2009 Financial Review And 2010 Goals

We had high hopes for our finances in 2009. My husband was back at work after 3 months of unemployment. And even though our income had been significantly slashed, we knew we had the tools to recover and rebuild. We were not counting on unexpected medical bills, another job loss, a move and having to pay rent and a mortgage.

Here are the original goals we set for ourselves:
1) Pay off my husband's car.
2)Make monthly "car payments" into a car savings account each month.
3)Build our emergency fund up to six months of living expenses.
4) Continue our normal contributions to retirement savings.
5) Paying extra on our mortgage.
6)Save $1000 to cover all expenses for next Christmas.
7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.

So how did we do?
1) Well, the car was paid off in January and that has been a huge help to us as we were able to navigate all the financial challenges a little better with no car payment.
2)We attempted the monthly car payment but were not able to do that every month.
3)Our emergency fund has been greatly reduced over the last few months.
4) We've not added anything to our IRA is the last few months.
5) We stopped paying extra on our mortgage when we realized we would have to sell the house.
6) We saved about 3/4 of the money we'd planned to save for Christmas and were able to stick to the reduced budget.
7) We were never able to address the college savings this year.

Looking back, I'm so thankful for all the tools that helped us navigate a challenging financial year. I have no doubt God provided us with the wisdom and resources we needed. In 2008, we learned to make and stick to a buget from Dave Ramsey's Total Money Makeover which is still a favorite resource of mine. I had also become a coupon shopper which had allowed us to greatly reduce our grocery budget. We also learned to say no to more stuff and find contentment with what we had.

As we look forward to 2010, the immediate outlook is more of the same. Until our house sells in Kentucky our finances are going to be very tight. Our income covers our basic expenses. Things like clothing, entertainment, travel to visit family, gifts, etc. are not part of the budget and will have to come from any extra income I am able to generate. But I have to say, it's kind of exciting to know that once the house sells we are going to be able to really save knowing just how little we really need to get by on.

So there are no big, grand financial goals for 2010 at this time. Currently our three goals are:

1) Sell our house.
2) Stay within our current budget so we don't have to deplete our savings any further until our house sells.
3) I need to find ways to generate extra income to cover the extras as well as best utilize coupon shopping for the things we need.

Once our house sells, we will revisit our budget and financial goals.

If you are new to budgeting and living frugally, I will be sharing a post soon on how to set up a budget that works for your family so stay tuned.

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Financial Goals: October Update

It's been a few months since I've posted an update on our financial goals. I just haven't known what to share. So much of our current financial situation seems counter intuitive to the financial goals we set for ourselves this year. My last financial update was in mid-August. My husband had just accepted a job out of state after his second job loss in a year. So what has happened since then? Well, we went a month with no income at all, from early August to early September. It then took awhile for the direct deposit to start so we ended up having to make a dent in our emergency fund to pay for things. Thankfully, the last few have made it directly into our account.

I have tried to be resourceful in funding things we need without impacting our budget. I sold books & magazines at Half-Price books and sold my girls outgrown clothes at a consignment sale to pay for the clothes they needed this school year. Most of the new clothes were purchased at a consignment sale & thrift store with the rest coming from great deals I found in stores. Thankfully my youngest didn't need many clothes since she had quite a few hand me downs. I reduced our grocery budget but that has been offset by the fact that my husband has to buy his own food so grocery spending is about the same.

My husband finished his training last week. Along with that came the end of the company paying for his living expenses. So we're now paying rent for him and the mortgage on our house. We knew this was a probability if our house didn't sell quickly which it has not. My daughters and I will be moving to join my husband in December whether our house has sold or not. Our feeling is that if we have to pay for two places, we'd rather be all together paying for two places.

Amazingly, and this just shows how God provides, I was able to put a little bit of money back into our emergency fund in October.

Here's a look at the goals we set for ourselves in January.

1) Pay off my husband's car.
Completed in January. Yay!

2)Make monthly "car payments" into a car savings account each month.

3)Build our emergency fund up to six months of living expenses.

4) Continue our normal contributions to retirement savings.

5) Paying extra on our mortgage.

6)Save $1000 to cover all expenses for next Christmas.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.

So, we're just not going to be able to accomplish most of those this year. However we did accomplish paying off my husbands car, increasing our emergency fund and saving almost 3/4 of what we needed for Christmas. Those things combined with the fact that we went into this time without any debt outside of our mortgage has meant that these last few months have been much more manageable. We haven't had to worry about a car payment. We had more in the emergency fund to work with. And I can still buy Christmas presents for family this year.

