Tuesday, February 19, 2013

Money, Clocks, and Target

Last week Roman and I visited our local Target. It is always a bad idea for me to go to Target. It is an even worse idea for me to go to Target and say, “I’m just going to look around”; yet still bring my purse and wallet inside. But in my defense, that wall clock was only six bucks and we’ve been looking for a bigger wall clock for our living room for a reeeaaalllyyy long time. Six dollars, people. Six. Dollars.
But now the problem is, I’ve been inspired by all sorts of cute decorating things and so now I want to go home and paint my whole house and buy new furniture. I also want to throw away my entire closet and just buy everything in Target to replace it all. Who wants to take a guess at what I would do if I won the lottery?
ANYWAYS, Roman and I set up some financial goals at the beginning of the year, and without getting too personal, I’d like to share them with you and how we plan to tackle them. I would have included all of this in my New Year’s Resolution post back in December….but…we didn’t have the financial goals settled on yet. And then I forgot. Oops.
Goal #1: Pay off student loan by end of 2014
Unfortunately, Roman’s main scholarship for college ran out so we had to take out a small student loan to pay for his two semesters. It’s not too big (nothing like what some college students graduate with), but we’d still like to have it paid off as soon as possible.
Goal #2: Pay off credit card/credit line by July of 2014
In case you haven’t heard me mention it a billion times before, being a newlywed with both husband and wife in college full-time is stinking expensive. Only by the grace of God (and some help from our parents) were we able to come out of those two years with only a small student loan and a couple thousand dollars on our credit card and credit line.
Goal #3: Go on a second cruise in October
Thanks to our tax refund, we have already paid for our next cruise. And it’s a lot sooner than October. But I’m not telling you when we’re going because some creeper may read this and break into my house while we’re gone. #I’mnotparanoid.
Goal #4: Have $3,000 in savings by end of 2014
Before we got married we were both really good at saving. We had over $1,000 saved up for our honeymoon and I had over $2,500 saved up in my savings account. Then we got married and had to pay bills and act like grown-ups and stuff and forgot how to save entirely. Two years of college later, and we have less than $500 saved up…which is a terrible emergency fund. That wouldn’t even pay our rent. *Ahem*
Goal #5: Pay off our couch loan by end of 2014
A few months ago we took out a loan so we could buy a nice, comfy sectional. But we also had ulterior motives: it’s called “no one wants to give us a loan because we are so young, so we need to build up our credit”. The loan is actually supposed to be paid off by 2014, so I guess this isn’t really a goal as much as it is a requirement. Whatever, I’m still listing it.
Goal #6: Be 100% debt free by end of 2014
If we meet all of the previously listed goals, we will be 100% debt free by the end of 2014 *IF* we decide to keep my car. We are still playing around with the idea of trading it in for something larger, and if we do then we won’t meet this goal. But still, having everything paid off except for a car loan sounds pretty good to me! And if we do have everything else paid off, then we could afford to make extra payments on the new car in order to pay it off sooner. Holla!

I guess these aren’t really New Year’s Resolutions since all but one of them carry into 2014, but that’s okay. So how are we planning to meet these goals? WELL, me being the spreadsheet-obsessed woman that I am, I took each one of our goals and divided the amount of money needed to accomplish that goal by the number of months left until our “goal deadline”. This gave me the monthly amount we needed to save/pay each month in order to meet our goals. I then took those amounts and put it into our monthly budget and then crafted our budget around that. Roman and I have found from real-life experience that the statement “You spend as much as you earn” really is true, so I knew if I didn’t put those amounts in our budget at the beginning of the month, they would never make it in there.
Honestly, I must say that our goals seemed really aggressive at first, but after putting everything into the spreadsheet and cutting our grocery/eating-out budget just a little, we have been able to make it work just fine. And with our tax refund, we were actually able to pay off the credit card already and we are over halfway done with paying our credit line off as well…as well as going on our second cruise this year (don’t get me started on how excited I am about that!!!). So it looks like we will definitely be meeting some of our goals early. Yay!
Oh, and as far as how we determined which goals were most important. The student loan is of least importance because it has the lowest interest rate. So our first priority was the credit card/credit line since it has the highest interest rates. The couch loan is the second priority, since it has a pretty high interest rate as well. Basically, we started out making the minimum payments on the couch loan, the student loan, and the credit line, and then we made a really high payment on the credit card. Now that the credit card is paid off, we make the minimum payments on our couch loan and student loan while making a really high payment on the credit line. And then we will continue with that method until everything is paid off.
AND for any of my doubters out there, having a spouse who works off of commission is NO excuse for not having/sticking with some sort of a budget. I know this because Roman works off of commission, and although he can give me a ballpark estimate, I don’t have exact numbers until two days before he gets his check. And when you work off of a monthly budget, that can be pretty difficult, trust me….I understand. So if you want to follow this type of plan, here is my tip of the day: Take a look at the average amount you/your spouse makes each year and divide by twelve. Put that as your spouse’s estimated income, and then adjust as you go along. For instance, in January Roman made a good chunk of money, so we made some extra payments on our debt and saved some extra as well. This month, he didn’t make as much, so we cut back a little on our debt payments/savings. But because we made the extra payments last month, we haven’t been set back in our goals at all. In fact, we are still ahead! Like I said, when you have extra money, you spend it. So on the months that your spouse brings home big $$$ from commission, make sure you take some of that and put it towards your goals before it gets spent on take-out and movie dates. That way those lower-income months won’t set you back.
And before all you people start thinking I’m a genius, please know that all of these principles were taught to Roman and I from our parents and close friends. And some of them come from Dave Ramsey’s “Financial Peace”. For any of you looking to pay off some stuff, learn how to create a budget, learn how to save, etc., I HIGHLY recommend you read this book. And most importantly, PRAY with your spouse over your finances and pay your tithes!!! I can guarantee you that if Roman and I had not prayed over our finances and been faithful in our giving, we would not be where we are today. Even after setting these goals we prayed to ask God to bless our finances and make us good stewards of what we have. And with each paycheck I make sure to pay our tithes before anything else. I 100% believe that praying over your finances and being faithful in your giving makes such a big difference!

So there ya have it! Six financial goals that will *hopefully* be accomplished by the end of 2014. Maybe once we get done with that I’ll allow myself to re-enter Target.  ;)
“Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it. ~Malachi 3:10

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