Hubs and I are both natural savers (though, admittedly, he would like to save more than me). So it’s been tough to have such a low EF and throw all of our extra money toward debt lately without having much saved for a rainy day.
That’s all about to change, friends.
Hubs and I have been discussing our financial goals for 2016. We’re still hashing them out so this isn’t a definitive 100% set list just yet. And I welcome your input, too. But here’s what we’re thinking.
- Save $10,000 for a down payment. One of our big goals for this year is to buy a house. This gets pretty personal (in terms of personal finance), and I’m sure there are strong opinions all around regarding buying a house while still in debt, but this point is pretty firm in both of our minds. Our price point is the mid-100’s. We want to put 20% down to avoid PMI. To do so, we will use $10,000 (which needs to be earned and saved in 2016), and add to it $10,000 I have currently in a money market account. Yes. I rarely talk about it, but it still exists. Our thoughts are that we’re simply moving the $10,000 from one type of investment (money market) to another type of investment (real estate). In addition to that, my mom has generously offered to gift us an amount (I will not disclose) that should tip us over the 20% threshold and still leave us with funds for closing costs, etc. I don’t want to dwell too much on the gift as, again, this gets pretty personal. We are very grateful for her generous offer and feel comfortable with accepting it because this is something she has always told us about. She made a similar gift to both of my siblings to buy their first homes so this is something she has planned and prepared for for many years. One important note is that our current lease ends in August (though our landlord is very flexible and aware of our plans. He has already told us we could go month-to-month if need be when the time comes). Because we’d like to find a home over the summer, we need to save up that money during the first part of 2016. The sooner, the better. So this goal will heavily impact budgeting during the first half of the year.
- Save $5,000 for Emergency Fund. Really all of our savings funds need to be beefed up. As a reminder, I use Capital One 360(<refer a friend link) and have separate accounts for all of our different savings goals. These accounts range from the typical Emergency Fund to a health/dental/vision fund, car repairs fund, Christmas/travel fund, and more. Realistically, I’d like to save more than this (again – we’re savers by nature). But I wanted to start with $5,000 and go from there. We need to save room in the budget for debt!!!! Which brings me to our final goal of 2016…
- Put $30,000 toward debt. One of our goals for 2015 was to pay $30,000 toward debt. We did SO GOOD and have come SO CLOSE to meeting that goal. I’d love to have upped this figure to something closer to $40,000ish, but with so much of our money being diverted toward savings in 2016, I think $30,000 is still a good number to stick with. Once the house stuff is all situated, I bet debt reduction progress in 2017 will be gangster-status!
That’s it! It doesn’t take a mathematician to see that $10,000 + $5,000 + $30,000 = $45,000 toward debt and savings in 2016! That is such an insane amount of money! We are eternally thankful for our well paying jobs and relatively low cost of living in the state of Arizona. If you were to tell me three years ago that these would be my goals for 2016 I would have laughed in your face! Thinking back to the two struggling people just trying to get by while caring for twin infants makes my heart hurt. We were drowning in debt, maxed out on credit, and just trying to grasp at that next paycheck. It is no exaggeration to say that blogging here has been absolutely transformative for our family! We have accomplished more than we ever thought was possible!
Yes, we still have a long way to go (nearly $95,000 in student loans remaining). But just looking back and seeing all the progress we’ve made in such a short amount of time (less than 2 years) is so heartening. It just fills me with hope and promise for a future in which we can eventually be fully debt-free. I cannot wait!