Financial Goal Progress 2020

I've been sitting with a lot of thoughts in my head around this topic the last few days. My number one goal for 2020 was, "to stop spending money on stupid stuff", and while we maybe haven't been 100% perfect, it's amazing to see how far we've come, and the huge changes we've made, with almost no change made to our household income. 

When Derek and I first moved to Utah in 2017 we were in a lot of student loan debt. It was actually pretty crippling to our finances. I had $10k in loans that were about $139/mo, and then Derek had about $36k in loans, $8k of which needed to be paid back to his previous employer in Georgia immediately because we didn't stay with the company long enough after graduation for them to pay it for us. When everything was said and done there was a three month period where we were paying $1,800 a month in student loans. It was more than our rent or any other bill that we had at the time. Writing that number out actually makes me question how we survived when we first moved here. 

Derek received a signing bonus a few months after we moved here though that wound up being enough money to pay off his old company in Georgia, and then we were spending a little under $500 a month on our loans. 

In September of 2018, about a year after we moved to Utah we bought a home that we lived in for nine months, before selling it in July of 2019. We felt very convicted that it was the right time to buy that house when we bought it, and equally convicted that it was the right time to sell it when we did. The money that we got from the sale of that home we used to pay off the remaining balance on my student loans, and a little bit of the balance on Derek's. 

After that we just started hoarding away every single extra penny that we had to save for our next house thinking we were going to buy again at some point in 2020. At the beginning of 2020 Derek and I started listening to a lot of financial podcasts, youtube channels, and reading a lot of the Dave Ramsey things about getting out of debt. We really felt like our future selves would thank us if we instead of buying a house, we continued paying off more of Derek's student loans. 

So on January 20th of this year we took every single penny that we had saved away for a future home (almost $10k), and poured it into paying off several of Derek's student loans. He had about five loans that we were making monthly payments on that totaled $339 each month. When we payed off several of the smaller balances it brought his monthly total down to $200. Which seems like such a small cry compared to the $1,800 we were paying three years before. 

If you've been around for a while you might know that Derek and I were waving this white flag of, "We can't reach any of our financial goals in our lives because our salary isn't what we think it should be." At one point this year, Derek had been approached with a job opportunity in Ohio. Before the offer we said, "we'll only move if we make "x" amount of money and get a full relocation package". 

It didn't seem like such a crazy idea to move out of state because we had already sold our house a few months before and didn't have anything major tying us to Utah at the time. The offer came in and it was exactly $2k less than what we had already agreed on accepting, and they weren't going to pay to have us relocated. We also had something like two days to accept the offer. 

We looked at all the numbers and tried to see if there was any way we could make it work... there was no medicaid waiver programs for Kinsley, the closest Shriner's hospital that could treat her was two hours away in Kentucky, and the housing market for the areas where we could live were about the same, or more expensive than living in Utah. Although the higher salary was tempting, Derek and I conceded to stay where we were. 

Several months later there was a real possibility that Derek might be offered a job in Texas and I flipped out. For one thing, Texas is on my small list of states I don't want to live in because of how hot it is, and how that would negatively impact my running, but all of a sudden it really hit me how much I really loved Utah. Derek wound up not being offered the position but it was this real moment that helped us solidify that this was our home and that we were happy to stay here regardless of what our financial situation looked like. 

With all of that in mind, we started asking ourselves questions about what our financial goals were, where we ultimately wanted to live, how we were going to save for retirement, and how we were going to do that with the amount of money we have right now, and not putting things off until we think we have the ideal salary in the future.

This was around April of 2020. We knew the lease to our three story townhouse was going to be ending in July, and the rent was going up $200 that we didn't want to pay for a place that was not at all conducive to having a child who couldn't walk. We tried to find a single level home to rent, but everything that was available was so ridiculously expensive that it would have been cheaper for us to buy than rent. 

