This year we have made a lot of progress with our financial goals. To find out exactly how much progress we’ve made, I put together an inventory of our major goals and noted the amounts we started and ended the year with.
As someone who diligently tracks our finances, and calculates our net worth each month, I was still blown away by how much we saved. Month to month it may not seem like we’re saving a ton, but over the course of a year it really adds up.
|Financial Goal||Beginning of Year Balance||End of Year Balance||Change|
|Save $80,000 for House||$41,586.71||$67,428.15||+$25,841.44|
|Save 3-6 Months Expenses in Emergency Fund||$9,422.86||$8,076.43||-$1,346.43|
|Pay Off Car||-$10,921.97||-$3,960.33||+$6,961.64|
|Save for Retirement||$34,424.46||$53,223.75||+$18,799.29|
Saving for the House
If you have been following this blog, you know that we are in the slow process of building our first home. It’s funny to think about how last year we were saying that we’d be celebrating Christmas in our new house at this time, when in reality we are still waiting to get our Board of Health approval.
The unexpected delays with building the house have turned out to be a blessing in disguise. Originally, we thought we’d be spending about $250,000 to build a house, but when the estimates came in, it became apparent that it would cost almost $100,000 more than that. We didn’t think it would be possible to save 20% to put down on the house plus closing costs, but with the delays, and our mad focus, it’s looking like we’ll be able to have enough saved by the end of the spring.
Each month we save $1,650 towards the house, and put additional money towards it when we get extra pay from coaching and the health insurance buyout.
Saving for the Emergency Fund
Our emergency fund is down a bit at the end of the year, but that’s okay. We’ve only been saving about $150 a month towards our emergency fund, but put extra money in when we can. Basically, we save for a few months, and then have some unexpected expense (usually car related) that we have to take money out to pay for. Last month, I had to get the front and rear brakes done on my car.
Paying Down the Car
Two years ago, we got frustrated with the endless car problems I was having, and took out a loan to buy a three year old car. The car payment is $289 a month, but we have been paying much more than that to get it paid off by this spring. I would like to have the car paid off by the time we apply for a mortgage. We have less than $4,000 to pay off still, so I think that it’s doable.
Saving for Retirement
Mr. Farmhouse Finance and I contributed the max to our Roth IRAs this year, and put a little into our 403bs. Mr. Farmhouse Finance has been contributing a small amount to his 403b for the whole year, while I just recently opened one. Each year, I hope to increase the amount that we contribute to the 403bs.
My husband and I are both public school teachers, so we will both receive a pension when we retire. I do not have to contribute to the retirement system anymore (because of my date of membership), but Mr. Farmhouse Finance will have to contribute between 3 and 6% of his salary for the rest of his career. I don’t include contributions to the retirement system in our calculations, but rather consider our pensions future income.
In addition to our major financial goals, I include many other accounts in our net worth calculations. Money is flowing in and out of various savings and checking accounts each month, so I wasn’t surprised to find that the yearly change in our net worth was within $120 of the progress that we made with our major financial goals.
In January 2017, our net worth was $93,471.67. Right now (December 2017), our net worth is $143,845.24.
Our net worth went up $50,373.57 in 2017. (To put that into perspective, between our teaching jobs, summer jobs, and side hustles we made about $140,000 before taxes last year.)
I am totally floored by this. Once again, the small contributions you make each month really add up over a year.
Create Your Own Financial Inventory
It was really eye-opening to create this financial inventory. The progress that we made this year will motivate us to continue saving and working towards meeting our financial goals in 2018.
If you’re interested in creating your own financial inventory, start with making a list of all of your major financial goals (savings and debt repayment). Log on to your different accounts and note what the balances were at the beginning of 2017, as well as the balances today. Subtract to find the difference, and then add up all of the differences to find how much progress you made in total with all of your goals.
If you have been tracking your net worth, you can do the same exercise with your beginning and end of year net worth figures. You may be pleasantly surprised by how much you have grown your net worth over a year.
If your numbers are not as impressive as you imagined, hopefully that motivates you to ramp up your savings and/or debt repayment in 2018.
Closing Thoughts and Goals for 2018
Even though we did not make progress with every financial goal, I’m quite pleased with the overall progress we made this year. We saved a great deal towards the house, and paid off a big chunk of my car loan, while continuing to meet all of our other financial obligations and saving for quite a few wants, as well.
Here are some of our goals for 2018:
- Save $80,000 for the house by the end of the spring (about $13,000 more to go)
- Pay off the car by the end of the spring (about $4,000 more to go)
- Build up our emergency fund to $10,000 (about $2,000 more to go) to start, and hopefully double that in the coming years
- Save enough for a European vacation next summer (about $2,000 more to go)
How much financial progress did you make in 2017? What are some goals you have for 2018?
Illusion of Scarcity Worksheet (PDF)
Download this free worksheet and start paying yourself first.
- Budget for financial obligations and recurring expenses
- Prioritize your financial goals
- Make all your transfers on payday