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Get a peek into how we did with our goals for this year and see how you can do your year review and set yourself up for an incredible 2021!
Year-End Review and Planning for 2021
What a year, what a year! We still have a nother month, but most people I know are kind of winding down.
As we wrap up this 10th season, I thought I’d share a bit of our year end review. We started 2020 with three big goals. The first two happened at the same time – no the original plan- but we worked with it.
Hopefully it’ll give you some ideas with your own year end review and how to best prepare for next steps.
Speaking of next steps, I have some exciting news about the podcast that I want to share. Love to get your take on it.
You ready? Let’s get started!
Resources to Make Money Less Stressful
If you’re overwhelmed and looking to smooth out your money system so you can focus on the big wins, here are some helpful resources to check out!
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Jumpstart Your Marriage and Your Money
- Why You Should Design Your Life Before Reaching Financial Independence
- How Much is Enough Money? The Levels of Financial Autonomy
- Designer Kitchen on an IKEA Budget?
- Buying a Car: What You Need to Know to Get the Best Deal!
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union. If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today!
We've been members for years and love their service and competitive rates on checking and savings accounts!
2020 Year End Review
Let's start off with our goals for the year:
- buy a replacement car for my husband, Rob,
- redo our kitchen and then
- put a significant dent into our mortgage
Right off the bat, you could see that these are huge goals. So we knew that this year we definitely had to hustle.
Goal #1: Buy a Replacement Car for Rob
Thankfully we're at the point that our only debt is our mortgage.
So most of this was saving up ahead of time to hit these goals that happen to align this year.
The second part, especially for the first two is to make sure we're getting the most value out of the money that we had saved.
The first big purchase of the year was replacing Rob's car. The original timeline was to wait to the middle, maybe towards the end of the year to get that done.
Right in January, though, we had an incident while he was commuting to work where we realized we needed to get this done much, much sooner.
It made things a little complicated because at that time I was already ordering materials for the kitchen renovation and finalizing which contractor that we're going to go with.
Since we've been talking about this and already saved up, though, we could go ahead and move forward.
Because his car is strictly used for commuting to and from work, we started looking at hybrids.
However, there are some specific preferences that Rob had that made it a little bit more of a challenge.
He definitely wanted a hybrid and not an electric. So options like the Nissan leaf was taken off.
Then he hit me that he didn't want a Prius. This significantly cut back on the options that we had.
We decided that we were going to expand and look for very fuel-efficient cars and hybrids.
Our budget for this replacement car was $10,000 and that's the same that we had when we got the Honda accord. We found and bought his car for a little over $8,000.
If you want all the details on the process, I did a whole episode about it on Simplify and Enjoy Podcast.
To give you a high-level view of the process we took, here what we did.
We looked at both buying directly from private owners and dealerships. Previously, we had gotten our cars through Craigslist, talking with owners, and through our network of friends. So we were comfortable with that.
One big reason we decided to include dealerships with this particular hunt is that our credit union Coastal has a really good program with some of the dealers in the area.
It's designed to help make financing as such, but even if you're buying outright, as we did, you can get some great information there.
So with our budget, a list of about three particular models of cars that we were looking at and the mileage that we wanted to go under, we were able to find several different options in the area.
Because we were with coastal and we used their tool, when it came to negotiating the price that was already established through their program, which made negotiations much simpler and quicker.
Reflecting on Buying a Car
Now, of course, looking back at how 2020 has unfolded the second car, just kind of shake our heads.
Overall, though, we're really happy with the car that we have great gas mileage.
We went with a Nissan Sentra, which definitely fits the bill in terms of lower costs for maintenance and when we are traveling lower costs for gas.
In case you're wondering how we were able to buy a car outright.
The quickest answer I can give you is what we've done is we save up ahead of time and we basically set aside a car payment each month into the savings account.
We prefer this method because it gives us so much more flexibility. We can pause or cut back as needed, but really what's great about it is that we can set aside how much we're comfortable with for the car ahead of time.
And when we started these transfers into savings, they matched the payment we had, which was about $230, $240/month.
With our cars being reliable and spending so much time researching low maintenance cars, we've lowered the transfers, going into savings and redirecting it to some other goals.
Goal #2: Kitchen Update
One of those places where we redirected to that money that was going into the car, was into our kitchen fund.
We knew we wanted to renovate our kitchen for a while. There are a lot of things we love about our house, but when we bought it, we knew that at some point the kitchen would need a refresh and an update.
On the plus side, overall, the layout and location of the kitchen were fine. The cabinets solid wood, and most of it was good. However, there was some water damage and since it was one large piece, the whole thing would need to be replaced.
Once we moved in and were living there with our two kids, there were some other quirks that we added to the list.
The oven was showing its age. We started with three working burners. I think at the end, we had two and an unofficial warmer.
The corner space of the lower cabinets was practically unusable. And we had upper cabinets over the oven that block light and made it harder to chat with any guests that we had in the dining room.
