Is it almost the middle of March already? Time is flying! Now that February is well behind us, it's time for our monthly check-up to see how well we're doing on our financial goals for 2009.
After I shared specific reasons last month on why we've made it our goal to save up to pay 100% cash down for our first home (read them here if you missed that post), I realized by the emails and comments I received that a number of you are missing my point in sharing this.
The point is not that everyone here needs to save up and pay 100% cash down for a home (though I certainly hope we might inspire some of you to consider doing this), the point is to encourage you, by our own example, to work hard and aim high.
Perhaps you can't save up to pay 100% down on a home, but you can certainly do something and start somewhere. And that is what this monthly financial check-up is all about.
As you've probably heard it said before, "if you don't know where you're going, any train will get you there." If you don't have any financial objectives or goals, you'll likely spend most of your life aimlessly earning and spending and making little traction in the process.
You can choose to continue this endless cycle which will get you nowhere, or you can choose to start doing something and going somewhere today. Do you know where you want to be in a year from now, or five years from now, or ten years from now? Set down and map out some written goals and then make a plan to accomplish these goals.
If you've never set financial goals before, I encourage you to start small. Perhaps you could commit to sticking with a grocery budget for three months. Or maybe you could purpose to give up a particular small weekly expenditure and put that money directly into a savings account instead.
Whatever you do, do something. Even if it's something seemingly minuscule. Often, just taking a baby step in the right direction can propel you farther than you ever dreamed possible!
Setting financial goals and working intensely towards them takes sacrifice, self-discipline, effort, sweat, perseverance, and work. But it is so very worth it.
I remember back to our law school days when we were living in a little basement apartment and could barely afford to buy groceries. There were many days when I wanted to give up and give in. It was hard to wear the same clothes again and again, to drive old vehicles, to wonder how we were going to pay our bills that month, to forgo invitations to go out with friends because there was no way we could afford a restaurant meal that month.
There was many a time when I had had enough of the scrimping and scraping, but, by the grace of God, and the resolve of my husband, we kept on with our objective of finishing law school without any debt. And I can't even begin to express how grateful I am that we didn't give up when the going got tough.
So many people told us that it would be impossible to live on a part-time income throughout law school without incurring any debt. But you know what? I've learned that just about anything is possible, if you're willing to set your mind to the task, work hard, and not give up.
The financial freedom we have now because we're not carrying around the
bondage of school loans is amazing and was worth every bit of sacrifice
during those law school years. And tasting the victory of meeting a financial goal after long and hard toil has only propelled us on to setting bigger goals–in all areas of life.
So, wherever you are and whatever life situation you are in, may I encourage you to dream big dreams, set big goals, aim high, work hard, and persevere? And you just might find yourself completely surprised at what all is possible when you're willing to set your mind to do something, make the necessary sacrifices, and stop listening to the naysayers!
Related: I encourage all of you to read this great article on High Performance Achievement.
And now for the monthly progress report:
We started out February at 36% of our house savings goal. As of February 28, 2009, we're at 37.5%!
I was hoping to make it to 40% by the end of February, but at least we made some headway. In addition, putting less into our house savings than we'd hoped in February has motivated us to examine all areas of our budget to see how we could cut more corners–which is always a good thing to do!
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How did you do in February? Whether
or not you posted financial goals for 2009, please take a moment to
post about your financial successes and failures in February and, if you'd like, the areas
you hope to improve in March. Then, come back here and leave your link
below. If you don't have a blog or would rather share anonymously, feel
free to leave your update in a comment. Let's all keep each other
accountable to be better stewards of
our resources!
thanks for the inspirational post, crystal. i hear the zeal in a lot of the posters’ comments and my husband and i have had that (off and on) as well. i’d like to hear suggestions from you (or others) pertaining to staying motivated and on-target through the long haul of staying debt-free. i am a sahm, my husband is a public schoolteacher, we have 5 children, and sometimes, frankly, i feel a little deprived (though i know this is a condition of my heart and not of my circumstances). any words of encouragement?
I think its great that you are setting such a great example to your readers of good stewardship. We’re all a work in progress and we’re all ad different places in our journeys. Saving money is not easy in a culture that pushes instant gratification. I’m so thankful that my parents taught me to save from an early age. But so many people in my generation were not taught that at all. Its hard to change old habits, especially spending habits. Like you said baby steps can add up to alot when you stick to them. Thanks for doing a good work! God Bless!
Thanks for hosting! I love your blog!
Congrats Crystal on your achievements! You are an inspiration to me-We have been praying for you and your health during the pregnancy-thanks for all you do to encourage Godly moms!
If anyone who was considering buying a home would look at an amortization table for the amount they intend to borrow, they would very likely understand your wanting to save up 100% much more easily.
