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Hey there, Budget Brigade!
I’m constantly working on improving my financial health, with a little inspiration from the Money Guy’s Financial Order of Operations (FOO), along with my desire to one day have my husband I be work optional…aka work because we want to, not because we HAVE to.
To share this journey, and keep myself accountable, I’ll be updating you all on my progress once a month.
Here's a quick update on where I stand right now:
So far, I’ve set aside my highest insurance deductible, leading to piece of mind in the case of anything unforeseen. I’ve also been able to maximize my 401k employer match, and max out my 401k contribution amount. Here’s what’s left of my current goals:
High-Interest Debt
We bought a car at the end of last year after enjoying years of owning two fully paid off cars. Once we had a baby we realized that neither of our cars fit both of us AND a rear facing car seat comfortably, so made the decision to trade one of our compact’s in for a larger, more family friendly car. We pay more than the monthly minimum, but are hoping to increase our payment even more to pay it off years early. So far we’ve paid off 6.7% of our total balance.
Emergency Fund
Before baby we were slowly building up our emergency fund by transferring any money left over from our budget at the end of the month into a high yield savings account. Now that we have a tiny human dependent on our financial security, we have reprioritized and have been pouring money into our account to be able to increase it to cover 6 months of our expenses. We are 69.6% of the way there.
Max Out Roth IRA
Neither my husband or I have yet contributed to a Roth account, mostly because we live in a state with a high income tax, so we have prioritized traditional 401k contributions over Roth contributions. We recognize the tax advantages of a Roth IRA account though, so once we get our emergency fund in order we plan start contributing to one.
25% Savings Rate
Remember when I said we want to be work optional? This is how we plan to get there. Once we get to a place where we feel comfortable with our current high interest debt, we plan to up up up our savings rate. We are currently 58.2% of the way to our 25% savings rate goal.
Low Interest Debt
Lowest on our priority list is paying down our low interest debt. This includes our mortgage and student loan payments. We are making the minimum monthly payments, but don’t feel the need to pay more since the interest rates are less than what we can earn on our money in our high yield savings account and brokerage accounts. Until that changes, we’ll just keep paying the minimums here. To date, we’ve paid off 24.7% of our low interest debt.
Financial Independence
Feeding off our our 25% savings rate goal, we are tracking our progression toward financial independence to achieve the work optional lifestyle we want. Here are the 3 numbers we are working toward:
Total financial independence (no more work for us!) - we are 7.9% of the way there.
Coast financial independence (we can “coast” to retirement without having to save anymore) - we are 24.3% of the way there.
Barista financial independence (we can work part time doing “fun” jobs and still pay our monthly expenses) - we are 12.2% of the way there.
Overall, I'm incredibly proud of where we have been able to get financially and the progress we’ve made. Having these clear goals to provide a roadmap to financial success has empowered us to take control of our finances.
I’m sharing this update with you to not only celebrate our progress but also to inspire and encourage you on your own financial journey. Remember, every step forward, no matter how small, brings you closer to your goals.
It would mean so much to me for you to check back in every month to help keep me accountable and see how much progress we have been able to make month over month.
I'd love to hear about your own financial goals and progress. Feel free to share your wins and challenges—I'm here to support you every step of the way.
Here's to continued growth and financial success!
<3
Megan
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Disclaimer: I am not a financial advisor. The information provided is for educational purposes only. Please consult with a certified financial professional before making any financial decisions.
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