I have been thinking about my short-term financial goals for a few weeks. I want to shake up my current plan of attack and I finally decided to write down these new goals. I loosely base my financial plan on the debt-snowball. I love Dave Ramsey’s “Baby Steps,” but there are a few reasons why I don’t follow his plan religiously. First of all, I don’t make a lot of “extra” money each month ( I refuse to say “I don’t make enough money” because that’s a lie – hashtag grateful). Additionally, I successfully use a credit card and pay it off every month. I plan my splurges very carefully – I just swipe for them rewards. Even though I don’t follow his plan religiously, I had been taking his “throw everything at the loans” approach to the extreme. I pinch every dollar out of my pay check and end up leaving almost nothing in my regular account. This just doesn’t make sense for my situation. Since I just don’t generate copious amounts of income, it’s going to be a few years before I really beat down this debt.
So my new savings goals are:
1. Keeping at least the amount of one paycheck in my regular account
I’d like to automate my bills again and in order to do that, I will have to have enough green in my account. It will take some time to get use to this system. I might have to rework how I budget each paycheck since it won’t act like a zero-base in my account, but I truly believe it will relieve a lot of stress.
2. Maintaining a flex spending account of $1000 for recreation
This goal really torments my inner debt killer who says that I can’t have fun until I pay off my debt. “HANNAH YOU ARE IN DEBT AND DON’T DESERVE HAPPINESS.” It’s 2017 and I have been killing debt for 2.5 years. Shut up you debt murderer. I really value experiences over material objects and want to travel and visit friends and family. They don’t have to be elaborate trips, anything will help me de-clutter and unwind. So I’m officially saying that I am willing to let the debt linger just a little longer, if that means that I can have a few more experiences this year.
3. Bumping my emergency fund up to $2000
I know that Dave Ramsey says that I don’t need more than $1000.00 in my emergency fund, buuuuuuuut I don’t purchase pet insurance even though I have a very large dog who occasionally needs things for his greater health and wellness. Furthermore… my car needs a few more repairs before it will be in better running condition. These are things that I know are going to pop up in emergency-like fashion. I prefer to get ahead of my emergencies.
4. Keeping a little cash “savings” at home for special occasions
This one is a new strategy that I read about recently. The author of an article I was reading said she kept cash in her bedroom as a little bonus money. When I get bonus money, I usually put it towards one of my bigger goals like debt or Christmas or I use it to buy something I have been eyeing online. I still think those are good options, but I want to see what happens if the piggy bank piles up to $100 or $200. I’m thinking it might be good if something like a candle party pops up or if a sibling has a fundraiser or if I want to go out to eat with my friends without worrying about my budget or my savings goals. This one may not work for me, but I want to experiment.