Google the words “amortization calculator” and input $100,000, 6%, 30 years, 12 payments per year. That is a reasonable amount for a mortgage in my area. You will see your payments are $599.55 over 360 months. That doesn’t include taxes or insurance, just the basic payment on the loan.
For the first 140 payments (more than 11-1/2 YEARS!) the amount going towards your principle is UNDER $200 PER MONTH. That means only 1/3 (or less!) of each month’s payment is going towards your principle. The rest is all interest – money you are never going to see again!
Now, start when you are first married – say you plan to live in an apartment for 6 years or so. I googled “savings calculator” and input an initial amount of $600, saving for 6 years at just 2% rate of return (some online accounts offer much higher than this, you just need to shop around) compounded monthly. At the end of 6 years, you’ll have $46,611 in your account – almost half of your $100,000 investment!
After 11-1/2 years, you’d have nearly $90,000 in your savings – roughly the same amount you originally borrowed…but if you go the traditional mortgage route, that $100,000 turns into $215,000 worth of payments!
I’m not saying this is possible for everyone. But think about $600 – couponing, not getting a $3 latte everyday (that’s $90 a month!), shopping sales and consignment, etc. Especially if you planned to live in an apartment or rental for the first few years anyway? And, every parent should be stressing the importance of regular saving once a kid starts their first job at 16 or 18. That’s the beauty of compounding interest – you just want it to work in your favor!
Your attitude is great. I recently read this quote, “If you have to wonder whether or not you can, then you CAN”T”. Continued success in your goals. I know from personal experience how great it feels. Last year my B-day gift to myself and husband……paying off our home!
Libby
P.S. LOVE your blog!!
I know you recommended My Total Money Makeover and I would like to thank you for doing so! My husband and I actually teach Financial Peace University by Dave Ramsey and I was really encouraged that people get so much out of the class AND the book! Thanks for being another encourager of living DEBT FREE!!! 🙂
Once again, thanks for the encouragement!
At your suggestion in several posts over the years (sometimes I’m a bit slow on the uptake, but I’m getting there) I checked out Dave Ramsey’s “Total Money Makeover” from my library. I grew up in a very fiscally savy family, and have always maintained “good” finances, but over the years I always felt “I think I can do better than this.” Watching people outspend their incomes and buy things they could neither afford or pay for, I thought for a while something was wrong with me. But common sense prevailed and I knew that I was on the right track, while everyone else was spinning out of control.
Although Dave’s book was mostly common sense, I loved hearing that other people were keen on eliminating and staying off debt. I love his step by step approach and that he encourages people to find value in life outside having to spend to find happiness. Since then I have started my Debt Snowball and am making great progress. Your updates are reinforcement that others are living within their means, are happier without more things, and making every dollar count. Congrats on your progress, I hope I can catch up!
My big goal has been to pay off my school loan in five years, $50,000 worth. My loan debt was after scholarships and grants as well, but still a huge burden. Particularly, I have been agressively paying off the one that is considered a private loan and has a variable rate, which started at 30,000 and some interest. I still pay twice the required payment on my fixed rate student loan with the 2.5% rate. While I was not able to pay off as much when I first got out of school in 2004 and my husband was overseas in Iraq, I have been lowering my debt vigorously since the fall of 2006 when I started my current job and started my career. The interest rate on this loan has been as high as 8.25% and was down to 5% recently and just dropped to 3.25%. Fortunately, my husband had no debt since the army National Guard paid for his school and his car was paid off. Also, we do not have credit card debt, although we do use ones with cash back offers and pay them off montly. My husband also has a savings CD we are saving towards a home purchase in the furture. We have been able to take advantage of our current living situation in our effort to pay off my loan. We have been lucky in that my mother-in-law had another house that was paid for, but that she was not ready to sell and said we could live there for a small monthly rent and to take care of it. She knew we wanted to take the opportunity to pay off my school debt. Another big plus we have on our side is that my father-in-law has a car repair shop and takes care of any of our car repairs for us. Since, we can save on these areas we take every opportunity to pay off my loan when we have extra money besides the huge amount that I a pay monthly as my goal. I have continued to increase my monthly payment and challenge myself to make higher payments. Most of my salary goes to paying off my loan. We also put my bonuses towards it, usually half our tax return while the other half goes towards our savings and sometimes Christmas money as well. At the end of last year I estimated the pay-off of the $30,000 loan would be in February 2010 and that I could finishing paying of the rest of my fixed rate student loan in another year. Since the one date is getting so close we have been focusing our efforts even more to get it paid off in the end of 2009. This year we put my bonus towards it, half our Christmas money (that was supposed to go towards a vacation) and all of our tax return in addition to my payments. At the end of last month my variable loan will now be paid off in November of 2009. I am getting really good at couponing and hope my efforts will help me raise my monthly payment even more as well. I also have a Upromise college account that I have over $200.00 in from last year and plan to withdraw from and add that to my payments. My husband recently bought a car, but b/c of the trade in and our awesome credit we have a low rate. He pays extra money on it every month and also puts money into savings. As the economy worsens, and I could lose my job since our company has had less work and has recenlty had lay-offs, I feel it is even more important to get my loan paid off. We are fortunate in that my husband is a sheriff’s deputy and will not lose his job, but I still want to make every effort to pay it off and even more so if I may not have a job. I borrowed Dave Ramsey’s Financial Peace University kit from a friend at work and hope that will help my efforts even more.
