Wait a minute, it's not 2024 yet, we still have 2 more days left in 2023! Yes, I know, but I need to get this post out in order to be ready to hit the floor running when 2024 rolls around!
This post is about identifying our 'why' for 'hunkering down' in 2024. Sometimes being reminded of our why can get us through the more difficult times of penny pinching.
Here's our why, it's a two-parter ...
(1) to rebuild savings
(2) to pay off remaining debt
That's our why, now for a plan ...
To rebuild our savings the plan looks like this ... put 10% of monthly net income into savings after all necessary bills are paid and before 'living' expenses are taken out. Whatever is left after bills are paid, 10% of that amount goes straight into savings. (We have an amount set that we'd like to have saved by the end of the year.) This will mean less for our 'living' expenses and that's where the hunkering down will come in.
To pay off remaining debt the plan looks like taking any and all extra money such as an extra week in a month paycheck and applying it towards our debt. Also, we are utilizing the snowball method of debt repayment which will pick up momentum soon as we're nearing the end of having one debt paid off. Also, I will be looking at ways I can earn extra income from home to apply to the debt.
That's our plan and I am daily covering it in prayer.
Each week on Friday, we'll meet here, and I'll share what hunkering down looked like that week in order to meet our goals.
What are your goals, your why and your plan for 2024?
until next time,
mrs. patsi @ A Working Pantry
She looketh well to the ways of her household … Proverbs 31:27
Sharing 44 years' experience of frugal, prudent living and pantry building
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Good reasons and a good plan. We received one estimate for tornado damages and it’s around $15k. Not horrible. Praying that insurance covers part or most of it. So hunkering down is a good idea
ReplyDeleteLee Ann, I hope and pray that insurance covers ALL of it!
DeleteI like your plan-it is sound and doable.
ReplyDeleteDeloris, that was the criteria when I sat down to create a plan, I wanted it to be sound, realistic and doable. Unrealistic plans are a waste of time besides setting us up for failure and disappointment.
DeleteSo very true, Patsy. Thank you for saying that! --Elise
DeleteMy "Why Hunker Down" reasons are the same as yours, Patsy: 1. build savings back up, and 2. pay off remaining debt. I also have a number 3. become more self-sufficient/less dependent on the tyranny of price increases.
ReplyDelete1. Plan to build savings back up: my S.S. kicks in soon after the 1st of the year. All of that will be put into savings, as will a rebate from the electric company that we were notified about this week.
2. Plan to pay off remaining debt: scale back as tight as possible with our regular income, throwing whatever we can at those bills + any extra income we can generate from home.
3. Plan to become more self-sufficient: polish old skills, learn new ones, get creative and innovative.
The economic road for ordinary folks is about to get bumpier very soon. I don't say that lightly. Nor is it intended to panic anyone. I've followed economic news for decades and even wrote the Economics Watch column for the World & I magazine in the 1990s. My writing for pay years. --Elise
Elise, Obviously, I like your first 2 goals as they are pretty much the same as mine, but your third one has my heart and soul. This is what I've been about for it seems all my adult life. One of my goals for 2024 is to learn a new skill or improve upon an old one each month. I'm being very specific with my other 'non hunkering down' goals as well. I just feel like this is a time that we all need to be very intentional with how we prepare for the coming next few years. Love your comment!
DeleteElise, your number 3 resonates with me too. Aside from building our savings account back up, part of what we save is going into projects that will make us more self-sufficient and save us money in the long run (while providing security and peace of mind). For example, we just invested in a wood burning insert for our fireplace so that we can heat our whole house (fireplace was nice but not efficient). It has already saved us a substantial amount in the first month of use, so it will eventually pay for itself and beyond. We are looking at rainwater tanks some time in the next year.
DeleteKelsey, rainwater tanks are on our list for this year as well.
DeleteKelsey, when we retired last year to a (manufactured) home on an acre, we invested in a stove for heating the house. We have propane, too, but the stove is more cost efficient for whole house heating. We also invested in ground mount solar with back up battery. Expensive, but worth it, as we'll get a big check from the electric company for the year, and our electric runs $20-30 mo. even in summer w/air conditioning. A water tank is on our "to buy" list when savings is more comfortable. --Elise
DeletePatsy, the older I get, the more I want to learn. :-) --Elise
DeleteElise, I totally get it!
DeleteWay to go, Elise! Solar is on our "eventually" list. Little by little we make progress.
DeleteSounds like a good plan. I plan to throw as much at the car loan as I can and get it paid off this year.
ReplyDeleteSue, you have a good plan too!