We know that until our house sells finances are going to be a tight. However, we still believe that we are following God down the path He's leading us and He will continue to provide for us. We are trying to be responsible with the resources He gives us and we realize that our financial goals aren't necessarily His.

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Financial Goals: June/July Update

I've not posted a financial update in a couple of months. Since my husband's job loss in July, we haven't been able to save anything. He started his new job Monday and we're going to try to save as much as possible between now and when the girls and I join him. We don't know how long it's going to take our house to sell and we know that the possibility of carrying a mortgage and rent is out there. We also had to come to the painful conclusion that with the sell of this house, we are likely to lose all or most of our equity. It's a bitter pill to swallow but again, we're looking forward to a fresh start and a wonderful opportunity ahead. We can rebuild it over time and in the end, we believe that the benefits of living where we want to live outweigh the temporary pain. I touched on this in a recent post. Here are the goals we set for ourselves at the beginning of the year and where things stand for now.

1) Pay off my husband's car.
Completed in January. Yay!

2)Make monthly "car payments" into a car savings account each month.
None in July, partial payment in June.

3)Build our emergency fund up to six months of living expenses.
Increased from 39.4% to 42.5%.

4) Continue our normal contributions to retirement savings.
Just letting it do it's thing right now.

5) Paying extra on our mortgage.
No longer doing this since we'll be moving.

6)Save $1000 to cover all expenses for next Christmas.
This is 71% funded. With all that has happened this year, I've decided to lower the budget and stop at 75% funded.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.
We have so many other things to deal with right now.

Ultimately, these next several months are likely to be financially challenging. However, God has always provided what we need and we believe He will continue to do so. We truly believe we are following His path for our lives with this new opportunity and are willing to make the necessary sacrifices for it all to happen.

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Simplifying Saturday And Job Update

Well, the last couple of weeks have probably been the craziest two weeks of my life. The day after my husband's job loss we packed up and headed to Alabama to visit my family. My husband had two phone interviews and two face to face interviews while we were down there. We left Alabama on July 31st and headed to North Carolina to spend the weekend with my husband's grandmother. We arrived home this past Sunday evening. This week has been a blur of doctors appointments, dentist appointments and back to school preparations.

We were thrilled and a bit in awe when my husband received a job offer this past Thursday, two weeks to the day he lost his job. If you want the full details on how this all worked out, you can read it here on my personal blog. This will require us to move but we'll be moving to an area where we've always wanted to live. We realize that in the short term that saving money is probably not going to be possible. Not only are we going to incur moving costs but we also have to sell this house. We know that we may have to carry a mortgage and rent for awhile. We have chosen to look at the long term benefits of this move which include living in an area with a lower cost of living, living where we have always wanted to live and being closer to family. We feel that the long term gain is worth the short term pain. This was not something that we decided to do on a whim. If you read the post on my other blog, you'll see this is something that we had already discussed and had been pursuing. We are very excited about this new opportunity.

So because of all of the circumstances of the last couple of weeks, I have not made as much progress in decluttering as I had hoped. However, yesterday my girls and I tackled the basement playroom. I was absolutely thrilled with my girls' enthusiasm and willingness to get rid of so many of their toys. The toy storage shelves and containers are mostly empty. We tossed a bag of trash and have a ton of stuff for the yard sale we're planning next weekend. This next week should be very productive for us as we prepare for the yard sale.

If you would like to join me in simplifying, please feel free to leave a comment detailing how you simplified this week.

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Reworking The Budget

I've been somewhat lazy about budgeting the last couple of months. I've needed to rework our budget for awhile now but have been avoiding it because it's not a very fun task. And honestly, I've been avoiding it because I really didn't want to have to look at how little wiggle room there is in it these days. So I spent a little time this morning doing what I've been avoiding, reworking the budget. Almost 8 months after my husband went back to work after his unemployment, we still seem to be adjusting to the new reduced income. When we made up our first budget about 15 months ago, we really didn't think about budgeting in terms of percentages. We just gave our money a place it had to go and put it there. This morning I was watching the Today show and their group of financial advisors gave the following percentage guidelines to use when creating your budget.
-10% long term savings
-35% home-mortgage/rent, property taxes, insurance, maintenance
-25% daily living expenses
-15% transportation-car payment, insurance, gas, maintenance
-15% other-debt reduction, etc.