I had a friend recently buy a house and try to encourage us to do the same, saying everyone has school debt and not to worry about paying it off now. While, my husband and I would like to take advantage of the lower housing costs now too and buy a house, we will not until my two loans are paid off. After that I will need to get a new car, but plan to save for a few months for a down payment and pay that loan off as soon as possible as well. Then we will work on looking for a house. I am so thankful we can focus a lot of our money on paying off my loan. I know when it is paid off I will feel a huge sense of relief and accomplishment. The end is in sight.
We, like you and your husband, feel that a mortgage is DEBT, just like any other debt.
We originally planned to pay 100% cash for our 1st home, but several financial hiccups happened to prevent that. We did put down a hefty downpayment, and will have it paid off next year – two years after purchasing.
God gets all the glory, not our discipline, budgeting, planning, or anything else. We fully realize it is only through Him we have been able to do this.
Anyway, thanks for the post. It’s nice to be in the company of like-minded people 🙂
I gave you an award! Visiy my blog to pick it up:
http://lynssavingsjourney.blogspot.com/
I commend you for all that you’ve been able to accomplish and I hear all that you are saying, I really do.
Just sometimes though there are circumstances for some that make those big goals not achievable. I am frugal in all aspects of my life – I have always been. When there are issues like health (especially getting ill at a younger age) it can make a big difference to the goals that one can attain. Having youth and good health on one’s side really do matter.
Some do have to make the best out of living on less for the rest of their lives. That’s where we are at and I am peace with it. I do thank you for your post. I wanted to share another perspective from someone on the other side of the fence.
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Money Saving Mom here: Absolutely, Lyn. However, I strongly believe that everyone can do *something* and go somewhere–even if it’s just a little something. That was the point of this post. If we aim at nothing, we’ll hit it every time.
I am a SAHM to two little boys and I recently started watching two additional children in my home so that we could aggressively pay off our debt. In 2004-2005, my husband’s company had some hard times, and he went without a paycheck for over a year. I was pregnant, in school, and working two part time jobs to make ends meet. We racked up a LOT of credit card due to poor choices and trying to survive, but due to some hard work and living without more times than we’d like (we don’t even own a tv at all anymore), we’ve gone from over $25,000 in credit card debt to $7,000, which should be paid by the end of the year. I know that God has brought us through this, and he has blessed us 100 times over for being faithful to His call. We made a decision a couple of years ago to put giving ahead of whatever else we wanted to do, including getting out of debt, and He has blessed us for it. We have had help when we needed it, and money has stretched when it shouldn’t have. He is amazing!!!! Thank you not only for your encouragement, but for always giving God the glory when you speak.
Thanks so much for your encouragment in this area. This past month we got rid of satelite television to save $50 a month. We are putting that money directly into savings. We did decide that it was worth it to use the Redbox to get movies, but so far we’ve only spent $1 on that because of free codes.
I’m so glad that you encourage people to live frugally when they are in school. My husband and I married while he was in his second year of a four year grad program. He brought debt into our marriage from undergrad and a car he had, but I did not. He was unable to work much during this time, but I had a full time job in retail. During that 4 year grad program we accumulated no new debt and actually paid his car off due to hail damage that “totalled” my car, but left it drivable. We took the money from the insurance and put it towards his car making a big dent in the bill. Anyways, thanks for your encouragment!
Way to go! Keep up the good work and the inspiring words. My dh and I have about $18k left on a mortgage that we are paying off very fast, we should be without a mortgage by the time he’s 35 (he’s 33 now) and I’m 33–if not sooner. It is a great feeling and worth the sacrifices.
