2021 Annual Goals

I've always been the gal to outline and set a goals to provide some direction and accountability with my finances. It makes me feel better to have a plan and something to work towards... so while the internet is being flooded with lots of new year resolutions, here's the run down on our annual goals for 2021.

1. Rid ourselves of a car payment.  

This marks the 2nd time in my life I've had a car payment. The first car loan I had was for my second car, the Camry I drove into the ground until we replaced it recently with the Subaru Outback "Suby" recently... the car I drove for 13 plus years.  I had that loan for one year and busted my butt to pay it off... and we are going to do the same thing in 2021 with the car loan we took out for hub's Forester. I just sleep better not owing money. So despite our 0.99% interest rate, we are gonna make that our number 1 priority. 

• Our loan was for $18,794.20 when we purchased the car in October of 2020.
• In November, we paid $403.50 ($387.75 Principal / $15.75 Interest) Balance: $18,406.45
• In December, we paid $403.50 ($383.58 Principal / $19.92 Interest) Balance: $18,022.8
• In January, we paid $2117.00 ($2106.26 Principal / $10.74 Interest) Balance: $15,916.61

In December I got "an extra paycheck" so we tossed the whole thing at the car payment this month. Our plan to eradicate the car loan is to pay $517 a month, apply all of our "extra checks" we get throughout 2021 to principal reductions... Send our stimulus checks to the debt... and other windfalls like the $1100.00 escrow check we got back from refinancing our mortgage... and monthly extra cash we may get that survives the month. We aren't dumping all of our windfalls at once at the car, but rather this month I sent that extra paycheck... next month, i'll send the escrow check in Feb, and then in March we will toss the stimulus checks at it if we haven't needed the funds for something else because by that time we will have filed our taxes and know if we owe or will have a refund, and we will know what to expect for profit share from Hub's work, which had a record breaking year. 

So without Profit share and possible tax refunds, if all goes according to plan and we send the escrow check, and the stimulus checks over the next few months and with our extra paycheck and $500 a month plan, we should have around $3,000.00 left to pay down at the end of the year... which we hope to eradicate with any tax refund or part of hub's annual profit share check.

2. Pay our refinanced mortgage like its a 20 year loan instead of a 30 year.  

When we refinanced our mortgage to lock in a cheaper rate (2.75% instead of 4%), we did not opt for a 20 year or 15 year mortgage because the rate saving was not significant with our smaller mortgage size and it would increase our payment naturally (We were offered 2.65% for a 20 year). Instead by opting for the 30 year loan, but adding additional principal each month like it was a 20 year loan, we now have the flexibility should pandemic conditions change our jobs significantly, to reduce our expenses in the future if need, while reducing our interest rate over all, to allow us to pay down the balance owed much quicker. 

We refinanced our Mortgage into a 30 year at 2.75%. Our new balance was $152,600.00. Our minimum payment is now $622.98, but we are planning to pay $824 a month instead and treat it like a 20 year mortgage (sending $201.02 extra each month). 

• In December, we paid $824 (474.29 principal / $349.71 Interest): Balance: 152,125.71 

So our goal for 2021, is to hopefully keep these payments going all year. 

3. 15% deductions for retirement without counting matches and social security

Hubs is already there. We have 15% of his paycheck put into his roth 401a every check, and do the same with his annual profit share check. He gets a 4% match on contributions, also pays into social security on top of that. Since my pension kicks in at 55, we both plan to retire together, so we want to make sure we are putting enough aside to make this a reality. Without matches but counting his social security, hubs put 21% of his income away for retirement. With matches, its 25%.

I on the other hand pay 9.5% of my salary to my pension, and don't pay into social security. I get $150 match on my 457 contributions, by putting in $150 a month. This girl does not leave free money on the table, but this $150 a month is about 2-3% of my salary before the match... so I'm a little short of the 15% marker, and since my pension is taxable income and my 457 is a taxable account, we are going to put $118 a month into my Roth IRA, as that should get us near the 15% marker. (If I could employer pension payments as "matches" they put over 9% of my salary away, and then I have the 2-3% matching 457 contribution, so that will put me around  the 25% marker as well with matches. 

4. Restore "sinking funds"

Usually with our tax return and profit share check, we restore our savings accounts that we spent money out of over the year. We pulled money out of some of our sinking funds accounts with the car and tile projects last year, so a few need to be topped off:

• Vacation Fund: Restore to $1500 | Currently $502.12

5. Evaluate the Emergency Fund and Checking Account Padding.

Right now, I moved half our emergency fund to our checking account when we were dealing with the car purchase and home improvement issues so I wouldn't have to worry about paycheck timing and other things. By the end of 2021, I want the emergency fund back in its account, and to have at least a 2,000 buffer in our main checking account so I don't have to worry about when bills hit the account as I've grown accustomed to paying bills early with the money that just kind of sits there, but I also know it can be easier to spend money when you see a larger number in your account. 

Assuming we both lost our jobs, our bare bones emergency budget would be $3,329.71 a month.

• $30 year payment on the mortgage ($622.98); $300 property taxes; 367.50 HOA; $260 gasoline; $50 little dude; $100 non food items; $190 Insurance (car/house/earthquake); $100 utilities (just electric); $65 internet; $400 groceries; $40 cell phones; $834.23 Bronze Kaiser health insurance thru Covered California.

Its a no thrills lifestyle because this assumes No money coming in. We drop Little dude from daycare and go on total lock down as we would be living off our savings completely. Now in the real world, Hubs would qualify for unemployment initially, so we would have that as well. I also have over 500 PTO hours at present that would have to be paid out if I lost my job but this is just the outline we have to earmark how much money we should keep liquid if we needed 6 months of paired down expenses.  With the smaller mortgage payment after the refinance, a $20,000 emergency fund would still be valid for a bare bones budget.

In the real world, if Hubs were to loose his job completely, we can survive on my income if we cut daycare out as I cover the health insurance and we make sure our basic needs (food/Clothing/shelter etc) can be covered on one income cause we are old fashioned folks who don't buy into societies I NEED the latest i-phone mentality. I like to spend my time playing board games and going hiking cause i'm a social homebody at heart. If I lost my job, 

Now if I lost my job, while hubs and I make a similar income, most of his comes from profit share, which is never guaranteed. So if we talk about his base pay and our savings, we would have a year to figure out our next plan.

So by the end of 2021, I'd like 20,000 sitting in our emergency fund and around $3000 in our primary checking account. 

6. If we manage to do all of that, then we would start on any of the following:

• Buy and build the rest of the living room built ins 
• Add a metal deck ceiling/roof for the patio and possibly privacy shades
• Add baseboards back to the house since we don't have those yet
• Upgrade Little dudes closet to one floor to ceiling Ikea Unit to add more storage since he and his clothes are getting bigger.