I’m surrounded by boxes once again, and in two days, we’ll move for the third time in eight months. It’s a stressful way to start the new year, but it’s really a great thing for our family. After eight months of frugal survival mode, we’ll finally be making enough to start building our savings instead of depleting it.
In addition to paid time off and a decent salary, we finally have employer-provided health insurance again after 8 months of COBRA and private insurance (Hallelujah!).
As I’ve written before, though, I actually find it harder to reach my goals when we’re living comfortably. A tight budget keeps me accountable and forces me to live frugally. More money means more temptation to spend frivolously. While this is more money than we’ve ever made, it’s still a very modest salary by today’s standards, and we’re going to have to stay focused if we want to stretch it to reach all of our goals.
To keep ourselves on track, I’m taking a break from packing to list our goals for this year and beyond.
1. Continue to live frugally.
Over the past eight months, we’ve had no choice but to live frugally. There wasn’t enough money available to go out to eat or buy things we didn’t need. Now that we’re earning more money, the temptation to spend will be greater, and we’ll have to stay committed to our frugal lifestyle.
2. Save at least 25% of our income.
The last year that we lived in North Carolina, we were saving about 30% of our total income. We’ll actually be earning more now than we did then, but we have loftier goals so saving will be a little more challenging.
3. Rebuild our emergency fund.
This is savings priority #1. Three moves, four months with no income at all, and four months earning less than we needed to pay our meager expenses have depleted our emergency fund to practically nothing.
4. Buy a second car.
We currently share a tiny economy car. It has served us well for the past four years, but now that we have a child, it’s a little cramped. In North Carolina, I drove the car to work and Tony was able to take public transportation to work and class. Now that we’re living in a city without reliable public transportation (and we’re living about 15 minutes from Tony’s job), sharing a car will be a little more difficult. So we’d like to invest in a second car so Judah and I aren’t stuck at home all day.
5. Buy a home.
We’re definitely renting for the first year in our new city — and likely the second year as well. But now that it looks like we’ll be settling down for a few years, I want to start making plans to become homeowners. That means meeting with a mortgage broker to find out what we need to do to get our credit in order and ramping up our savings for a down payment.
6. Pay off our student loans.
Becoming debt free is still pretty low on my list of priorities. I do plan to increase our monthly payments on these debts, but I’d like to wait until we’re homeowners to really buckle down and pay them off.
7. Increase retirement savings.
As part of his benefits package, Tony’s employer will be matching his retirement savings up to a percentage. We both have Roth IRA savings accounts as well. I will continue to put money earned through freelancing and other money-making projects into my account. We’ll also decide how much of Tony’s salary to contribute to his employer-provided account tax free.
8. Open a college savings account for Judah.
We likely won’t be too aggressive about saving for Judah’s college fund at this point, but I’d like to get the account in place so his grandparents can contribute if they’d like and we can put some money away when it’s available.
I’m so excited to finally have a bit of money to work with, but it’s not going to go far considering all of our goals. We’re going to have to be extremely focused. Stay tuned to see how we do!