With 2017 just days away, how are you getting yourself or your family off with the right financial game plan? These are a few of our financial goals for the next year. I hope they help inspire you to make small changes with big impact!
1. Update our budget.
I am a zero-based budget girl, which means that when incomes change and expenses change, so does our budget. A couple of years ago I updated our budget every month – but it became impossible to keep up with! Now, I’m making a general plan for the year, and I can update it when significant things happen. If we make a little extra or lose income, we adjust our expenses to get back to zero! (Okay, in our case I think we have ten dollars at the end, but that’s “wiggle room.”)
Bonus! You can look at my own zero-based budget template by following this link: https://docs.google.com/spreadsheets/d/1E4MWBflO6FqEigl6c0QbH7i7VNEJA8ejtZLWELlj0XA/edit?usp=sharing
Once you view the budget, copy and paste it to edit and make it your own!
2. Save at least $15,000.00 for a down payment on a house.
We really, really, really want a house. We like to set ambitious goals, so we have to work at them, you know? But first, we had to build up our emergency savings. This year, we established our emergency savings, and are on our way – thanks to an automatic savings plan and our increased budget – to making this home-ownership goal a reality. It will be a sacrifice, but we can do it!
If a house seems like a far-off dream to you, start with the basics from my post “3 Steps to Being Good With Money.”
3. Make regular contributions to our HSA.
We have had an HSA for the past couple of years, and I basically use it as a tax-deduction “funnel” for health care expenses. We don’t go to the doctor regularly enough to keep money sitting in there. I would rather keep our savings in a place I can use for any needs that arise – health care, fixing our existing cars, new car, etc. What I do is when I have a health care expense, I deposit enough money in the HSA to cover that expense, use it to pay the bill or reimburse myself for paying the bill, and voila it is paid and I get the tax deduction. This year, I carved out the tiniest piece I could in our budget and will make twenty-five dollar monthly deposits into our HSA. I know it’s comically small, but I figured that over time, we will eventually have an emergency health care expense, and I will feel really good knowing he have at least a couple of hundred dollars stashed away to help pay the bill. Also, I learned that money in an HSA doesn’t go away – even if you change health insurance plans! You can still use it, you just can’t make additional deposits to the HSA.
4. Establish an IRA for my husband, and make regular contributions.
I began my IRA through my employer when I started my job last year. I was, coincidentally, twenty-five years old. Since then, I have made regular contributions, and my employer has matched them. My balance is only a couple of thousand dollars at the moment, but it will make a big difference down the road. My husband turned twenty-five this year, and has no such plan through his job. He also anticipates being self-employed some day, so retirement is his responsibility alone. Accordingly, in January of 2017, we will establish his IRA and make regular contributions – roughly what I am contributing. To start us off on a positive foot, we will cash in a small federal savings bond I happen to have and use the proceeds as a foundation. By the end of his first year, he and I will be on roughly the same track and on our way to a financially stable future.
5. Stick to our budget.
What good is a budget if you don’t stick to it? After some tough conversations, we believe we have pin-pointed our problem with sticking strictly with the budget: extras! Extra needs or extra incomes don’t fit in the budget and we never know what to do with them. For example, what if we have used up our eating out budget for the month, and a friend we really want to spend time with asks to go out to eat? Or what if one of us gets a bonus, and one of us wants to use it to catch up on the budget we’re breaking, while the other one wants to use it to buy things which are really needed? See what I mean? Extras. To solve – at least hopefully – this issue, we have included a “slush fund” in our budget. This small, cash-only cushion will be used for the extras that inevitably arise. We have also agreed to treat bonuses like bonuses, which will happen when we truly stick to our budget. *fingers crossed*
6. Pay off two more student loans.
This year, I paid off one student loan and I’m half-way through another! I’ve thrown bonuses, tax refunds, and cash found on the street at these loans and can’t wait to slaughter them. I anticipate that our tax refund will pay off the one I am attacking now, so that leaves eight months to hit another one. By the end of the year, if we accomplish this goal, we will reduce our monthly payments by almost fifty dollars and save hundreds in interest! Motivation!!
What are your financial goals for 2017? What is in your family playbook for the next six months or year?
-D. E. Barbi Bee