DeleteI'm right there with you, Patsi! As you know, the last year saw lots of unexpected expenses and repairs for us, as well. In fact, they are still coming. My phone is on the fritz and it looks like we need a new lateral line (sewage). This is on top of the ever increasing cost of general living. But I'm determined. Fortunately, years of living a frugal lifestyle made the way for these expenses to be paid without acquiring debt. But getting ahead (or simply caught back up) is now an uphill battle with attacks from all angles, so I'm armed with my goals and plans, too. It helps to be part of a group with others cheering us on, so I thank you for that!
ReplyDeleteKelsey, I think many of us are in the 'simply getting caught back up or ahead' category after 2023. The increasing cost of living just makes it that much harder. I hope we can all learn from each other as we travel this road of hunkering down and rebuilding.
DeleteThis does sound like a good plan and is one that my huggy and I are doing also. I just have one question (which maybe I shouldn't ask): With earning extra money from home, how do you deal with taxes?
ReplyDeleteKim, I plan to keep records of expenditures spent and money earned and treat any profit as taxable income.
DeleteOne has to be careful to make sure one can make a profit, otherwise it's really wasted time ... that's where I'm at in the process right now. Would I help our family economy more by hunkering down and being more frugal or would our family economy truly be helped by any side hustles I could do. Of course, this is going to be different for everyone, but regardless, the taxes have to be dealt with. Should there be a need, I will definitely consult the person who does our taxes.
Similar goals with savings, no debt thankfully. But would like to max my 401 contributions for 2023 as well as 2024. I’ve created a zero based budget including x amount for savings, I can never stick to them but maybe this year.
ReplyDeleteAnonymous, sticking to our budgets when the new wears off and the dailyness of it sets in is hard. That's where the rubber meets the road and maybe knowing this going in will help us work through those rough spots. Maybe the support and encouragement of participants in this challenge will help. We plan to do the best we can to stick to our plan, but we aren't going to beat ourselves up if we fall off the wagon once in a while or if something happens beyond our control to derail the whole plan.
DeleteI am hoping hubs can get with the program as he is an impulse spender and not small ticket items either. Thanks for your support. PattiCinCO
DeleteOur plan will take into account the loss of 20% of our income. Part of the goal for 2024 is to adapt our budget to that so that I can hold off on taking my SS. We have the bulk of our savings in a CD so that it earns the maximum that we possibly can and it also keeps it less accessible so that we would really need to have a serious need before we spend that part. Those earnings go into our savings part so that can be considered as part of our savings by keeping that amount in the CD. Since I have been putting that 20% into savings for several years savings have been easy but now I am going to have to really consider where I can cut back the budget to make the big savings happen. SS COLA will go straight into savings so that is part right there. We need to save enough for taxes and insurance on our home each year and enough to have for any big repairs on our home.
ReplyDelete2023 was an expensive year with a new front door, rotten foundation repair and hand railings to the tune of $10K right out of our savings. One thing that has to be taken into account for us is Hubby's health and my inability to do any real physical work because of my genetic disease. This requires us to hire jobs done instead of being able to do them ourselves. We have a college age neighbor boy who is very handy and can often do small jobs for us and that saves a lot over hiring a professional. In fact he will be replacing a small area of siding for us on Monday.
Another area I need to work on is reducing the pantry some because we have too much on hand and things are going out of date so we need to eat everything down a bit and be more mindful of what we really need no matter what the cheap sale price is and that goes for our salvage store shopping as well. I plan to reduce the grocery budget by 1/6 back to what it was 18 months ago. Even though prices are high and often higher every time I look at the ads we have to look at reality here and not waste what we have.
Lastly for 2024 is downsizing the amount of stuff we have. We are starting to feel like we need to once again consider downsizing house and actually are considering moving to the small town where our lake house is located. But, we have to really hunker down and get rid of a lot of stuff that we would not take to another home. You might wonder about frugal people with a 1/5 share in a house on a lake. We own that free and clear and it costs us only $960 a year in fees for 8 weeks to get away and rest which is so good for my husband's brain injury so we will keep that even if we move near to it. it is an amazing story how God gave me my hearts desire to have a vacation house on a lake 23 years ago.
We can all do this!
Lana, I'm so glad you have the lake house. That's a small price to pay for that kind of get away! God is good! We are eating down our pantry too which goes really well with freeing up some extra money to go towards our goals. Our pantry has changed with our age, we don't eat as much as we once did, nor do we eat some of the things we used to eat. It's an art to keeping a well-stocked pantry that meets changing needs! Your plan sounds doable and like you said, we can do this!
