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Today we’re wrapping up the season with how to overcome setbacks and plan for your best year!
Financial Wins, Overcoming Setbacks, and Planning for Your Best Year
How has this year been treating you? To be honest, things have been a real roller coaster.
We've made several trips this year to visit loved ones in the hospital, nursing homes, or just to check in on them.
We've also had a dear friend lose her battle with cancer this past week (hence the delay on the finale).
I appreciate having this option because I know years ago when we were in debt, this wouldn't have seemed possible.
It's made me more determined to continue helping families be in a better spot with their money so they can have more options like stepping back.
I hate when money is a source of stress when you have bigger things to think about.
With that in mind, today’s show is focused on how to do a year-end review.
In this episode, we’ll get into:
- Our progress on our goals for the year and doing a revie
- What to do when you have a set back with finances
- Why families need to simplify and enjoy
Hope you enjoy!
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Resources to Track Your Money L a Pro
Want to stay on top of your money without stressing over every penny? Here are some resources to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Automatic Saving:
- Free 401(k) Analysis:
- Jumpstart Your Marriage and Your Money
- Simplify and Enjoy
- 5 Books to Motivate and Guide You to Become Debt Free Faster
- 5 Money Books for Couples Looking to Become Financially Independent
Why You Need to do a Year-End Review with Your Money
Since it's December, we did a year-end review of our own progress before coming up with next year's plans.
When we began this year we had three main goals we wanted to tackle.
- Take more family trips.
- Renovate the basement.
- Pay extra on our mortgage.
And we made progress on all of these.
While I didn't get what I was hoping for and wishing for with a family trip abroad, I am glad that we were able to take several trips together (including Denver, Charleston, and a Florida getaway) throughout the year.
Our basement renovation was our biggest expense by far (around $11,000).
This year we had the perimeter walls insulated, electrical done, and drywall installed. We also have painted and we're assembling room dividers so my husband can move his desk down and have a home office space.
We'll have a dedicated area where we can work from home and still be separated enough that the girls don't interrupt on calls (or recording the podcast).
Between the family vacations and taking care of the basement, we didn't have a lot of extra money left over for the mortgage.
What we did is we rounded up our mortgage payments and sent that in. While it might not seem like a large amount we are shaving off 6 years on our mortgage (saving us over $21,000 in interest payments!) and paying it off sooner.
All in all, we're happy with how things have went.
Besides our big goals, part of the year-end review involves getting a look at all of our accounts (checking, savings, investments) so we have a big picture review.
If you've done a money date, then you have most of what you need for your review.
We tend to focus on two big numbers – our net worth and our monthly cash flow.
Our net worth number gives us an idea of whether or not we're moving in the right direction.
Our monthly cash flow let us know if we need to adjust things with our budget.
Sometimes you'll notice that there is a trend where a bill is going up and it might be time to read negotiate or it might be time to adjust your budget.
Maybe your power company has raised rates. Are there ways you can cut back and save at home? Or is this something that you just need to account for in your budget?
And there you have it – a year-end review of your money that doesn't take up much time and is still effective.
Overcoming Financial Setbacks
I'd love to say that you're going to make all your money goals this year or beyond, but the reality is they're going to be times when we have setbacks with our finances.
How we handle them can make a huge difference with whether we quit or we push ahead. So I want to talk about some common setbacks couples have when it comes to their finances and how to deal with them.
The first one is tackling too many goals at once. Many couples find that the problem is they have too much going on.
Yes, we want to pay off our credit cards. We want to save for trips. We have an emergency fund we want to stash away. ( and we need to save for retirement!)
While it's fantastic that you want to tackle everything, if you want to be effective, you need to set one or two main goals for the year.
What happens is is that you're directing your money towards a few goals and you're going to make more progress on them.
I think a big reason why Dave Ramsey's baby step process works it because it gives you a clear path and you're focusing on one goal at a time.
Now that doesn't mean you only work on one goal per year but you focus on one at a time.
If you are getting your emergency fund set up you focus all your money on that and then you can now direct that money towards paying off your debts.
Another setback couples have with their finances is that they've set ambitious goals but they don't have a clear path on how they're going to achieve them.
A lot of us get this advice – Dream big and even if you don't make your specific goal you're going to succeed.
That's not always the case. You can get really discouraged if you're further back than you've planned with your goals.
One of the best ways that you can set big goals while still having a big win is making sure that you have a plan to get you there.
If you remember our last episode, we talked about SMART goals where you set a specific number but also you have something that's measurable and it's something that's achievable.
So if you have fifteen thousand dollars of credit card debt and you don't have a path on how you're going to pay it off this year, then scale back and focus on one or two of the credit cards.
Maybe it's earning a little bit extra with the side hustle, maybe it's cutting back on expenses, but by focusing on having a how on your path you're more likely to achieve it and to stay encouraged.
Finally the last big hurdle that many couples have when it comes to their finances it's outside circumstances.
It doesn't get talked about enough in personal finance space because to a degree I do understand sometimes we let that become an excuse.
We do have to acknowledge, though, when life happens and we do have a setback sometimes we need to take a pause and adjust our goals.
So if you had a case of when your kids got sick or you lost a job or had your hours cut give yourself some slack, talk about it, and then adjust your goals.
If you have any questions about a particular setback that you're having, please join our community over on Facebook called Thriving Families.
We support each other with our goals and encourage each other when we have setbacks. Love to see you there!
How to Simplify and Enjoy Your Money, Home, and Lives
So you've heard about this week. And to be honest 2018 has been just for lack of a better word eventful.
Besides losing our dear friend Cathy we've had several family members dealing with chronic health issues.
We've been making trips to see loved ones at the hospital and nursing home or just to check in on them. And from hearing you in the community a lot of you are dealing with this maybe not the specific circumstances but this idea.
We have a lot on our plate. How do we juggle it all?
I’m guessing if you listen to this personal finance podcast you might listen some others so you've probably heard this term – financial independence.
For many it means being able to retire early.
It's pretty popular and a hot topic right now, but what's more important to me is talking about financial freedom and what that specifically means for families.
I think there are a lot of core principles with financial independence that can be very helpful for families especially when you have young kids.
Unfortunately I don't see enough discussion within the FI/FIRE community about how does your day to day look like when you're raising young kids.
What choices are you going to make now to not only get to financial independence in the future but to give yourself buffer now and enjoy the time you have with your family.
So for 2019, here’s what I’m doing.
Here on couple money we will continue to be focused on how to work together on that path of financial independence – the conversations to have, the tools that are out there, and strategies that have worked for other couples.
However, finances are only one part of the equation. There are many skills to learn, tools, and tactics you can use to become financial free and eventually independent while raising your kids.
And that’s going to be my focus on Simplify and Enjoy.
We’re looking at the big picture with how you can simplifying your finances home and loves. We’re also going to dig into the challenges and choices families make when pursuing FI with little ones.
Are you or your spouse going to take a break from full time work to be with your kids until they are old enough for school?
Dropping income definitely affects your timeline so where do you draw the line?
How do you slash expenses while still providing special experiences for your kids? Yes, there are some fun, frugal, and sometimes free activities you can do, but there are kid related expenses.
The point with Simplify and Enjoy our focus isn't who can get to FI the fastest or who’s the most frugal. It’s about providing the tools and ideas so you can cut out the unnecessary noise and build a life that you want for your family
So if you’re interested, you can sign up here!
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Like the music in this episode? Our theme song is by Gentle Regime. Additional music by Lee Rosevere.