Finishing the Basement: Budget and Savings Goal Update
It's been awhile since we've talked about the budget side of finishing our basement. A month ago, we launched a home projects blog called The Rockstar Ranch and it's where we're talking about home projects we're working on. Our hope is to keep Words of Williams more family, marriage, parenting and money focused. But, it would be silly not to talk about the budget side of the projects. Finishing a basement is going to take some serious capital, and it's our goal to save up for it and pay as we go.
Quick Recap of Our Journey
In case you're new, we've put this project off for years because of the financial situation we were in and also because we really didn't need the space in our basement.
- We paid off all of our debts (except for our mortgage).
- We built an emergency fund of six months worth of expenses.
- We maxed out our 401(k)s at work and are contributing to individual ROTH IRAs monthly.
- We started a college fund for Rooney and are contributing monthly.
We've followed Dave Ramsey's plan pretty closely, and have decided that before we start trying to pay off our mortgage (the next big step), we'd like to increase the space and value in our home by finishing the basement. We don't have any current plans of moving in the foreseeable future, so we're turning our 1,200 square foot empty ranch basement into living space that we can enjoy.
When we started talking seriously about finishing the basement, we knew the first thing we needed to do was to get serious about saving for the project. Below shows what we've saved so far and what we've spent. The goal (nice round number) was to save $10,000 and see how far that got us. We're hoping this will cover building materials and furnishing (the illustration below shows percentages).
And let me state that while we budget, this doesn't mean that we are frugal. Being frugal is hard for us. We try to be savvy shoppers, but ultimately, we'll pay more for something if it's what we really want.
[ultimatetables 6 /]
You'll see in our latest post on The Rockstar Ranch that we've decided to paint our upstairs white. We used money we had saved for the basement to do that.
How We've Saved the Money
We've been budgeting long enough that our monthly budget is pretty steady (doesn't fluctuate a whole lot from month to month). We've gotten comfortable living within our means and have automated as many things as we can to help keep on track financially.
I think the thing that helps us save the most money is having a goal. Agreeing on the one thing we want to spend all of our extra money on has helped keep us focused on saving as much as we can every month.
We're certainly not perfect, and there are a lot of areas we could cut our expenses if we had to. Again, we were once frugal, but that doesn't come naturally to us.
Keeping focused on the goal makes it easy for us to get excited about using an extra paycheck to boost our basement fund. Perhaps the one thing we do that helps increase our extra cash flow at the end of the month is how we handle our financial forecast for the year. We used a bonus and an extra paycheck in January to help fund most of our forecasted items already.
This leaves us with extra money to save toward our basement on a monthly basis. We could have flipped that around and saved the lump sum for the basement, but let's face it, savings for the little things every month is not near as fun as saving up to finish our basement.
What's your big financial goal that's got your focus right now?
P.S. The Rockstar Ranch blogging schedule is very sporatic! We have no posting schedule. As you can imagine with a toddler, two other blogs, and full-time jobs, we post when we can. If you don't want to miss a post, I suggest signing up to get posts in your inbox (you can do that in the right hand column).