DeleteI love that you have a lake house to get away and regroup. pattiCinCO
DeletePatsy you plan sounds wonderful and the snowball way of paying off debt was exactly how we got out of debt ourselves and it works well :) .
ReplyDeleteWell I have to say we became debt free in April 2023 and now own our own home so our priorities have now switched as we are around 7.5 years away from retirement.
So we are working on replacing all older garden equipment and motor vehicles we and have. So far we have replaced two self propelled mowers bought on sale which are now an extra $230 ea dearer today, a ride on bought on sale that is now $1400 dearer today, and a demo model near new 4 cylinder LDV-D90 Suv. We partly funded these purchases by selling 1 older self propelled lawn mower, our old ride on lawn mower, an electric log splitter that was too small for our needs, a petrol branch shredder that was too small for our needs, some newer clothing we had grown out of and other equipment we no longer used in our home.
We have two priorities for hunkering down this year which are -
- First priority we are upping our savings to 11.64% of our net income, will bank any surplus funds we have in our everyday account from saving in other budget categories, and will also save any money over and above what is needed to maintain equipment from our side hustles will also to go towards buying a new car for me with cash. We are hoping that by the end of the year to have half the amount saved for my new car or more.
- Second priority - is once the weather cools a little here is to sand back and undercoat and paint the home windowsills and balustrades (the home is clad) and wooden garages, meat shed and tank stand shed bit by bit. As we use a tin of paint and the home maintenance fund builds up to buy another one we will do it that way.
We do this in our home by having what we call family counselling meetings as a husband and wife and work out what is the best way to achieve our goals. We also pray as well as we know that we are indeed blessed in many ways in achieving what we have achieved.
Things indeed are shaky out there and prices are rising so much on everything so we have done a new comprehensive budget for 2024 and allowed a 5% yearly increase on all the bill amounts we paid in 2023 to be banked into our high interest bills account each fortnight that earn us a reasonably high bank interest. That way when the bills come in the money is ready and waiting there to pay them.
Lorna (Australia).
Lorna, congratulations on becoming debt free, I'm hoping by this time next year we can say the same thing! Your plan is well thought out, doable and inspiring!
DeleteWhat is the difference between necessary expenses and living expenses?
ReplyDeleteChef Owings, good question! Necessary expenses are going to look different for everyone, what I consider necessary someone else might not. For the purpose of this goal, our necessary expenses are our bills, utilities, meds, etc. Groceries, auto fuel, spending money, etc, we consider to be living expenses because they are not fixed and we can control their amounts. Does that make sense?
DeleteYes it does make sense. Thanks
DeleteIt sounds like you and I both have very similar goals for the coming year!
ReplyDeleteDebbie, here's to both of us accomplishing those goals!
DeleteHi Patsy! I love your plan. We would have been on a very similar path for 2024 but we are having to pivot slightly. My spouse has just been diagnosed with severe osteopenia. We have a doctors appointment for this coming Tuesday the 2nd. That's when we find out what may be in store. Unfortunately our healthcare through my work has changed to a "high deductible" plan. So, waiting for the first bill that will have the special x-ray that was needed to diagnose the osteopenia. With that said. I've been a researching fiend on the topic and we are adjusting our diet to include an increase in calcium, vitamin d and then whatever else the doctors' may have in store. We still are going to maintain our goal of spending less and putting away a set amount. It probably won't be the stretch goal of 10% like yours for a fund. It may end up 5% or even 1% once we cover the medical bills. Im sure glad I found your website and we've "built" a solid basics pantry and I'll be seed starting for the garden when the time is right (I had leftover seed plus can get some from our local library for free). This is going to be a year of change in our household... I pray we can rise to the opportunities (challenges) and have a positive path forward. May you and your family be well this 2024.
ReplyDeleteRebecca, I'm so sorry your husband has gotten this diagnosis, I hope there is a treatment plan that will help him. I would do what you're doing with the research and would take your 'savings' approach as well. Do what you can, your husband's treatment should definitely be a priority. I'm glad you have a solid basics pantry; it really does make a lot of difference doesn't it when hardships come along. Our pantry has saved us many times; I honestly don't want to be without it. I hope 2024 is a better than you think year for you and your family.
DeleteTerri here from BlueHouseJournal blog. We utilized the snowball method 14 years ago to pay off all our debt. It's a hugely successful method. My goals will post next week but one of mine is like yours: save 10% of our income. I've always saved and set money aside for specific purposes but not for the sole purpose of savings. This is my intent this year.
ReplyDeleteTerri, I will look forward to reading your goals. I wish you success in your savings goal.
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