Friday, January 5, 2018

Financial Preparedness, Week # 1

Financial security is something that can be fleeting.  One day you think you’re in pretty good shape and the next, an unexpected expense pops up and you’re financial security is gone.  If several unexpected expenses pop up close together then you might have to go into debt to cover them all.  Does anyone really want to have to do that?

Since our goal is to get out of debt, acquiring more is not something we want to do if we can help it.  This year we’re focusing on building up our savings to help offset those unexpected expenses.   

This first week of January 2018, we set goals of what we wanted to accomplish … the first goal, a short term goal if you will, is to build an emergency fund by the end of June.   This is a lofty goal for us, I don’t know that we’ll be able to reach it but we are surely going to give it a good try.

Setting the goal is not enough though; we need to put action behind the words, so we’re breaking that goal down into baby steps.  The first baby step, which I alluded to in our goals for January, is to fund 10% of our emergency fund.  Now, we don’t have any extra money lying around so we’re going to have to get creative and frugal and pinch our pennies so hard that you just might hear them yelling! 

We’re going to look at selling some things we have that we no longer need. 

We’re going to work on developing secondary streams of income. 

We’re going to save our change.

We are asking God to bless our efforts.

 We are getting serious about building our savings and it’s starting now.

There you have it, our first financial preparedness goal and an overview of what we plan to do to reach it.  Each week I’ll share what we did, the result and where we are in our journey.   I hope you’ll follow along and contribute your ideas and suggestions.

What about you, how’s your financial preparedness?  Is there a financial goal you’d like to reach this year? If so, write it down, make a plan and join us as we nickel and dime our way to the completion of our goals!

patsi
She looketh well to the ways of her household … Proverbs 31:27


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18 comments:

  1. I started an emergency fund years ago. I decided to bank into a separate account, the amount that I had been spending on buying coffee each day at a cafe near my workplace. I was really surprised at how quickly this added up. Ever since then we keep this account at a certain amount.
    I am starting a savings this year that I am calling my new kitchen account. Our kitchen is over 30 years old and is really showing its age. Several doors are not far from falling off. A couple of drawers no longer have handles. The old kitchen will have to keep going for a couple of years as it will take me that long to save up for a new one. This is my long term goal, starting now.

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    1. Jane, keeping the savings separate and apart from our other cash flow in crucial, like you said. I like your goal of saving for a kitchen remodel. To help keep you motivted you could start planning what you want it to look like after the remodel.

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    2. I know exactly how I want it to look Patsy. It has been a dream of mine since we moved into this house 4 years agoa. The major changes have been saved for and completed. Now it is time for the kitchen to be the focus. Our daughter works for a large hardware chain and will be able to get a discount on their kitchen flatpack products. We will have to see if Bluey is well enough to build it himself or if we will have to get the company to build it for us.

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  2. Hi Patsy,
    We need to start rebuilding our Emergency Fund too. It's taken several hits over the last 3 months. My aim is to rebuild it by as much as I can each month until we have at least 3 months bills behind us. After that, we'll carry on until hopefully, we will have 12 months bills behind us.
    We have a couple of loans tha finish this year & that money will go straight into savings, God willing

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    1. Kim, that sounds like a good plan. Here's hoping we both are successful with our goals this year.

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  3. I am so thankful that we were debt free when my husband became disabled last year. Our income is now half and we could not live on it if we had a mortgage or car payments. Fortunately we had been living on a little more than half and saving the rest so we were well positioned for our income that is were it will be now for many years. We had saved for a new vehicle over several years and replaced that last year and paid cash. We should be able to drive the new (used) one for at least 10 years but will need to save small amounts to rebuild that fund. Thankfully we did not spend all of it. I also have a fund for major home repairs that was well funded and an escrow fund that covers our taxes and insurance on the house. We expect to have replace a heat pump in the coming years so we need to have the money available. We will likely need about $3K more for that in the home repair fund. I have started a fund to purchase a small motorhome since I do not see any other way for my husband to be able to travel now. That could be years in coming to an amount that allows that purchase. I also have an emergency fund in place. I have all the savings in one account but keep a ledger with the amounts in each fund. I enjoy the challenge of the budget and plan to spend some time this month re-juggling amounts to fit our goals. In the coming months we will be able to start drawing from our 401K so that will supplement the budget and allow those savings to build. My husband said I always see pennies in parking lots because I squeeze them so hard they are running away from me! LOL!

    Just a little info that we found so helpful. We had saved through my husband's employer into a 401K but had no idea what to do with it. We attended a retirement seminar and got some questions answered. The 401K should earn 5% over the long term based on what the market has done over the last 20 years. So, if we draw 4% from it each year we will never run out of funds. That was very valuable information!

    Everyone will likely see some benefit from the new tax plan! We certainly will with the new standard deduction since our house is paid off and we do not have mortgage interest to deduct. That is dollars that can be saved!

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  4. My advice for anyone younger out there is to start early. I have friends who tried to get their finances in order before retirement and are struggling. My husband and I focused our energies to be debt free by 50, then we had a lot of years to build a cushion. I feel like in their 50's, when kids are gone is when most people become a little free and loose with their money. We also worked with a financial consultant (and still do) at Thrivent. It is a free service and it helps us so much to work on annual goals and keep on track. Even though we were good at saving, he knows things like how to minimize taxes you pay and things like that. I don't think we would be quite as secure if we hadn't gone there the past 10 years. No matter your age, don't retire until your house, cars and everything are paid off.

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  5. Dear Patsy,
    Count me in! We have our emergency fund in place, so our next step is to pay off our second vehicle. After reading your post this morning, I sat down and worked out the budget to see how much we would need to save each month to have it paid off by June. I'm looking forward to following along and doing what I can to save.
    Love, Kelsey

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    1. Kelsey, good for you, being proactive, making a plan and working that plan is how we'll reach our goals!

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  6. Patsy, I'm hoping to hit the savings account hard this year. I just finished paying my mortgage off so I'm hoping that I can save most of what I paid on it. I HAVE to make a plan and get my husband to agree to it! His idea of what to do with it and mine differ a little. Here's hoping for a good savings year!
    Hugs, Holley

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    1. Holley, it is harder when everyone is not on the same page but where there is a will there is a way. Good luck!

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  7. Im in too. We already decided we need to hit this hard, add selling things to the mix and more income streams. I think more bartering and networking too as these can both help in financial ways. We started off with a good week this week. I got major food bargains plus free fruit so what I actually need to buy is hardly anything and I will also be able to put away jam, pies, cobblers, stewed fruit etc. as well. I realise I have missed opportunities in the past i.e. seeing things on the curb that could fetch a good price. Now when this happens I will be re selling them! We do a $5 note and $2 coin challenge which adds up amazingly. We also had some things happen that are financially frightening. So the battle is on!

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    1. Annabel, I like that ... 'the battle is on!' It surely is a battle. You've shared some good ideas, I'm going to take note and see if I can apply them to what we are able to do.

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  8. How did you determine the amount you wanted to save for your emergency fund? A certain # of months of bills, or, ?
    Brenda Montanye

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    1. Brenda, we are starting with a basic $1000 emergency fund. After that we will go for a certain # of months of bills.

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  9. I think was are doing all of the same things. This is the year of getting it right!

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    1. Out My Window, yes ma'am, this is the year!! Let's do it!

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