I have never been one to make New Years resolutions. I have in the past written down and achieved different goals, but they have never started on January 1st because it was a new year. I just jump right on and begin as soon as I have that motivation instead of waiting until “tomorrow” or “next week” or “next month.”
In the case of my “No” Spend November, I am so glad that I didn’t wait until an easier or more convenient time (or the new year). I waffled on pulling the trigger because of our trip to Hawaii and then the holidays, but our finances look so much better than if we had waited and continued on autopilot for another two months.
We have made such major strides in the last two months that I would not have even thought possible back in August when we had to dip into our emergency fund. I want to hold on to this momentum and keep it going through 2018, so I’m setting a big goal for us this year. I made the mistake after paying off my student loans of letting up on the intensity after the big goal was achieved, and I’m still kicking myself for the additional money we *should* have saved in the intervening 4 years. So this time, I am harnessing the success of the past few months and going to hang on to it for dear life.
2018 Big Goal: Achieve A 50% Savings Rate
We saved 22% of our incomes in 2016, and 23% in 2017, which should have been a bit higher, but life happens. Hence a 50% savings rate is about double what we have done in the past, but right at what we achieved for the month of November. I could have set a 30% savings rate goal for us, and I would be very confident in us reaching it (8% of our savings rate will come from pretax money that we never see in our bank accounts). 50% is a big, huge goal for us, and one I’m not totally confident we will reach, but I strongly believe in setting reach goals for yourself, because they will push you further than you would go otherwise.
In the past few months, we have both gotten raises, and that money will go directly to savings, but the biggest thing that will get us to that much higher rate is continuing to fight lifestyle inflation. It’s amazing how much money can be spent even without paying for cable, clothing, or other material goods. This year we will be spending money on what matters and cutting out the noise of what really doesn’t.
Did breakfast out every weekend taste good? Of course. But was it worth over $4,000? Absolutely not.
With a larger income (right about at median for our area) comes larger opportunities to spend money, but it doesn’t have to be that way. Putting away half our income will be so much more satisfying than any meal out.
So how do we plan to get there? To more than double our past savings rate, we have to be serious.
1. Continue to share our monthly savings rate here on the blog.
I’ve found that tracking our spending – and then sharing it – has made a huge difference in how I pay attention to day to day purchases, and zero spend days have become a game to drive costs down as much as possible. I will also update and continue the monthly financial posts to keep up on short and long term goals.
2. Keep cooking meals from scratch.
This was a game changer for us in 2016. We had really gotten out of the habit and it had cost us a ton of money over the past few years. Our food bill should be thousands of dollars less in 2018. I would also like to work on my baking skills to get to a point where we aren’t buying any bread products from the grocery store.
3. Max out my IRA for the first time.
It’s a little embarrassing to put this down because I feel it’s something I should have already been doing. Regardless, it is on the list for 2019 and I see no reason for it not to happen. We will hopefully get one set up and automated for my husband as well.
4. Continue my clothes buying ban.
Pretty self explanatory. I still have plenty of clothes and shouldn’t need any more this year, though some will get totally worn out in the coming months and get me closer to my goal of a minimal wardrobe. I will need a new pair of running shoes at some point, but I’m undecided on what I want to do about that. Unfortunately, that is one thing that isn’t so great to buy used or get as a hand me down.
5. Pay off our real estate investment.
I had originally hoped this would have happened in 2017, but thanks to our back to back to back months of extraordinary expenses, we still have a few thousand left to go. This should be paid off this winter and then we can be on to putting money toward the next one. Every quarterly payment we receive goes straight back to where it came from, so we don’t plan to keep any income from it this coming year. These payments will be key to our future financial independence, but the best place for them now is as a reinvestment, much like a stock dividend.
6. Visit the library. A lot.
I’ve been making a habit of visiting the library pretty much every week to load up on a giant stack of new books for our son. I’d like to keep track this year (even $1/book) and see how much we “save” by using the library. I’ve been most reading ebooks lately (still checked out from the library), but I’d like to get back to physical books. I currently have The Simple Path To Wealth on hold to read next.
Along with visiting the library, I want to search out more free entertainment for us near home. There are so many free places to explore that are just as much fun as things that aren’t free.
7. Get serious about travel hacking.
We have had our Alaska Airlines credit card for about 5 or 6 years now and have managed airline travel about once every 18 months through normal spending, but now that we have three of us traveling, we burn through points a lot faster, and we’d like to do bigger trips once or twice a year now.
It was totally awesome to pay $98 for 4 round trip tickets to Hawaii, and I want to do more of that. Bringing along my husband’s godfather as babysitter made the trip so much better and we hope to bring him along in the future. In order for more travel not to eat into our savings rate, we will be opening a few new travel cards to cover the miles we need. I’ve opened the Chase Sapphire Preferred* in my name and will be referring my husband once we meet the minimum spend.
We will celebrate our 10th wedding anniversary in 2019 and are planning to take a two week trip somewhere, and while we haven’t decided where yet, we’re seriously considering an overseas trip, which would cost quite a bit more out of pocket than we would want to spend. Travel is awesome, but only when we don’t spend a boatload of money doing it. Let me know if you have recommendations for a two week long trip in November; we are open to suggestions!
*If you’re interested in opening one of these cards, I’d love it if you’d consider to use my referral link.
So where do we begin?
Our pivot on our spending began slowly a year ago with reducing our breakfast and lunches out and replacing them with cheap home cooked meals instead, but our focus really began with the “No” Spend November I challenged us with. Writing down every single purchase and tracking no spend days made it clear where our savings rate really could be if we were intentional about every dollar we spent.
Today is January 1st and the Frugalwoods Uber Frugal Month Challenge begins for us in earnest. I hope that in having a very focused January, we will learn new ways to cut our base costs that will continue on through the rest of the year.
I am sharing our big goal everywhere – here on the blog, on social media, and in real life in hopes that this outside accountability will push us to do better than we ever thought possible. I’m excited to see what 2018 brings.
Do you have any big goals for 2018? I’d love to hear about them.