Keep it up… we became debt-free (home included!) in the summer of 2006. I have no regrets and hope to never go back! It was hard and people thought we were crazy for trying but now we are in our 30s and DEBT FREE!!! =)
Thanks to you and Dave Ramsey we have paid of 5 credit cards and have several hundred saved up for an emergency fund all in the past year! Of course we still have a car payment (which I pay extra on every month) and a personal loan but we hope to have those paid off by 2010. We cut the telephone land line, we cut the cable, we didn’t go out to eat, we stuck to $100 every week for groceries for a family of 6. I even kept the heat at 65 degrees just to save an extra 20 on the electric bill. You are a true inspiration!
MSM,
I commend you for what you are doing regarding saving for your house. We saved $90,000 for our first home, although around here on the East Coast it was just a down payment. I’m curious if you have taken into account the other costs of buying, such as closing costs, home inspection, taxes, repairs, etc. We ended up setting aside $20,000 for a repair fund for things that would inevitably come up down the road – a new roof, furnace, etc. Home ownership comes with a lot of incidental costs that some people don’t realize.
Great post Crystal! We are also saving to buy our house for cash, although we are not as far along as you all (thanks to our recent van purchase). I don’t think we will be able to pay 100% down, but I know we will probably be at 50% when we eventually buy. Hopefully our saving mentality will continue after that big purchase and we will only have a house payment for a few years. Not everyone can buy a house for cash, but you are so right, if you don’t have goals you will never come close!
Keep up the great work and don’t get discouraged. You are getting ready to have a baby and you might need to up your budget in some areas. Being on bed rest, I have realized that dh needs to purchase convenience foods for our family in order for everyone to eat and survive. 🙂 They cost more, but at least my kids are being fed and taken care of, when I can’t do it myself.
Toni
Crystal,
I first heard about Dave Ramsey because of you. I finally got my husband to go to hear him in person last month and we are doing the steps! Last month was the first month in a long time we were able to give money to our church! And we are actually considering saving 100% down for a house. Thank you for the information and the inspiration.
Crystal, I am with you, behind you, cheering you on. Keep going, don’t give up. The Lord is with you! May the Lord spur you on to even greater heights. Just think how He will use your home for His glory! On to higher heights.
Wow, that is a great goal!
We are working on paying off the timeshare and dh’s vehicle. If we keep it up, we will be able to hopefully have both paid by the end of the year. 😀 WOOOHOO!
We are working on getting our house paid for as well. Besides the house, we are debt free and have lots of stuff. You do have to start somewhere.
I love your attitude to buying a house – it is completely unheard of to buy a house in the UK with no mortgage. I think it is an amazing goal – one which will paid dividends again and again in the future. Not to have the worry of paying a mortgage is worth its weight in gold (literally). My aim this year is to pay off all my debts – at the end of this month I will have paid off my car loan and my credit card. After that I’m planning to put 6 – 8 months worth of expenses by and save for an extension on my house. The extension is quite urgent as I need a work space for my business at home.
After that I plan to attack my mortgage with vigour and hopefully pay that completely off in 6 years time. I would like to be completely debt free in 6 years time whether I achieve this I don’t know but I’m going to have a good try at it. I know this will make a huge difference to our lives as a family as often my husband comes home completely exhausted from work and often feels trapped due to the mortgage – I would love to take that pressure away.
Yes I agree with Jaycie – thanks for being so inspiring. Oh Jaycie congratulations on the car and for being debt free.
Thank you again for keeping me inspired! We are currently in a very tight financial situation and often are paying our bills only by God’s miraculous provision. When I first read your lofty goal of paying a house in cash, I was like “wow, we could never do that” and perhaps we can’t, but we can start somewhere. We began small, just by putting $10 per week away automatically into a savings account. It isn’t much, but it is beginning to add up. We keep re evaluating our budget each month to try to use our money wisely and maybe find a leak. Hey, even it is $5, if we can make that work better for us I believe in the long run it will multiply. Reading your progress every month keeps me so motivated and encouraged!
That is wonderful. I value the same things, and don’t know why people need instant gratification. My husband purchased our home before we met and I have encouraged him to keep it. Now, I am a working mom of two, and my entire pay goes to paying off the mortgage. I want it paid for in 14 years and we are on track. We have no other debt to speak of. It is, however, difficult to keep my husband in line with the spending plan but I keep trying! Thanks for sharing!
I have been working two jobs since January of this year to eliminate our credit card debt by the end of the year and increase our savings. As of today (a payday) 3 of the cards are paid off and an extra $1,000 in our savings account. We are on track to reach our goal by Christmas! Bets
I’m glad you posted about your law school days. It is how my husband and I felt last semester and it is encouraging to see others get thru it.
As always, perfect timing Crystal! We just got the title to our car today! I was sooo elated! Thank you for introducing us to the Total Money Makeover book many months back. It was just what we needed to get our debt under control and paid off. We’re now debt free except for the house! 🙂 Thanks for being so inspiring!
Blessings,
Jaycie