The built-in pantry cabinets on the back wall had plenty of storage, but the location made the space feel cramped.
Finally, we had two different floorings between the dining room and kitchen, and we really just wanted that to be one level floor.
Thankfully, none of these were emergencies where things immediately had to get replaced.
So what we did is we started saving for us. We prefer to have cash on hand before we tackle a house project. Again, we feel like having the cash on hand gives us more flexibility when it comes to negotiations.
If you have a home project, a big one that's coming up and that you want to be prepared for, I recommend checking out the episode we did on Simplify and Enjoy.
It talks about the costs, shopping around for appliances flooring, and cabinets – all the details there to give you a big picture view of how we approached it.
I will say that the project took a lot of legwork and plenty of spreadsheets. Which I enjoy.
We sourced our materials from Ikea Lowe's, Amazon Wayfair, the local family business to find both good deals and what we truly wanted for this kitchen.
Since our previous contractor that we use for the basement moved out of state, we had to search for someone else.
Our friends had some great recommendations and we found a fantastic guy. He did most of the heavy lifting, but we assisted where we could to keep things on schedule and on budget.
Our contractor showed us how to install tile with our kitchen backsplash. We're really happy with the kitchen, both with how it looks and how it functions.
The space feels bigger. There's more light coming into it. And when we have visitors again inside the house, it's a great space for entertaining.
Now the total cost for materials, labor to appliances was around $10,000.
We definitely feel like we got our money's worth. And if you love looking at before and after pictures, I will share those in the show notes for this episode.
So there you have it. At the beginning of the year, we had two large projects and looking at the cost that was $18,000 out of our budget.
That's definitely a significant amount, but because we saved up ahead of time, we don't feel stressed out with these debt-free purchases.
Goal #3: Pay a Significant Amount on Our Mortgage
Out of our three goals for this year, this last one speeding up our mortgage payoff date has shifted just a bit considering what's happened this year.
When we bought our house almost five years ago, we went with a 30-year mortgage and had a great rate.
Those first few years we used the extra money to spruce up the house, for example, updating the basement so we could use them as workspaces and making it feel more like a home.
As those projects were tackled, we started looking longterm. What did we want? One of the things that we consider important to us was reducing our debt load.
Again, this is a very personal choice, especially when you have low interest rate, how aggressively do you want to pay it off?
We wanted to make sure first that we took care of saving and investing for retirement and that we had a savings buffer should something come up with the house (it's over 50 years old).
We then decided to look at our mortgage where we comfortable having this mortgage for 30 years. After discussing it, we've decided that we do want to speed up the mortgage payment.
Honestly, if it were solely up to me, I definitely would go the more aggressive route and just get it out of the way. But the concern for my husband is that something pops up and we don't have the funds to absorb it because we put it all towards the mortgage.
And then March rolls along and the rest of 2020 unfolds.
So we definitely have switched up our approach this year to make sure that we strike that balance between paying it off faster, instill still having some cash on hand. Should something happen.
To come up with a plan that we're both happy with that running the numbers with some spreadsheets.
Happily, my buddy, Andrew from Family Money Plan has put together a fantastic mortgage payment spreadsheet and guide.
We could quickly and easily adjust it, which we had to do because I had a plan at the end of 2019 for this year. But in the spring time we decided to, to redo that plan. So here's how we're approaching, paying off our mortgage faster. The easiest way is to start by boosting up our mortgage payments simply by rounding them up those first few years that you have a mortgage.
If you look at your actual payment, a lot of it is going towards interest. So any extra that you can put in towards your principal payments can speed up your mortgage payoff date.
We've done this from our first mortgage payment, the second part, and to address my husband's concern, especially in an uncertain time like 2020, we've decided to look quarterly for larger payments that will go straight to the principal.
This money comes from different sources. It could be tax refunds, bonuses, stimulus payments. This year that we got any savings we made from doing a monthly money challenge.
All those things go into savings and that we keep until the end of the quarter. And if everything looks good, we then can make that payment to the mortgage.
With this new payment system and being more aggressive with our mortgage, I have to say, overall, I'm happy with the progress we're making, especially when you consider what's going on this year in 2020.
Now as we look at 2021 and see how it unfolds, we're going to make adjustments. And that's the great thing about having plans. They're not set in stone, you have a goal and you have an idea of how you're going to approach it.
But if you need to pull back or push forward, depending on the situation with what fits best for your goals and your circumstances.
Key Takeaways on Year End Reviews
I hope getting a glimpse at how we did with our financial goals gives you a better idea of how to do your year-end review.
Before we wrap up, I just want to share a few key tips that I think could help you as you wind down and review your year. And be prepared for the next year.
Have monthly check-ins.
I'm a big fan of monthly money dates, but even if you guys want to skip the budget, it is absolutely crucial for the two of you to have a way to check in throughout the year with how things are going.
This year has been especially challenging for many. And you may have found yourself needing to adjust your budget, your schedule, your take to day routine because of what's going on.
