Today I’m talking about a semi-controversial topic, money! I am no financial expert and have no experience but my own (and Brandon’s!), but I thought I’d share some tips that have really been helping us reach our goals faster, stay financially motivated, and avoid stressing or arguing about money!
Our biggest influences have been Dave Ramsey (his show and books) and YNAB (the book written by the creator of the YNAB budgeting app we use). Below I’m going to share the tips that have been working for us and how we put these concepts into practice!
Identifying our goals
When Brandon and I started dating and quickly realized we’d spend the rest of our lives together, we decided that our big goal was to build a dream house. Every month without fail since Fall 2021, we have worked towards this goal whether it was paying off debt to free up more of our monthly income or saving directly for the house. Now that we’re debt free and just saving up for the associated costs of our dream house (closing costs/contingencies), we have pushed our goal further. We want to pay off our next mortgage as soon as possible, so we can return to the peace of owning our home! It really makes the economy, job security, and inflation less stressful when we don’t have a large payment coming out each month.
Having a big goal also makes all other financial decisions easier. We can weigh options in terms of whether doing or buying something gets us closer or further to where we want to be!
“Say no, so you can say yes!”
Having goals is a great way to keep our priorities straight. With our goal of having our dream house built and then paid off as soon as we can, we are willing to delay gratification and make some short term sacrifices. For example, we have one trip later this year that we already saved for but besides that, we don’t plan on doing any big travel or family vacations until we are mortgage free again.
This is also something we’ve been keeping in mind while we design our build. Once we work with the builder, we’ll go over the cost of certain things we like and determine what makes sense to do now versus later. I know people say it’s best to do everything at build time, but it’s way too easy to become house poor and in a bind due to YOLO when you’re designing a house!
Finally, next month we are saying no to our typical restaurant budget or any personal spending money, so we can say YES to cash flowing an unexpected dentist bill while still meeting our monthly savings goal. We’re already missing our favorite restaurant, but we’ll just go the following month!
No more debt!
We didn’t really go into our financial journey with a goal of paying off all our debt. In fact, we were prepared to carry our loans out to their full terms to fully focus on our dream house! Last year when we realized that we could use our land equity as a down payment, we paid off our house with some of the cash we had on hand. This big move then inspired us to go ahead and get rid of our next biggest debt, a Jeep that didn’t get driven very often. At this point we were definitely listening to Dave Ramsey and starting to get influenced. We decided selling that vehicle would be a good decision. Next up was paying off my car. I had more than the $1k emergency fund that Dave Ramsey recommends having during Baby Step 2, so I paid off the remaining balance of my car despite the 0% interest. Paying off debt just felt so good! Brandon soon after paid off the little bit left on his truck, and by that point all that was left was a student loan. For a few months we decided we’d wait for a decision on the student debt forgiveness program, but we didn’t like having our lives and financial future tied up by people outside of our control. Instead of buying something fun with our bonuses from work, we eliminated our final loan and became debt free!
After all of those changes, we decided that we will not be taking on more consumer debt with cars or kids’ student loans. If we have an unexpected expense, we will have to pause on our big goals and either budget for it or pull from our emergency fund (then replenish it of course!).
YNAB: our budgeting app
This past year, we transitioned to a budgeting system called YNAB (you need a budget). Before, I’d been using Google Sheets and Brandon was using a boring looking open source budgeting tool. When we contributed money to our individually recorded house fund, we then updated our shared house fund to reflect the combined balance. There wasn’t a good way to see our category balances or record transactions on the go, since both methods worked best on our laptops. We knew there had to be a better way, but neither of us were sold on the other’s method! We decided to try a couple of new (to us) systems like Mint, Every Dollar, and YNAB. YNAB turned out to be the most confusing to learn, but it has the level of granularity that works best for us. It does have an annual cost, but we set aside $8 towards it each month. It has paid for itself with all of the time and energy we now save when managing our budget.
Sharing our budget
The way that Brandon and I are able to manage our money as one team, you’d think we had a single joint account. We actually have a few accounts each, and none are shared! All of our accounts link to our YNAB budget, so our paychecks comes into one ‘Ready to Assign’ category. We treat it as our money to assign to our budget. This has helped relieve the burden and stress that comes with whose card we use, who should be paying, etc. Before YNAB, I would get stressed out if a few unexpected items were bought with our groceries because those weren’t in ‘my’ budget (I covered groceries while Brandon covered any eating out). Now, if we go to Walmart and buy house maintenance items, groceries, and maybe something fun for one of us, there is no stress. We can split the transaction into different categories of our budget and not worry about who paid for what.
It’s also helpful to have shared accountability and responsibility. ‘We have X dollars left in our restaurant budget for the month, what should we do?’ vs ‘I can’t keep spending this much money on us eating out!’. We’re both able to see what our expenses are and work together to problem solve.
Budget for the entire month
We’ve also worked to get our budget one month ahead. This is a big principle in the YNAB system. On the first of the month, we have all the dollars we need to pay for the month’s expenses. This makes it so much easier than the previous system where I’d budget for the next two weeks. We can spend the bulk of our grocery budget in one trip and know that the other trips throughout the month will cost less and balance out.
Short term goals/sinking funds
While we take a lot of inspiration from Dave Ramsey, one area where we haven’t followed his rules is with credit cards. We don’t necessarily like credit cards, but they are convenient for us and we always pay them off each month. Since we use YNAB, we know that our money must come from a budgeted category which also takes away the mindlessness of credit cards that makes impulse buying easy.
Anyways, each month we get a decent inflow of extra cash through credit card points and our savings account interest (one perk of saving for a house!). Currently we are putting this into a small savings fund so we can save for a baby in the future. We treat any extra inflow of money (meaning not part of our paychecks) as change like you’d find in a couch! There’s no pressure that it has to go to a certain category or go towards our big goal. Some months, maybe we’ll put it towards something boring or decide to just spend it. But having a smaller, short term savings fund is a great way for us to stay motivated while working towards our long term goals. In the future, we could use this same method to save for furniture, a weekend getaway, or maybe a couples massage!
I hope you got some good ideas or motivation from this post! Our financial health has become very important to us since we associate it with the freedom to do certain things in life. If you’d like some financial podcast ideas, we like to listen to The Ramsey Show, Smart Money Happy Hour, and Caleb Hammer’s Financial Audit videos on Youtube! If you have any tips to share, leave a comment below!
Thanks for reading!
Davien
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