Tag Archives: saving

Week 70: No House Payment in March!

Monday, 26 February 2018

As you can see from the above, we have a small house (just kidding)!

Not having a house payment for the month of March (along with a bonus and pay raises) gives us enough money to pay off $4000 in bills!  That is a great feeling.  As well, we met with the accountant last Friday to do state and federal taxes – a refund from the feds, and a small amount to the state.  Unfortunately, the Republican revisions to the tax code will cause an increase in our taxes for 2018.

Besides being able to pay off some debt – and eliminate two bills altogether – our refinance and pay raises will be increasing our monthly income.  Out of this, we plan to increase our monthly savings, and use 25% of that as regular monthly investments in stocks or mutual funds, with a focus on dividend-producing stocks.  We want to have a bigger emergency fund, as well as cash on hand, to pay insurance payments every 6 months, instead of every month.  Even better, we will be able to remove the 18 trees in our yard, without financial stress, over the next 3 – 4 months.  Firewood, anyone?

Even though we still will have debt, the increased capital will allow a payoff of another debt in July 2018, another in April 2019, and another in August 2019.  From there, The Student’s school loans will be paid off in May 2021.  If we wish, we could have the house paid off in February 2029.  From start in January 2016 to May 2021, we will have been on this journey for 5 years and 5 months, paying off everything except the house in this time period.  Longer than what Dave Ramsey suggests, but better than we ever thought possible.

Refinancing the house is allowing us to speed up our debt reduction schedule significantly.  It is one of the best financial choices we have made.



Monday 113: Carrots & Sticks

Monday, 8 May 2017

Motivation comes from the potential of a reward, or the threat of punishment.  Sometimes the latter has a more immediate effect, but the former has, I would think, better long-term effects.

With the desire to retire getting stronger – especially as I find myself more excited about my daily life – it is so easy to want immediate gratification than stay the course to debt reduction and increased financial independence.  At times, this endurance becomes tiresome.  Where is the pleasure in life without new things?  What, no fun?  It really shows how far we have yet to go in changing our mindsets, but astonishingly, we are getting there.  Slowly.

Here is an example:  the other day, we were both getting over physical ailments, like stomach upsets and migraine-like headaches.  Just the thought of cooking felt exhausting.  I suggested sending out for pizza.  Mr. 182 said,

“Since we are trying to cut back on spending money, let’s just do grilled chicken.”

Not wanting to ruin the moment, with my usual sarcastic humor (sarcastic to others, humorous to me), I simply agreed.  Inside, I was thrilled as he became a bit of a carrot for me!

What is a motivating factor?  Sometimes it has to be a short-term motivator, and sometimes it has to be a long-term motivator.  Saving money by grilling chicken was an immediate solution to a presenting problem.  But, there are times when the long-term has lost its appeal simply because it l-l-o-o-n-n-g-g.

Short-term appeal sometimes is the better motivator.  For instance, I wrote a bit back about wanting to increase our savings to $2,000.00 / month.  This means that debt reduction will slow down.  There are two reasons for this decision.  The first, and true short-term motivator, is our planned vacation in the first few weeks of next August.  It is an important vacation as we are traveling with Mr. 182’s parents on a somewhat historical family road trip.  I want to have more than enough money for it, and be able to come home without a big dent in our savings plan.  The second reason is the unspoken one:  I want us to quit spending extra money even more than before!  We need to (keep) get(ting) our thrift on.

Additionally, this month, we have a potential $1000.00 car repair, for which we have planned and saved.  After this car repair, we have no other scheduled “big” payments, such as insurance or taxes, until next December.  I would like to see our savings account better equipped to handle these expenses than in the past, which, by the way, have improved from 2016.  I’d like them to be even better than they were in 2017 for 2018, and so on.

When motivation wanes, it has to be re-stimulated.  Focus needs to be refocused.  Finding new ways to stay focused is creative, and necessary, because the road ahead for us is a long slog.

Our habits of years are still struggling to dominate, and perhaps spending is our addiction.  Perhaps that addiction “gene” is not one that is gonna ever go away.  Controlling it may be all we can hope to do, which may sound defeatist, but that may be our reality.

We have to acknowledge our desire to spend much as an alcoholic has to admit to being an alcoholic to get onto the path, straight and narrow as it may be, as restricting and unpleasant as it may be, as challenging as it may be.  We are our own worst enemies, and our own salvation.

Monday 182: Paying Yourself

Monday, 4 January 2016

I set up automatic transfers from our checking to our savings account, beginning this month.  These transfers will come out on the 1st and the 16th, one day after payday. The monthly total will be 1000.00 per month, which is a fairly substantial part of our monthly income.  This money is hopefully off limits altogether, though it is also there for emergencies.

Our checking account will be used to save for things like property taxes (due in December and in April), paying the accountant in February, paying possible federal and / or state income taxes, and some recent unexpected medical bills.  Thank goodness for health insurance and low deductibles and copays!

“Piggy Bank” by GeorgHH. Licensed under Public Domain via Wikimedia Commons.

Paying yourself is really hard to do.  That means you have to save money, and not spend it frivolously.  This means keep cash in the bank, have money for emergencies, and, when possible, use it to buy funds or stocks.   All these are investments in yourself.

The fact is, many of us don’t believe we are worth these kinds of investment.  Money is something not to be discussed. I think sex is probably more readily discussed than the way we spend our cash.  I know when I was a kid, money was the most forbidden topic in the household – it was off limits, period.  Adults talked about money, in secret, away from children, and children remained children even as they moved into their 50s or 60s!  Kind of weird, but that may be the way an older generation was.

$1000.00 a month will be 12,000.00 by December 2016.  Let’s track this puppy!  And, ya know, it feels really, really good to be making this commitment to saving.