For the last few, possibly 7, years I’ve been halfheartedly attempting to pay off my debt. Last year I got serious, started this blog, and really dedicated myself to being debt free.
In December 2015, it became clear that I would be able to achieve my goal in 2016. Not wanting to lose steam and find myself right back into debt I added a few more goals.
I’m so glad I did! My priorities have changed a bit so I’ve updated my goals and my action plan.
Goal 1: Help ML
Our goal is to have ML be debt free. ML has been paying his own debt but with my debt gone I’m going to be putting 66% of my extra money towards his credit card. By my taking on his credit card, he’ll be able to put more money towards his student loan. With a little luck we’ll both start 2017 debt free!
Goal 2: Home Improvement Fund
A few years ago I owed the government money, I had switched jobs that year and one of the companies hadn’t taken enough off my paycheques to cover my taxes. I ended up owing ~ $700 so I set up a tax savings account to cover if this happened again.
It’s been a few years and I’ve gotten tax rebates every year. So this year I converted the fund to a Home Improvement fund and kept putting the allocated money into it. I’m going to put 22% of my extra money to this. Hello Kitchen!
Goal 3: Emergency Fund
The extra 12% is going here. After I explored my fears regarding cutbacks I’m not as concerned about this. I still feel it’s important to have an emergency fund but I also feel that I have a decent buffer at the moment. The 12% will allow me to slowly have my entire buffer in one place.
Did you make resolutions this year? If so, up to re-visiting or re-committing to them? I’d love to hear how it’s going!
Saving Without Scrimping 
Once you find a path its amazing how much wider we are capable of making it. Congratulations on all you’ve accomplished and on all the future additions (you will accomplish) that you’ve added to your list.
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Thank you! It really is surprising that savings goals and therefore life goals that felt like pipe dreams now seem feasible.
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This year we are saving full steam for a basement bathroom addition and a trip to England in 2017. We have to make that happen after fully funding retirement, so it will take some doing!
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Those are big goals! That’s so exciting!
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My only concern is after a while whether you would feel restricted by putting your money towards ML’s debt. Of course you are married and may feel what’s mine is theirs, but there’s something psychological about putting in the hours working hard and then seeing the money go… elsewhere… (whereas paying off your debt might be more incentivising because the debt is attached to your name and a bit more personal because you know what you originally spent it on). Any thoughts?
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That’s exactly why I focused on mine first :).
The original plan was that I would up my savings and filter the rest into the spending plan. The hitch came when I realized having that much money available would encourage me to spend on frivolous wants.
Helping him pay off debt will mean we can both save for joint goals. My big concern is that I won’t get the thrill of seeing his debt decline (as we have separate accounts).
We both benefit when he’s debt free so that helps. Though I doubt I would be doing it if this was debt he accumulated before we were together.
I’m sure some of it is directly a result of my wants and needs .
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Good answer! Glad you’ve thought about it 🙂
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Thanks! It was definitely something we considered and ML is adamant that my help be no more than I can handle. So we’ll so it in the same way I paid off mine, where ‘leftover’ income goes towards the debt.
This way I’ll pay a chunk but not feel restricted.
Great question!
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You are an inspiration! Tackling debt in such an organized and focused way gives you the tools to tackle anything life throws your way.
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Thank you!
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Great goals, having them written down seems to be the trick to get them achieved. Best of luck!
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Thanks!
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Those are all great goals, congrats for doing so well with your previous ones as well 🙂
I’m guessing you’ve said you aren’t going to put extra money to invest until you’ve paid off your debts?
Tristan
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Thanks! I had kept up some investments that have with a company but have been rather blindly going along.
also have a few more liquid savings aaccounts that I kept up. Now that I have the mental space I’d like to get a greater understanding of investments. It’s currently part mental block as I can easily feel overwhelmed when big numbers get thrown around. My plan is to keep saving and learning.
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Investing is definitely the most important factor, after debt, for reaching FI. It’s a big investing world, which takes a lot to learn about. Maybe you could start with some very cheap ETFs or index funds from Vanguard.
Tristan
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Thanks! I will definitely look into it. I’ve just started exploring your blog and I’m loving what I see!
I want to give myself this year to research so I can feel confident in my decisions. I had lucked out as my last financial advisor was a good friend who knew what I needed and was in tune with my goals. Unfortunately, he opted for a career change so I’m back to navigating this world on my own.
Luckily, this time i have the WordPress community. I find it easier to take peer to peer advice when I see someone living it.
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You’re doing awesome! Congrats. Looks like you got a great plan for all that extra money! 🙂
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Thanks!
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