Financial Progress Report
At the beginning of our financial journey, it definitely felt like we had a long way to go. Our budget was a mess because it was a new concept to us (neither of us had ever created one before) and we had to work together on it. On top of that, we had nearly $40,000 of debt and weren't sure how we were going to pay it all off. I've written about that process that we eventually adapted to get our debt cleaned up and move on to other major financial milestones like having an emergency fund of six months worth of expenses, ramping up our retirement investing, and starting a college fund for Rooney. Our budget has become a habit and way of life (thank goodness).
We're now in the midst of a major renovation in our basement and throwing as much money at that project as possible. Kelsey often says, "We don't have any money!" Translation: We don't have enough money to do all of the things we want to RIGHT NOW. We still struggle with this. On one hand, we have made a lot of sacrifices to get where we are, and it's taken a lot of discipline. But some of the most important things we are doing financially are kind of set on autopilot and they suck up much of our monthly income (retirement and college savings), leaving us wondering where all of our hard-earned dollars have gone.
And on the other hand, we've come so far in our quest to understand our finances and to steward our money well. And that's what I want to share today. Not in a bragging way, but in a "Let's remember what we've done and be grateful for where we are" kind of a way.
So let's stroll down memory lane and see what we've accomplished in the last four years. The progress bars are in percentages of the goal that is complete. (Update: technical difficulties with some of the green bars, they look great on a desktop computer, but not so much on a phone. I've added the descriptions below the bars as well, so you can actually read them)
[rprogress value=100 text="100% Paid off our consumer debt (except for the house)"]
100% Paid off our consumer debt (except for the house)
We did this in 23 months. It went quicker than we had planned. The more we focused on it, the quicker we killed it.
[rprogress value=100 text="100% Saved six months of expenses in an emergency fund"]
100% Saved six months of expenses in an emergency fund
Our emergency fund would cover us for six months if we both lost all of our income.
[rprogress value=100 text="100% 401K maximum employer match"]
100% 401K maximum employer match
Both of our employers do a match: If we put in 5% of our income, they match 100% for the first 3% and 50% for the next 2%. Another way to say it is that if we put in 5%, they will match it with 4%. (It can get confusing.)
[rprogress value=80 text="80% Investing into additional Roth IRAs"]
80% Investing into additional Roth IRAs
I say this because we'd like to retire early and that would mean we need to contribute more to our retirement than we currently are.
[rprogress value=65 text="65% Contributing to Rooney's college fund"]
65% Contributing to Rooney's college fund
While we would love to be able to pay for Rooney's entire college experience, we're not currently contributing enough to do that. She's get as much as we can give her when the time comes, but she may have to find alternative ways to pay for college.
[rprogress value=43.65 text="43.65% Finish our basement"]
43.65% Finish our basement
[rprogress value=30.5 text="30.5% Pay off the mortgage"]
30.5% Pay off the mortgage
There will be a happy dance when this day comes. But it's on the back burner until we get our basement finished. Then the extra scratch will be thrown at the mortgage until it's gone.
[rprogress value=28 text="10%+ Build wealth and give"]
10%+ Build wealth and give
I've seen a few stories of people who increase their percentage of giving every year. That is amazing and really cool. Not something we're currently focused on, but would be fun to do someday. Currently, we tithe, sponsor a child, and give in other ways as needs arise.
Budgeting is a lifetime sport. Sure, we've taken care of our debts and live somewhat comfortably right now. We don't have a vision for living in extreme luxury ever, but we also have realized an important lesson since paying off our debts.
A lack of focus results in throwing money away. Both in the short-term and long-term. We celebrated a little too long after paying off our debts and funding our emergency fund. I wouldn't say I would go back and change anything, but it was an important lesson we learned. We're ultra-aware of the need to stay on top of our budget on a monthly basis and to continue to strive toward our bigger financial goals and milestones. When we don't is often when our money seems to spring a leak.
So, we're intentionally trying to save and finish our basement so that we can move on toward paying off our mortgage. And managing the transition between the two goals will be help to keep our momentum rolling. It's not a bad thing to take a breather every once and a while as long as it's intentional and we make a plan to work toward another goal.
What important lessons have you learned in your financial journey? What works best for you when working toward your goals?