Our Budgeting Success Since Our Daughter Was Born

Another post about budgeting? Yep. I’m pretty sure I have another 67 posts about how awesome budgets are. Vic is the ultimate budget nerd (who writes in the 3rd person). While having a daughter has increased our expenses, I actually feel richer now that I have a daughter then when it was just me and my wife. It’s all because our family got on a budget. We make decent money, but we’re not millionaires.  I wanted to share how getting on a budget has changed our family.

Since we started budgeting about a year ago we…

Have a Fully Funded Emergency Fund

flickr photo: tradingacademy.com
flickr photo: tradingacademy.com

Before we had a daughter we were just ok with money. Correction – I sucked with money while my wife was pretty good. Everything we have now I attribute to my wife. We have a house, two paid off cars, and a decent amount in savings. After we set a budget, we realized we had too much sitting in our savings account accumulating just 0.75% interest. Most financial experts recommend three to six months in expenses for your Emergency Fund so I was able to cut down the amount in our savings account and put the extra towards investments and paying down our mortgage.

Paid Off $19,000 on Our Mortgage
Paid Off
My crazy dream is to have a fully paid off house by the time I’m 40. While I know it’s an ambitious goal, why not? I don’t want to live the rest of our lives assuming we’ll always have a mortgage. I know we might not reach this goal by 40, but it’s something we are definitely shooting for. We currently put $200 extra on our mortgage payments as well as throw in any extra money at the end of the month towards the principal. While we still have a ways to go, we are paying $100 less in interest each month compared to a year ago which is helping build equity in our house.

Significantly Increased Our Retirement Savings

flickr photo: taxcredits.net
flickr photo: taxcredits.net

We are currently on pace to max out our Roth IRAs at $5500 each for 2015 and are contributing 5% each on our companies 401k plans.

Started Investing

flickr photo: Pictures of Money
flickr photo: Pictures of Money

Currently we have over $9,000 invested in Betterment and even more invested in index funds at Charles Schwab. I’d like to eventually branch out into other investments such as peer to peer lending and eventually own a rental property in the future.

Started Funding Our Daughter’s College Fund (Currently worth around $5,000)
Photo Feb 15, 5 37 26 PM
We put in about $250 each month into Addie’s college fund. Also, every single penny that’s been gifted to my daughter goes immediately in her 529 Plan. One thing that’s a must for any parent that has a college fund for their child is to set up gift giving. For her birthday, Addie received around $700 towards her college!

Reduced Expenses

Photo: 401kcalculator.org
Photo: 401kcalculator.org

Once we really looked at all our expenses, we tried to find ways to cut costs. A few of the ways we were able to save:

    • Cell Phones – Save $97 a month switching from Verizon to Cricket/T-Mobile
    • Cable TV – Save $85 a month cutting cable and switching to an internet only plan
    • Life Insurance – Save almost $700 a year switching from Whole Life to Term (shout out to my insurance guy Matt)

We Don’t Live Paycheck to Paycheck Anymore
Before my daughter was born, we knew we didn’t live paycheck to paycheck. We just didn’t know by how much. Whenever unexpected or irregular expenses such as taxes or car insurance came around, we were never prepared for it and had to pull from our savings. Now, we’re prepared for any expense that comes around.

Looking back, it’s crazy to me how my wife and I didn’t budget. Before there was never really a feeling that my wife and I were working towards any kind of future. Now I see us being 100% debt free, our children’s college paid for, and hopefully an early retirement :). I’ve never been more optimistic about our future until we started budgeting.

6 thoughts on “Our Budgeting Success Since Our Daughter Was Born

  1. Thank you for having life insurance! I think this is one of the best ways to say I love you to your family. I have seen a situation where a parent passes without life insurance and it makes a horrible situation worse.
    We are doing the same things you are with Roth & 529. Kudos on working as a team to retire your mortgage. It seems hard but
    One day you will consider wiping it by taking a lump portion of your savings as we did. Then can I say ‘I told you so!’ 😀?

    Liked by 2 people

    1. Thanks for reading! I’ve seen it plenty of times myself where someone would pass away and the family would reach out for donations from others. My wife and I want to make sure the other person and our daughter is taken care of.

      I look forward to the day we don’t have a mortgage!

      Liked by 2 people

  2. Awesome work on the savings / budgeting. Sounds like your hitting all the key points for big wins and easy savings. We’re hitting most of the same points, except the mortgage. I’m happy to let it roll at 3% on a 30 year and put that money to work elsewhere. Cheers!

    Liked by 2 people

    1. Thanks for stopping by Adam!

      Whatever works for you! It’s called Personal Finance for a reason! I know it’s crazy and I might be better off investing that money elsewhere, but my goal is to be 100% debt free.

      That being said, I did slow down on paying off the mortgage a little bit. I’m currently concentrating on diversifying my investments a little more.

      What are you investing in Adam? Any suggestions?

      Liked by 1 person

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