Sunday, December 28, 2014

Year in review

I had three goals for 2014:

No.1: Stick with a tiny, one salary budget so S could stay home with the boys and restart his pottery studio.

No 2: Get emergency fund back up to $1000.

No 3: Pay off remainder of medical bills (which was $550 when I made the goal), pay off as much cc debt as possible, and continue to chip away at all other debts with minimum payments for a grand total of $7,000 in total debt reduction.

Looking back on the year, I have to laugh at how naïve I was when I made goal number 1. The transition to one income was much more difficult than I had ever imagined. It required a level of cooperation and communication between S and I that was way beyond our ability when the goal was made. It took months of growing pains before I really felt like we were in synch about the budget and many more months after that before we could reign in our spending to conform with the new budget. We were also ridiculously naïve about how much work S would really be able to get done with the boys at home and how much time/ money it would really take to get a business off the ground. Taking the year as a whole, we bombed goal number 1. But in the final quarter we were able to launch S’ business, have been able to stick with our budget and start making a dent in debt again. We have also grown immensely in our relationship, as parents, and as financially responsible people so I’m thinking we didn’t totally fail at goal number 1.

We met goal number 2 in the final quarter, which is such a relief. Overall we are doing a much better job at forecasting, budgeting, and saving for upcoming major, one-time expenses but it’s good to have some money set aside for real emergencies like the ones we have faced this year.

Lastly, there’s no way to sugar coat goal number 3: we failed miserably. We failed to understand what goal number 1 meant and ended up acquiring new debt trying to figure it out. We failed at estimating just how much the move would cost us and acquired new debt trying to make the transition. We wiped out our emergency fund in the move which meant we had no way to pay for the unexpected medical expenses and acquired new medical debt. It just wasn’t a great year financially until the last quarter, when we finally got our act together. I guess I should be thankful we are ending the year with only an additional $1000 in debt given all the failures along the way.

2014 was a major learning experience, yes, we increased our debt, but in the end I am proud of how well we have dealt with the setbacks. I am anticipating 2015 will be a great year for us, we’ll continue to grow and learn how to manage this new lifestyle, we’ll start seeing major decreases in debt again, and we’ll better predict and manage upcoming expense. Here’s hoping for an uneventful year, at least in the financial aspect!

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