Financial Review {One Month In}

About a month ago, Peter and I were struck by the way we were spending money. We didn't go on fancy vacations or drive new cars, and even though we weren't in debt up to our eyeballs, we did recognize that there was room for improvement and we took action.

Within days of making the decision to pay off our house and build our rainy day fund, we were faced with several decisions (large and small) that tempted us to put off our goal, yet again. But this time, we held firm. In the last month we've become gazelle intense and we've made little choices here and there, like eating at home instead of going out, because we have a larger end goal that we're working towards.

We've started to dream about going on a European vacation (with cash) after our house is paid off - that's some motivation right there, let me tell you! Dinner out tonight or coffee in Paris in a couple of years? I'll take Paris for $1000, Alex.

One of the main things that we have focused on in the last month is telling our money where to go. I shared this quote from John Maxwell in my last financial post, but I think it bears repeating:
"A budget is telling your money where to go, instead of wondering where it went."
This is what we're focusing on right now. In the past, I've tried the envelope system, I've tried setting aside a certain amount for groceries or going out to eat or gas...but in the end, nothing has worked for us. We get frustrated or we're constantly borrowing from one envelope or budget column to pay another. And the reality is, we're not going to stop using plastic - sorry Dave (it is paid in full each month though).

The only thing that I've found to fit us, is to pay stuff first and deal with what's left as needed. Are you wondering what I mean? Let me explain...no, there is too much...let me sum up. {anyone?}

Pretty much everything comes out around the first of the month - mortgages, utilities, giving, and savings. While we were still overseas and living on a very small income, I set up an automatic transfer from our checking to our savings on the first of the month. What I learned from that experience was that when I took the money out first thing (and we are only talking about $25 back then), I learned to get by with less. In other words, if it's not there (or it's not as accessible), I don't spend it.

Over time, I've added various amounts to that automatic transfer - saving for the insurance deductible, for propane, for a new computer, for Christmas - and I rarely missed it. With such success in the past, I decided to go bigger and set up transfers each Friday. One week, it goes towards the mortgage principle, the next week, it goes into savings.

By telling our money where to go, we've seen more progress in the last month on building our savings and reducing our mortgage than we have, well, ever. It makes me happy and sick at the same time. Happy, because it's nice to see actual progress. Sick, because I wonder where the money was going before and I think about how much interest we've paid to the bank because we didn't have the self-discipline to do this long ago.

Live and learn, right?

So that's where we are at the moment. We've seen progress, we've made better financial decisions, and we're continuing to press forward and do what it takes. One month down...approximately twenty-three months to go.

I know some of you commented that you also wanted to work on this area (or toward other goals), so feel free to share in the comments or link up to a blog post about your goals/successes. We'll check in again next month!


  1. I've been on a budget since January and I, too, have wondered where in the WORLD all my money was going before... I'm still not as disciplined as I'd like (or should be) but I am definitely in a whole different ballpark than I was last year at this time. Those automatic transfers DO help immensely (I have them set up for my car insurance and some of my giving & saving) because they prevent me from overlooking things and, like you said, make the money less accessible. Your perspective of dinner out tonight vs. coffee in Paris is something I need to adapt for my own goals to keep me motivated! Thanks for sharing! =)

  2. I love that you shared this because my dh and I had a financial discussion this morning. We have automatic weekly transfers, too.

    We went over my dh's paycheck this morning, and made sure every single dollar in the check went into an budget category. Every dollar has a name! And with gazelle intensity, we're paying off my dh's car loan first, and then working on the home equity loan and the mortgage.

    Here's the link to the post: http://alifeinbalance.net/naming-every-single-dollar-with-15-left-over/

  3. It's great that you are posting your goals and progress. Accountability certainly helps with any goal setting!

  4. Thanks for visiting and commenting Barb and Nikki! And thanks for the encouragement - I agree that it's helpful to have some accountability when you're trying to stay on the narrow financial track. :-) Have a great week-end!


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