2017 has been a crazy year financially for us. I started out the year with being laid off. That in and of itself wouldn’t have been that big of a deal if it weren’t for the rest of our plans. We were set to be married four months later, and still needed to pay the remaining vendors. Depending on how long I was out of work, that could have been troublesome (even though we already had that money set aside). We are building a house, a process which started in late 2016. If I was out of work for an extended period of time, would we be able to afford the down payment? Would we even be able to secure financing? With all this expensive stuff, how could we possibly improve our finances?!?
For as stressful of a situation as that was, and for as expensive of a 2017 this has shaped up to be, I can proudly say we are pretty much treading water financially. Considering we tackled two of the most expensive life events in a single year, combined with one of the more potentially financially devastating events possible, I’m very happy to be holding steady.
Even though from a net worth perspective we’ve remained about the same, we were able to make some improvements so far this year. Here are seven things we’ve done to improve our finances in 2017:
1. We avoided consumer debt like the plague.
I haven’t been in debt since paying off my car in 2012. Kristin had a bit of credit card debt when we started dating, but destroyed that as well. We’re taking on a mortgage, but steer clear of all consumer (credit card/auto) debt. It’s the worst.
2. We opened a Money Market account.
This one is pretty small, but it added over half a percent to our APY and took two minutes. This one was a no-brainer. We’re transitioning over all of our savings into a Money Market account because the return on it is better than we get with a regular savings account, and for all other purposes it’s practically the same.
3. We increased our 401(k) contributions.
I’m a big fan of increasing 401(k) contributions stealthily if possible. With my new job I was unfortunately not able to contribute to a 401(k) until this month, but we increased Kristin’s contribution and we increased where mine was, as well. Our plan now is to work toward maxing these out.
4. We started going to Aldi.
Being in Minneapolis, we’re big fans of Super Target and had traditionally done all of our grocery shopping there. It’s convenient, and the quality was good as well. However, we’ve been going to Aldi for a few weeks now and the price difference is definitely noticeable. Our weekly grocery bill for two of us is about $70, and we realistically could cut that down even further if we did a better job planning our dinners. Aldi has its quirks (if you haven’t shopped there before, do your homework on it first!) but the prices are great and the food is of high quality, too.
5. We saved money on lunches by meal prepping.
I just calculated yesterday that our rough cost per lunch is about $0.82. That does not include a few extra cheap snack items like carrots and hard-boiled eggs. Prior to meal prepping, I’d go out to lunch about once a week with my old co-workers. I love them to death, but those lunches frequently ended up being expensive. We worked at a start-up, where the drinking culture was strong. Enjoying an old fashioned (don’t muddle the fruit) or three with lunch wasn’t uncommon, and that led to lunches that easily cost $40 or more! They were great in the moment, but absolutely terrible for our cash flow. Meal prepping saves us money, keeps us healthier, and comes with the added perk of not killing my liver.
6. We stopped drinking as often.
Lunches weren’t the only time or place we’d drink. When we lived in California, we had a liquor store that was kiddy-corner from us. We’d stop in there frequently – a few times a week – and pick up a bottle of wine or a six pack. We’d easily spend $75-$100 a week on alcohol, and we didn’t even go out to the bars often. We cut down to only drinking on the weekends, and only one night, and that’s kept our alcohol budget low and kept some extra money in our pockets.
7. We agreed on our short-term, medium-term, and long-term goals.
While not having a significant direct financial impact, openly communicating about our goals and how we want to save, spend, and invest our money is an important part of growing together as one financial unit. We’re both on the same page with where our money should go and what sorts of things we want to buy. We know what our retirement plans (tentatively) are, how to get there, and what we can do to speed it up.
Being on the same page and having the power of two income-earning individuals working toward a single shared goal is immensely helpful. Our focus is currently making sure we have enough extra padding in our budget and savings to feel very comfortable with moving into the house we’re building.
We will have additional associated costs; things you might otherwise forget about. Blinds, gutters, and towel racks – none of which our builder installs for us – will need to be taken into account. We’ll probably need some more tools and lawn equipment. What can we borrow from neighbors or get as hand-me-downs from friends and family? What can we find for free on sites or apps like Craigslist or LetGo?
It’s never really a great feeling to look at your net worth and realize you’re going backwards or, at best, barely going forward. The changes that we have made, though, not only kept some of that in check, but also set ourselves up for a good future. Undoubtedly we’ll have another expensive year in 2018 as we get to enjoy some of the joys of home-ownership (but not everything at once). Knowing that we’re in a better position now to be able to handle that is encouraging.
Even though the year is halfway done (WTF? Where did time go?!?) we have plenty of time ahead of us to continue making progress and end the year with a net worth quite a bit better than when we started. In the meantime we’ll keep our eyes peeled for opportunities to earn more, spend less, and be sure to enjoy ourselves along the way.
What have you done in the first half of 2017 to improve your financial situation?