2015: The Year of Growth and Better Habits
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With so much going on this upcoming year, I was looking for a fun way to build our finances in 2015.
To help keep us accountable for this year, I've signed up for MoneyStepper's 2015 Savings Challenge. I can't wait to see how things go this year for us.
In case you haven't heard of it, the two main goals of the challenge are:
- Grow Net Worth
- Save % of Net Income
I already sent in our annual goal and every month we update our progress.
Filling out the spreadsheet, I went back and forth a bit with it. I want to be ambitious, yet considering the big changes I was a little hesitant to go crazy.
In the end though, I decided better to be optimistic than play it safe. After all it's supposed to be a savings challenge 🙂
So for 2015 we're shooting to increase our net worth by 25% and have a 15% savings rate.
To keep our joint finances easy to manage and respect my husband's take on things, I came up with a plan that would put us in the ballpark of getting it done.
The Plan to Achieve It in 2015
If you've been listening to the podcast this past week you know that I'm into not just making goals, but creating and changing habits.
With that in mind, I'm going to get into how we are going to make this happen.
Grow Net Worth by 25%
Pretty much people can increase their net worth in two ways:
- increase income
- decrease expenses
We plan on tackling both this year – we will be saving more in the joint accounts and we will be paying off the last student loan.
Make Savings a Monthly Bill
For the assets we want to bump up savings and we have a couple of reasons why we'd like to have a larger than normal balance.
First off, we are still awaiting the arrival of our second kid (due later this month!).
We've saved enough to cover the hospital bill and some other essentials.
While we have a general idea of what expenses can be based on our first child, there's still a big unknown as my work schedule will certainly change with two little ones.
We have pseudo-plan for what we'd like to do, but only time will tell if it's a practical system.
Having some money set aside can be a huge stress reliever as we make this transition.
Second. at some point this year we'd like to sell our current place and buy
Our goal is to reduce our monthly expenses in the long run, so it would mean having a substantial down payment for the next place.
With the new year, it's time to increase my investment contributions. It won't be much since I'm focusing on other things, but it'll be nice to do something productive on this front.
Pay off the Student Loan
With liabilities, this is the year we finish off the student loan.
We have been sending in extra payments twice a month in addition to the regular monthly ones, but things have been on automatic and we haven't pushed ourselves on it.
Things had slowed down and it was mostly due to loss of urgency on our part. The interest rate being as low it is didn't really make either one of us feel like we had to get rid of it that much faster.
To accomplish this I will be changing the extra payments, bumping them up 20% and making them weekly. That will speed things up, but it won't be enough to pay it off by itself.
What I'm working towards is building up the business income and using the growth to take care of student loan.
Just why are we putting the energy on big quarterly payments with the student loan? I think the main reason is that this year will be a bit hectic and more unpredictable with the new baby and work arrangement.
While I have every intention to work hard and get my business growing, I have no idea how things will actually play out and I'd rather have some cushion around to ride out any rough patches.
Save 15% of Income
This is a more direct goal – we just have to commit to the plan. We will dump this money into a high interest savings account and access it as needed for both the student loan and the house down payment.
We're making this a regular part of our monthly budget by scheduling automatic transfers into joint savings.
Thoughts on 2015
Okay, shared some of our goals this year; your turn now 🙂 I'd love to hear from you – what are your big goals for this year?
How do you plan on achieving it? Are you doing the Money Stepper Savings Challenge?
Sounds like you have great goals for 2015! Our financial plan for this year is really just to stay the course and not mess up the progress we made in 2014 :).
We want to continue our savings rate (65%+), max out both of our 401Ks again, and just generally keep living on our happy frugal autopilot. So, nothing revolutionary, but just hoping to be able to continue on. Best of luck to you with baby #2 :)!!
Great goals and savings rate! Hoping with the student loan out of the way by year’s end we can focus on our investments in 2016 and beyond.
But for now, just waiting for the baby to arrive 🙂
Awesome Elle – I love how you have combined the challenge with more specific goals in certain areas of your finances!!
Thank you; just trying to break things down in manageable chunks. I want this challenge to be a success. Love the podcast!
We only have one small loan remaining, and we’re just making the minimum payments but it’s nice to see the balance get smaller and smaller. It’s to the point that, probably not this year, but maybe in 2016, we would consider paying the remaining balance off.