings built up. Because Mark works in Law Enforcement we often feel somewhat safer than families that work for less stable fields. However, we are aware that things can change in an instant. After Mark's knee injury in 2011 and following surgery in 2013, he was not able to work his part-time job. While we don't require that money to live it is the money that we do our fun and extra things with. We were so thankful that we had that money in savings and that we did not have to worry about him returning to work before he was fully healed.

I think for peace of mind, this is probably the most important step. Knowing that if someone in our family has surgery, has a serious medical issue, or if we have a huge incident with our house that we have the money to cover it. The few times we have dipped into this fund we have built it back up as quickly as possible afterwards.

See you tomorrow for Day 3 and Baby Step 2!

7 Days of Dave: Day 1

We are a Dave Ramsey family. We are currently on Step 6 of Dave's "7 Baby Steps." A friend and reader has asked me to share more about our Dave Journey so I will take the next 7 days to talk about what we have done and how we did it.

Here is a brief history of how we came to Dave and came into our marriage:

My dad gave me a Dave book during college. I kind of glanced through it but was not really in a financial peace state of mind, I just wanted to buy textbooks each semester with cash and not a credit card.

I graduated college in 2008, right as the bottom fell out of the market. Suddenly everyone was looking for a job. After about 2 months of searching, I was offered and accepted a position at Macy's selling Ladies Shoes. It was a humbling experience as I had worked three years at UofL to earn a degree and still ended up at the mall where my friends had worked in high school. But, Mark still had a year left at VU and we were to be married that next May just weeks after his graduation. We did not really have the time or the money for me to be picky. I also lived at home that year. I love my parents and after being away three full years for school and summers at camp it was nice to sleep in my old room. It also was the best financial decision as between work and seeing Mark I was rarely if ever home and an apartment would have been a waste of money. I was able to divide my paycheck via the online payment system. I put 85% of every paycheck directly into savings and kept just 15% as spending money. This was possible because I was living at home with minimal bills and because we were paid weekly. I started at Macy's in September of 2008 and worked full-time until the company underwent major cuts in early 2009. I was laid off in February 2009. I spent the next few months job hunting, babysitting, and subbing.

The weekend before our wedding, Mark's aunt found a temp job for him at her pharmacy. Mark quickly took it and we planned our move to Greenwood. We were married May 23, 2009. About a month later, Mark was hired on full time at our county jail and a month after that I was hired on for about 20 hours a week. I spent the next nine months also subbing and babysitting in addition to working at the jail. I was finally given 37.5 hours in March 2010 but it was not considered full-time so no insurance or paid time off. March 2011 I finally went full-time until September of 2011 when I left to stay home with Annabeth. We have been really blessed that although Mark has worked a lot of jobs and shifts for the Sheriff's Office that he has been continually employed full-time with them. Mark has also worked part-time security at a local hospital since September 2011.

August 2009 - Newlyweds at The Creation Museum 

Dave Ramsey's Baby Step 1: $1,000 to Start an Emergency Fund

We often say that we feel like we got to cheat on this one. Because I was working at Macy's and living at home I was able to save a great deal of money before we were married. We realize that couples who are in school and marry right after may not have that same luxury.

I think for me, the key was dividing my paycheck so that it automatically went into savings and checking. We still do that. Mark's paychecks are divided automatically between his checking, our savings, and Annabeth's savings. We never even miss the money we put into each savings because we don't have to take it out of his checking account.

We have found it SO important to maintain at least a $1,000 Emergency Fund. We have had to use our savings for house and medical emergencies in the past and we are always glad to have that money there.

See you tomorrow for Day 2!