So I sat down and started going over our expenses. It was somewhat discouraging but it is what it is. We are taking steps to reduce our living expenses and possibly increase our income over the next year or two but for now we have to make the best of our current situation.
Here is the reality of our current budget percentages:
-13.5% giving-This is non-negotiable for us.
-40% home-Ouch! Before the job loss this would have been less than 25%. If the housing market was in better shape, we'd go ahead and sell. For now we're staying put but exploring our options.
-15% transportation-We don't have a car payment thankfully! This really helps in this category. We can pay for gas and insurance and still have some left for future car savings and maintenance.
-4.5%-long term savings-The 10% suggested is supposed to be non-negotiable but that's just not our reality right now.
-27% daily living expenses-As much as I would like to trim this a bit I'm not sure how. We've cut things so much over the last year, I'm not sure where else to cut.

So now I have a better picture of our money and where it needs to go. It's just a matter of actually being able to put it there. We have back to school fees, multiple doctors and dentist appointment co-pays, birthdays and so many more extras coming up the next couple of months that making them all fit into the daily living expenses category is going to be a challenge. But I have a goal to work towards and will just have to be smart and creative to reach it.

I think it is easy to develop budget fatigue and lose sight of the big picture of your financial goals sometimes. It was helpful to take a fresh look at our finances and change the way I've been viewing budgeting. I feel re-energized in a way and ready to take on this new budget. How does your budget compare with the suggested percentages?

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2009 Financial Goals: April Update

Can I get a big hoorah! for tax refunds? Once again we got hit with unexpected bills. We had to get a new alternator, a new fuel pump, 2 new belts and some minor maintenace work performed on my car this month all within 2 days. Thanks to the refund we were able to take care of this and still have money for savings. Yay! Here's the update:

1) Pay off my husband's car.
Completed in January. Yay!

2)Make monthly "car payments" into a car savings account each month.
Made 1 months "payment".

3)Build our emergency fund up to six months of living expenses.
Increased savings from 34.4% of goal to 39.4% of goal.

4) Continue our normal contributions to retirement savings.
done

5) Paying extra on our mortgage.
Still rounding up for small extra payments

6)Save $1000 to cover all expenses for next Christmas.
Account is 58.9% funded.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.
Not there yet.

We also made some minor home improvements and began a vacation savings fund.

It looks like we are on track to meet our savings goals or at least come close in May. Barring any surprise expenses of course.

How was your April? Share your update in my comment section.

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2009 Financial Goals: March Update

Well, I must say I'm glad to put this month behind us. We got the bulk of our medical bills from a February ER trip and follow-up drs. appts. during March. This all went on our independent health insurance that had a high deductible which meant a lot of out of pocket expenses for us. There was absolutely no savings and we had to dip into our emergency fund to cover some of the medical expenses. There were also a couple of unexpected bills including a tax bill. Clearly I need to start paying closer attention to local government so I know when they create new taxes. It would've helped to have been prepared. I am so thankful for our emergency fund. I'm just ready for it to start going back up instead of down. Thankfully we will be able to replace the money we had to take out as soon as our tax refund comes in. I have listed our goals but the only thing we accomplished was a little extra on the mortgage. I am hopeful that April will prove to be a much better month for us financially.

And as frustrating as this month was, I feel really blessed that we have no debt aside from our mortgage. We've come a long way in the last year which made this month a lot easier to manage. Our new insurance went into effect which has a much lower deductible as well as costing us less per month which really helped.

1) Pay off my husband's car.
Completed in January. Yay!

2)Make monthly "car payments" into a car savings account each month.

3)Build our emergency fund up to six months of living expenses.

4) Continue our normal contributions to retirement savings.

5) Paying extra on our mortgage.

6)Save $1000 to cover all expenses for next Christmas.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.
Not there yet.

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2009 Financial Goals: February Update

We're still adjusting to this new reduced income level but we did a pretty good job of saving what there is to save this month. Here are our goals and how we're doing.

1) Pay off my husband's car.
Completed in January. Yay!

2)Make monthly "car payments" into a car savings account each month.
We made our first "payment" into this account this month. It was only about 1/2 of what our goal is but our income should improve over the next couple of months.

3)Build our emergency fund up to six months of living expenses.
Ugh! We ended up having some unexpected medical expenses as well as repairs to the dryer come up this month so the money set aside for the emergency fund covered those expenses instead.

4) Continue our normal contributions to retirement savings.
Hubby is not eligible for his 401k yet and we are looking into not utilizing it after doing some research in this area. If we decide not to use it we will start regular contributions to his IRA.