So now all of a sudden we were looking to buy a home, we had no money because we purged all our savings into Derek's student loans a few months before (and every extra penny since then), and a lot of unknowns about where we would live, where the kids would go to school, and what that was going to look like for everyone. 

Our options were to stay in North Salt Lake/Bountiful/Centerville, but buy a home that was super inexpensive so that we could also continue paying Kyle's private school tuition because that was also a thing that happened in the year since us selling our home, or move back to a small handful of neighborhoods in Layton where Kyle could go back to the same school he went to for Kindergarten and first grade so that there would be less school trauma on his end instead of having to try and figure out ANOTHER school again. 

As most of you know we moved and bought a house in Layton again over the summer. We were able to do a 60 day close so we could hoard every penny we needed for closing costs, and then got a really awesome loan to help pay for the downpayment. You can read all about that here

Once we moved in we were back to figuring out all of our finances again. The next big goal that Derek and I wanted to tackle was retirement. We previously weren't taking full advantage of his employer matched 401k program, so we upped our contributions so that we were taking advantage of that, and not leaving free money on the table. We then paid off all our credit cards (again), from all the random moving expenses that just happen (movers, washer and dryer, blog projects that need to be paid for up front that I then get reimbursed for 30-60 days after the fact, etc...) 

Once we had all of those moving things settled the next thing we finally did was open a Roth IRA in my name. Derek has his 401k from his employer but we also felt strongly that I needed to have a long term investment in my name too. The benefit to a Roth IRA is that you pay into it after taxes, which works well for Derek and I because our plan was to keep investing any money that was leftover at the end of each month which meant it was money we were getting after payroll.

We also admittedly didn't have any emergency savings stored away in case Derek got laid off or something crazy happened, so we've been taking our excess money each month and splitting it in half. 50% goes into long term savings in our Roth IRA, and the other 50% goes into emergency savings that we keep in a money market account outside of our regular bank account (out of sight out of mind right?)

The crazy thing is to look back and see how far we've come this year, and in the last three years. Three years ago Derek and I would have told you that we never would have been able to do any of the things we've done this year. We never thought we'd be able to start saving for retirement the way we have, bought a home the way we have, that we would have paid off $27,000 in student loans... all with almost no changes to our take home pay. 

For so long we thought that it was our salary that was holding us back from reaching these goals, when in reality it was us that was holding us back from reaching these goals. I think often we tell ourselves, "That seems impossible so I'm just not going to try...", and then we choose to live our lives in a way that doesn't give us a chance to reach those goals.

The biggest thing I've learned in the last year is to be honest about where your money is going, be honest about the things you can live without, make a plan with your spouse (if applicable) on what your long and short term goals are, and then hold each other accountable to reach those goals. Get comfortable with saying no to things if it doesn't fit in your budget, purchase clothes second hand, set a grocery budget and actually live by it, set one day a week to eat out so that it's something you can look forward to instead of eating out every single day, cancel monthly subscriptions you're not using (we all have them), live without cable, get the cheapest internet plan, the cheapest phone plan, get a side hustle (oh hey blogging!)

Honestly, I'm so glad that we never got that higher salary when we thought we needed it. I know it sounds weird to say that out loud, but if we had been handed more money when we wanted it, I don't think it would have ever made us crack down and get serious about our finances the way we have. I think we appreciate where we're at financially right now so much more because it's something that we've worked so hard at this last year especially, but over the last three years in general. 

Our goals moving forward into 2021 are to keep building up our emergency funds, continue contributing to our Roth IRA, and possibly finish paying off Derek's student loans? We admittedly stopped paying them when the pandemic hit because we were buying a house and saving every penny we could, and they told Derek he didn't need to pay them until January 2021. Now there is this talk of loans possibly being forgiven? (Ask me how bitter I am for actually paying mine off... I kid, but also not kidding kind of haha). So we're sort of waiting to see what happens on that front... But in general the main goal is to keep doing what we're doing and to stay committed to our long term goals! 

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