Update: Getting our Finances in Line in 2009

Now that we're through the first quarter of 2009, it's time for a little update:

We finally closed on the mortgage refinance (after a number of irritating set-backs on the part of the two banks involved), so that will help our budget in a big way from here on. That extra $200 of interest we DON'T have to pay now goes into savings!

We are sticking to a stricter monthly budget without really noticing much difference in our standard of living. It has been a nice surprise! Lance has been going out to lunch less and less, but he doesn't complain, which makes things easier on me. That was my biggest concern when we talked about cutting unnecessary expenditures like lunches out...I wasn't sure he'd be on board. But he has been, and that's such a relief!

We paid off Lance's school loan a few months back, and now that monthly payment has been rolled into other debts (my school loan and the home equity line, specifically). We're still on track to have everything but the mortgage paid off by December. And we're still prepaying the mortgage, which should be paid off in 2024.

We're stashing extra funds in our HSBC online savings account, and by the end of the year we should have about six months' worth of living expenses saved up! Having that big emergency fund will take a LOAD off my mind, since by that point we may be expecting. (Who knows?) Best to be prepared!

We added a new goal to the list: Start a Roth IRA by the end of the year. This goal is intentionally loose, since we aren't sure how much we'll have available to invest. I'm hoping to have $5000, but that depends on various factors (like whether Lance will have to take another pay cut, whether we both still even HAVE jobs, etc.). Regardless, we want to diversify our investments and have been flirting with the idea of a Roth IRA for a while. Time to take the plunge!

Our progress towards our financial goals is made even more gratifying because of how well we've done in spite of our recent circumstances. Lance had to take a 10% decrease in pay about a month ago. His company is very small, and business has been suffering. It's just a fact of life these days. But we're blessed that we both still have jobs and make very decent wages. The 10% decrease hasn't hurt us much. We're just that much more determined to stick to a budget and do what we can with what we've been given.

They say you don't appreciate what you have until it's gone. But I say you don't appreciate what you have until what you DON'T NEED is gone. Because of our stricter budget, I've forced myself to make more of our meals at home, and I've been *gasp* enjoying it! I never realized how much joy I could find in my own kitchen. Sometimes I spend hours in there just baking away. And to think I might have never realized my own potential as a cook had it not been for our change in circumstances. We're still living the good life and eating good food (maybe even better?), so it seems that what we no longer have wasn't really needed anyway.

God is good.

Goals for getting our "Finances in Line in 2009"

MoneySavingMom is hosting a discussion about financial goals for this year (click here to view), and I couldn't help but want to join in!

As my family members know, I've always been the type to budget. My budget is my financial blueprint. It's my boundaries and goals wrapped up in a simple spreadsheet.

I'm a firm believer in boundaries, especially when it comes to money. If I had no boundaries, I would spend with abandon and get nowhere fast! My financial boundaries are not stringent by any means, but at least they give me an idea of how much I'm able to spend and how much to lay aside.

I bought my little starter home (on my own) in 2003. Using a budget and careful planning, I was able to buy a new refrigerator, dishwasher, clothes washer, love seat, and privacy fence without paying a cent of interest. I utilized store credit with 12-months-no-interest programs. I was able to buy a new desktop computer and digital camera in the same way. All this on a very limited salary!

Then I got married. ; )

I've heard that finances are one of the biggest sources of contention in marriages today, and I BELIEVE IT! Lance and I have struggled to reconcile our differences for the last 4 years. It has not been easy. But we're finally working together, and we're excited about the financial freedom in our future!

Our main goal for 2009 is to completely pay off all our debts, with the exception of our mortgage. This covers: my school loan, Lance's school loan, the home equity line (on which we put the majority of our renovation costs from last summer), our Best Buy credit card balance (new stove bought last summer), and Lance's business debt.

Our secondary goal is to put as much into savings as possible. With our focus being on paying off debts, it doesn't make sense to be socking away a large amount into savings while paying interest on remaining balances. But if we pay off the debts earlier than expected, we'll direct the "snowball" of payments towards savings.

We've already taken a major step towards realizing our goals by starting the process of refinancing our mortgage. When the rate hit 4.75%, which is almost 2 whole points lower than our current APR, I jumped at the opportunity! We'll be able to save about $200 a month in interest while still paying extra towards principle every month in order to reach our long-term goal of paying off the mortgage by 2023!

It's also helpful that I started a new job last month with a 12% jump in salary. During this time of economic distress, it's such a blessing to not only have a job, but to have been offered a new job with a higher salary. I'm thanking God for His goodness! And I'm asking for His guidance in being a good steward this year with what He's given us. That's what it all comes down to...being a good steward and GIVING of what we've been given.

2009 should be a very good year.