Having these monthly check-ins with each other, how's it going? How are you doing is absolutely helpful. And then including the finances can make things go smoother.
But if you haven't already set aside a time, it could be the first weekend in the month. It could be the last Thursday of the month. It doesn't matter in particular the date, but that you're consistent with us.
Create a plan or your goal and work backwards,
Try to make these goals smart in a sense of very specific it's measurable.
You're not paying off debt. You actually have a certain amount that you're trying to knock out. That it's relatable and relevant to you, and that you have a timeline that you want to approach it.
You're more likely to reach your goal because you're able to work backwards with that information and create a step-by-step plan.
And here's the thing. If you have a mix-up or a hiccup, because life happens, your whole plan, isn't thrown off, you can simply adjust it just a bit to accommodate whatever came up.
That kind of ties into the last takeaway.
Automate your finances.
The two of you may have started off 2020 with this idea of paying off debt, but then when the pandemic hit, things started to close.
You may have seen that your income drop or had changed. And so you went into savings mode makes perfect sense. And you're automating your payments. It's not too much of a hassle, many times.
You simply just cancel those extra debt payments and redirect them as transfers into your savings.
The important thing is that you have a forward moving momentum.
If you need to be pivoting, then that's what you do, but you already have a system in place so that your money is going towards the people and the projects and the goals that matter to you.
Pivoting the Podcast (and More!) for 2021
It's really what I want to do here on the podcast and on the site all through 2020, I've been thinking about it. But my conversation with Jason definitely solidified it.
My goal with the podcast and the site and the videos I put out is to make it easier for you to find whatever resources and tools you need to hit your goals, whether that's paying off debt.
Saving up for a big dream of yours or pursuing your own path to financial independence as you .
I have two podcasts going on here at couple of money where we focus on marriage and money and then simplified, enjoy, which talks about family and financial independence. And I really enjoyed those podcasts.
They've given me an opportunity. To learn and meet new people. The reality though, it takes a lot of work to get both shows done. And even as I tried to stagger this year with the schedule to make it more manageable, I discovered for me the best way for me to help you with your goals and make sure that it's the best that it could be is to focus on one show.
Now we've talked about goals and reviewing things and the need to make adjustments and pivots. And that's what I've decided to do. The original idea behind having two podcasts in the first place was one. When I started couple of money, it was just the two of us. It was my husband and I trying to figure out a way to work together.
As a team with our finances. And then it started evolving. We became parents. We had concerns how much it would cost to raise a baby and kids. And so that got incorporated with that and then simplify and enjoy it was us and continues to be us. Blurring what financial freedom means when you're raising two young kids.
The second reason why I wanted to have two different podcasts is having that second separate project also gave me a little bit of permission or freedom to explore different things, including video at a certain point. And I can't tell you when I felt like there was an expectation on the site that I only could focus on that intersection of marriage and money.
Hearing from you though, and looking over at the topics that we're going to be covering in 2021, I believe the best path forward is combining what I love from both into one show. I really want to explore how family and finances interact between couples, parents, and kids, your friends. Your extended family.
I want to help you and other families approach finances more holistically so that you can have less stress and more options, because I know you have more goals than justify dances.
We'll still discuss different methods you can use to pay off your debts faster, but we're also going to dig into weighing the pros and cons of taking on a side hustle.
If you're a parent, how do you balance knocking that debt out faster with still spending time with your kids?
Cooking at home can save you some serious money, but what if neither one of you likes to cook? That was us at the beginning of our marriage. I had the nickname microwave queen. So how do you make that transition?
How do you make cooking at home – dare I say – fun and exciting?
I'd love to share five key meals that you can make in 20 minutes that are remixes. If you have kids at home, how do you get them to level up their cooking skills and become the sous chefs in the family?
Saving up for travel, which hopefully will come sometime next year? That's great, but let's also look at some incredible spots to visit that are family and budget friendly.
Basically, I want to talk about pursuing financial wellness and not just independence.
As a reflection on the pivot in topics and broadening the scope. I'm going to retire the name, the couple money podcast.
And in January, this is going to become The Simplify and Enjoy Show.
These past 10 seasons of the podcast I love and they're still going to be available through this feed.
I want this new season to be guided by you, your questions, your ideas, and feedback are absolutely crucial. I'd love to hear from you!
So if you haven't already please join the community. It's free. It's fun.
Plus over the next few weeks, I'm going to be sending some previews and ideas that I have. Are they things you're interested in? I want to know what works for you and what doesn't.
So, if you want to be an insider, if you want to be a part of the community, get the trailers, the video preview sent straight to you!
I know this has been an incredibly challenging year for us, whether our finances were in a good spot or not.
As we wrap up the season, I want to say, thank you so much. Your support means so much.
I'm so grateful to have you a part of this community.
I hope you and your family stay safe and enjoy some much-earned downtime.
I hope you have a wonderful week and the rest of the year. Please take care!
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