Finances, let's chat

photo by Fabian Blank found on Unsplash

Money. We are very much ruled by it. It makes or breaks a lot of my decisions. My biggest goal is to not be living paycheck to paycheck. But that is far easier said than done. When you have debt you have to make decisions based on others requests. So even though I would love to stock my savings and get to that point, I am a firm believer of paying off owed dollars first. When interest rates on debt are triple what you get on savings, it just makes sense. 

The hardest part is deciding what to pay off. Our debt load was broken down into four different loans with varying interest rates. In 2017 we had the choice of paying off one of those or taking all the money on that one and putting it towards a high interest rate one. I don't know if it was the smart decision or not, but we paid off the smaller one and close it out. Taking us from 4 to 3 and later from 3 to 2. But lets talk about the goals made, reached and reset.

Last January 9.92% 

and I set these goals

  • Not to obtain any further debt - sort of. We bought out the car lease and now have a car loan. To go without a car would not be possible, we made the smart decision when it came to buying the car but it's still more debt. 
  • Finalize taxes in Canada - done.
  • Rearrange some bank accounts - after reexamining some of our owed monies, I discovered that we literally can not rearrange the accounts I wanted. This is frustrating, but I'll make it work.
  • Be financially prepared for our trip to visit family - we were. 
  • Set aside some emergency savings - we have one month set aside. It's all I can justify at the moment. 

This January 49.55% 

That percentage is a huge increase from last year, but it is not as high as I wanted it to be. My original goal was to have all debt paid off in three years. We are now two years in and just short of halfways. I haven't included the car loan in these numbers, mainly because the numbers have always been about student debt. The car loan has an end date and while I hope we can pay it off faster, student debt isn't treated the same way and you can sit on it for years with no penalties (besides interest). Obviously I don't want to do that. Student debt comes with huge interest rates compared to most things, paying it off quicker means less interest. After two years though, it's definitely time for me to readjust my original goals and maybe add to them. 

What we are working towards

  • Be down to only 1 student loan by end of 2018.
  • Pay off last student loan by 2020.
  • Save six months of living expenses in an emergency fund.
  • Save for sabbatical trip to Japan.
  • Save for down payment of 20% to buy/build a house.

The last thing is the small chance that my visa type will change this year, finally allowing me to work. If that changed I am not sure what I would do. If I could, would I go back to work? What kind of work would I want to go into? From a purely financial standpoint working makes sense. From an anxiety standpoint, I start to freak out, but that's for another post. That percentage is a huge part of my life and I'm happy to see it increasing. Hopefully we can do even better this year. 

What are your financial goals for 2018?

photo by Fabian Blank found on Unsplash