5) Paying extra on our mortgage.
We rounded up and paid extra on our mortgage this month.

6)Save $1000 to cover all expenses for next Christmas.
We were able to save about 1/2 of our monthly goal.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.
Not there yet.

We were pleased overall with our savings and glad that we had enough money to cover the unexpected expenses without dipping into savings. We have more medical bills coming up that we will have to pay so we're not sure how that will impact our future savings. However, the company insurance goes into effect in a week so we can drop our independent policy this month. This will free up an extra $150 a month. We also scaled back our cable package this month freeing up an extra $35.

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2009 Financial Goals: January Update

Time to give an update on how we did financially the first month of this year. We didn't accomplish nearly as much as I had planned/hoped. We just weren't as diligent as we could have been but there were some successes as well. We knew saving money was going to be difficult the first few months of this year and we just didn't tighten the belt enough to make much happen in that regard.

You can read the full details of our goals here.

1) Pay off my husband's car.
Done!!!!! WooHoo!

2)Make monthly "car payments" into a car savings account each month.
We did not put any into this account in January since we paid off the car instead.

3)Build our emergency fund up to six months of living expenses.
No money added to this account this January.

4) Continue our normal contributions to retirement savings.
No 401k yet through husbands work. He got everything transferred from old 401k and set up an IRA with that money.

5) Paying extra on our mortgage.
No extra on January mortgage.

6)Save $1000 to cover all expenses for next Christmas.
Again, no savings however I did spend a little to save a little. $200 of that $1000 was going to go towards buying a new artificial Christmas tree since our old one bit the dust. I found one on clearance at Michael's 90% off. I paid $29.99 for a new 7.5 ft pre-lit tree saving us $170.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.
Not there yet.

I also spent a little to save a little on kid's clothes. I got some great clearance deals on clothes for next Fall/Winter. But because I did that I didn't have the extra money for savings. I have mixed emotions on this.

For more financial updates visit MoneySavingMom.

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2009 Financial Goals

My husband and I took a bit of time recently to discuss our financial goals for this year. This is our first year in our 14 1/2 years of marriage that we started a year with some real financial goals in mind. As I mentioned in a previous post, our new budget is pretty tight. Things will begin to improve in a couple of months when my husband completes his training and is eligible to start earning bonuses. We will also get a bit of relief when the company insurance goes into effect and we can drop our independent health insurance policy. Those two things will make it much easier to save. But we've got to make it through a couple of more months to get there. Saving will be hard the next couple of months but we're going to do our best.

Here are our goals for 2009:

1) Pay off my husband's car. We owe just under $3500 on it. Since my husband is working again, we're going to take part of the severance money he received to eliminate this debt. We will take care of this within the week. With this done, our only debt left will be our mortgage. Yay!

2)Make monthly "car payments" into a car savings account each month. We plan to put $250 a month into a special savings account earmarked for our next car purchase. We want to be able to pay cash for the next car we buy. We already have this account set up but up until this point haven't been able to contribute much to it. With the old car payment gone, this will be much more doable.

3)Build our emergency fund up to six months of living expenses. Honestly, this is going to be a bit of a stretch to accomplish this year. After paying off the car and a few other unexpected expenses that have come up recently we're going to be back at about 3 months of living expenses in our emergency fund. With the income reduction, it's going to be harder to come by this much money for this fund alone but we're going to do our best to accomplish this one.

4) Continue our normal contributions to retirement savings. We're on a pretty good path in this area.

5) Paying extra on our mortgage. I'm going to begin doing this again next month. It will just be a small amount for now.

6)Save $1000 to cover all expenses for next Christmas. As I mentioned in my Preparing for Next Christmas post, I hope to be able to reduce this budget next year.

7)Finally, by the end of the year, we plan to evaluate our savings plan and find a way to begin saving for college expenses.

As you see, we still have some goals to work towards. I have been looking into ways I can contribute to our income while still being able to stay home as a way of making saving money easier for us. We had hoped that we could increase the grocery budget once my husband went back to work but have decided to leave it where it is. We haven't had to make any real sacrifices the last few months with a $60 a week budget and it has forced me to become a better shopper. We need every penny available for savings now so it just made sense to leave this where it is. We will also continue to be very careful with our clothing, entertainment, gift, etc. budgets to make more available for savings.

So what are your financial goals for 2009? Write them down and share them here or with someone else for accountability.

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