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Significant Goal Progress

August 2nd, 2011 at 08:44 pm

If we can keep this momentum (no really expensive surprises?), we are on track to do *awesome* with our financial goals this year.

Will probably:

**Put $10k into ROTHs (have never maxed out both?)
**Hit $30k+ cash savings
**Hit $199,999 balance on mortgage (30% down; 70% to go).

All of these goals have been YEARS in the making.

I'd be happy to spread out these wins a little, but for whatever reason it's boom, boom, boom. (On track to all be solid around 12/31).

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I had an interesting epiphany today about the mortgage. I am extremely hesitant to put extra to the mortgage, considering the logic factor of investing instead, and the past experience of tying too much up into the mortgage.

Epiphany? Last time I put extra to the mortgage, I didn't have a solid big picture financial plan. Meaning, I wasn't making retirement/savings a priority, etc. I believe it came about when we refinanced about the time my first son was born. When I went back to work, I resumed the old mortgage payments (extra principal). It was dumb. Our gross income had been halved, and expenses were rising with a new child. At the time, it felt dumb to not keep the old payment, but the truth was something needed to give.

A number of things have swayed me this year, and I think this was the final realization I needed. With ample savings and maxed out ROTHS, it's not dumb and I probably won't regret it. Clearly, my gut is telling me to pay more - so I will listen. (My gut always serves me well).

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Speaking of the gut...

I have been really intent to get to a cash savings level of $30,000, for years. Last year, I Was so intent on finally reaching this goal, than I started commiting $1000 per month to this goal. I had like $25,0000 to start? I didn't get anywhere. The more I saved, the more life threw at me.

This year, I threw up my hands. I give up! I reorganized my financial priorities, and suddenly it falls into the place. This is with extra mortgage payments, so is one reason I have made that mind shift with the mortgage. You can't argue with better results. The universe agrees with *this* plan.

Anyway, if no cash surprises arise in August (we usually charge everything, anyway), then our cash balance may hit $30,000 for about five minutes on September 1st. (Before the car insurance is due). No matter. I expect some car repairs, car insurance, and kids' dental visit to be charged this month and paid in Septmber. But absolutely nothing planned in October, so it is feasible to hit this goal for real on October 1. (Then again - BM Might be due for some expensive dental work - so won't get too excited).

The motivating note on my desk says:

$35,000 - 2002
$27,000 - 2003
$24,000 - 2004
$17,000 - 2005

Nope - I haven't had this much cash since I have had children. The note reminds me that the hardest thing we have found with this one-income/kid thing is lack of cash. Lack of cash = lack of flexibility. Lack of freedom.

It's all relative. If you asked most my friends, they'd wonder what the heck I have to worry about. (People are SO CLUELESS about money)! But seriously, ask any 30-something I know. $30,000 in the bank - what the hell? Live a little. Blahblahblah.

So, does this mean when I reach my goal that I will move on to other goals? More college savings? Taxable investing? Go hog wild?

Um, no. Got to keep chugging along. $5000 per year to cash savings. $8000 in years we use our medical deductible: every year?

$30,000 will break down approximately as follows:

$15,000 emergency fund
$ 3,000 medical deductible fund (2012)
$12,000 savings

Just about enough savings to replace dh's 10-year-old vehicle.

I haven't even started saving to replace my 6-year-old-vehicle.

The plan to buy a brand new house and not put money into it for a decade has worked out extremely well. But the decade is about over. More home maintenance savings is needed.

Kids are both on track for significant orthodontia.

Dh may want to go back to school.

We want to plan 2 big parties for our parents' anniversaries in the next 2 years.

& all of this will easily hit in the next 5 years (don't invest money you need in 5 years).

We don't borrow for things, and not sure how that would help anyway. Then I could just have a bunch of payments and have $0 for savings.

I prefer the flexibility of cash. Plan B is to not replace any cars until dh goes back to work (if have to - can live with one). Plan C is we are both content to spend $2k or $5k on a car - if that is all we can afford. Just depends on our financial picture when that time comes. (We've always done well with older cars - and frankly didn't pay that much for our current vehicles - both bought one-year-old).

Will keep adding to cash - doesn't seem like that will change for a long while.

I did wonder for a few minutes: This goal met? What next? But then I looked at reality. We've got a heck of a lot of expenses in the near-term horizon.

3 Responses to “Significant Goal Progress”

  1. ceejay74 Says:
    1312314859

    Awesome job. As always, you have great focus and a great attitude and outlook on things.

  2. Petunia 100 Says:
    1312332606

    Congrats, you are chugging along nicely!

  3. My English Castle Says:
    1312335067

    Reading your post made me think about how badly I want to get back to my 25K in the bank. We had over 30K, but various things--including our basement remodeling put a dent in it. When I get paid again in October, that's my first goal.

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