June Personal Finance & Net Worth Update

This will be the first of my monthly personal finance updates.  I decided to do this as a way for me to keep track of our progress and to allow others to see the progress we make and how we do it in hopes to motivate and educate others on their own personal financial journeys.  I'm also betting this will help motivate me more to make a big impact from month to month.

If you have been following my blog, you probably already know that my husband was unemployed for over a year, which has prevented us from being able to make much progress.  However, he just started a new job about a month ago and we are hoping we will be back on track to paying down our debt in the next month or two.  Even with him being unemployed, we were actually able to pay down $2,000 in debt in the last year.  I know this isn't much, but considering we were not at all prepared for his job loss and we still managed to pay some debt and not take on new debt is a win in my book.  Our future goals include (in this order):

1. Get completely caught up on our monthly bills (currently only behind on our electric bill).  
2. Build our buffer back up in our budget.  If you're not familiar with this, see my post here.  
3. Start saving for necessary emergency funds (car repairs, emergency fund, etc.)
4. Pay down our debt.
5. Increase 401k contributions and look into other investment options. 
6. Retire early, buy an RV and travel the country.  Our goal for this is 3 years from now, but I realize this is probably unrealistic unless we fall into a lot of money between now and then.  

One thing I can't decide on is whether to buy a house at some point.  I know from lots of research that we could buy a house or condo and our monthly payments including tax, insurance, and hoa fees would be less than we pay in rent.  But I also know that our ultimate goal is to sell most of our belongings and live in an RV travelling the country.  With our current credit rating, we wouldn't be able to qualify for a mortgage now, so we can't buy a house anytime soon.  I'm thinking when we get to the point where we are credit worthy, I will then look at our overall finances and figured out how far we are from our retirement goal.  If it's still several years out, then we could go ahead and buy a house because we will have enough time to build up equity in it before selling.  

So here is where we stand as of today, our starting point (it's not pretty):

Right now, we're just working towards a $0 net worth and that's just sad.  By the way, this was taken right from from my YNAB budgeting software.  You can learn more about it here.  

Budgeting Without Stress

Not everyone loves to budget like I do. I have always liked playing with numbers, figuring out ways to save money, looking for the best deals, etc. However, I always struggled to find a budgeting system that I can really stick with. I recently ran across YNAB (You Need a Budget). I tried this once before and I’m not sure what happened, but it didn't stick. This time is different. Maybe they made some changes since the last time that I really like or maybe it just wasn't what I was looking for at the time. I decided to give it another shot because they offer a free 34 day trial, which does not require a credit card. It only took one day for me to be hooked.

First of all, it is very easy to use. They have great free tutorials, classes, and forums filled with YNAB users who are very passionate about this program. What else I love about YNAB is that you only budget the money you currently have and if something comes up that causes you to go over budget in one category, simply adjust other categories. They call this “rolling with the punches”. Whenever you get paid or get money from anywhere, think about what you will need to pay before you get paid again. If you cover your necessities and have money left over, you can start paying off debt or putting towards rainy day funds, or build a buffer. A buffer is where you save enough money in that category to pay for one month's worth of expenses.  Once you have that saved up, you will always be a month ahead on your budgeting and bills.  You can pay your bills at the beginning of the month or whenever you want to instead of waiting until you have enough money to cover it.  Better yet, set up automatic payments so you don't have to forget to pay them and since you have a buffer, you don't have to worry about the money not being there.  There are many advantages to doing this, the biggest being you don't have to worry about paying any of your bills late again and avoiding late fees and negative credit reporting.  When you see the possibilities it helps you make better spending decisions and you actually try to stay within budget. I really only check my bank account daily to be sure there are no fraudulent charges or anything that I may have forgotten about. I simply check my budget categories each morning to see how much I have remaining in whatever categories I may spend in that day.

The other thing I love about this (which I’m certain they didn't have before) is their smart phone app for Android (they also have one for the iPhone and are working on a Windows phone version). Whatever transactions I add on the go sync up with my desktop version and I can view the balances of all my categories on the app as well.

For anyone that does not currently budget or is not happy with their current budgeting system, I urge you to just try the free trial. You have nothing to lose since it does not require a credit card up front. If you don’t purchase the program, you just won’t be able to use it anymore after the 34 days are up. If you decide to purchase it, the cost is a one-time fee of $60; however, if you use my referral link, you will only pay $54. I have to say I am the last one to pay for things when there are free options, but this is completely worth the money. You won't find anything free that will work as well as this does. I know it has already saved me more than that just by keeping me attentive to my spending.

Bonus:  If you are a college student, you can get YNAB for free!  Instructions here.