Congratulations, you have made it to the end of our budget series. For those who followed along (and thank you to those who reached out to us offline or through the comments!) it has been a fun process to write out our thoughts on how to put together a budget. Below we will discuss our final step and some final thoughts.
Calculate your savings needed to reach your goal
Find a budget that works for you
Track everything for the first month or two
Review your progress
In our last post, we discussed making small adjustments to our budget, and being flexible in the wake of change. This post is about the big picture. We review our goals about once a quarter to make adjustments based on how our larger priorities have shifted.
Reviewing in Process Goals
Sometimes it may make sense to change the priority of your goals, or to switch your goal completely. For example, if there is a situation where you took on credit card debt, it’s probably going to be a good choice to prioritize paying off that debt first before putting funds elsewhere.
When we look back personally at some of our goals over the years, Mrs. Doughmaker and I are proud of what we have been able to accomplish. Completing goals or seeing the progress of goals is a great motivator towards greater financial security.
As a newly married couple, we had great plans to buy a house and to grow our family. We knew that in order to keep from feeling financially strained we would need to attack a few of our debts first before taking on a mortgage or providing for a child. Our goals back then were to pay off our car and school debts as best we could to free up cashflow for the future.
In about 18 months, we had one of our two cars paid off, the other vehicle was refinanced at a lower rate to pay off some of our school loans, and we had freed up over $450 in monthly cashflow which was going to make a mortgage much easier to fit into our budget.
When we were focused on paying down debt, we had less each month to go out to eat or to buy new things, but we have never regretted it once. The relief in paying off those burdens was well worth the struggle.
What do we do when we complete a goal?
There are a few things to do once you complete a goal.
- Celebrate! Its important to mark the significance of progress. After 6 years of paying school loans, the final payment was absolutely liberating. Knowing we would hopefully never pay school loans for the rest of our lives was something we wanted to remember as an important moment in our journey towards financial freedom.
- Time to review progress and either set a new goal or increase the amount of money you contribute to one of your other goals. When we had an additional $450, we knew that we had to find a purpose for those funds. Whether it was increasing our 401k contributions or saving towards a downpayment for our house, we made sure to make those additional funds work for us.
We hope this series helped give a look into our process of setting a budget and sticking to it.
