Happy new year friends! I’m excited about the good things coming up in 2017 and will be talking about goals and plans soon enough. In the meantime, I want to take a quick look back at 2016.
We had a monumental year in regards to our finances! Definitely a year worth celebrating! It didn’t just fall into our hands though. The financial successes of last year were the culmination of lots of hard work and lots of blessings.
At this time last year, we were figuring out how we could reach our goal to be debt-free by the end of 2016. We had twelve months remaining of our three-year goal and we weren’t sure quite how we were going to make things work.
As you’re setting your goals and making plans for a successful new year, I want to share our four best financial moves of 2016.
Pay off debt
Paying off debt was definitely our biggest financial move of the year. Of course it didn’t all happen in one year. We set our big goal of being debt-free back in 2013 and have been strictly focused on that goal ever since. After three years of hard work and dedication, we finally made it to debt-free!
If you have big debt like we did, it might take several years to tackle it. Don’t let the enormity of the goal keep you from setting it. If you go through my free Smash Debt course, I’ll show you how to set up a plan for success. You can do this!
Once we polished off our debt (earlier than planned!), we stuck to our same slim budget. Without debt, it might have been easy to continue “celebrating” by justifying splurge purchases or inflating our lifestyle, but we resisted the urge.
Making wise money choices when it comes to spending money comes more easily for some people. Thankfully, my husband and I both fall into the frugal category. Of course, we both have our own spending temptations, but by and large, we are both frugal by nature.
If you’re not frugal by nature, have no fear, it can be a learned art. Once you learn to be frugal, you can build strong habits of thrifty living that will pay off throughout the rest of your life.
If being frugal is new to you, I recommend checking out Frugal Fresh Start. It’s a 28-day challenge that takes you through the steps of building a more frugal lifestyle so you can get your finances in order. For a limited time, you can get $2 off the PDF version with code NEWYEAR.
While I am a firm believer that being frugal should come before working to increase your income, increasing your income is a huge, often necessary, factor in making headway toward your financial goals.
During 2016, we put in more working hours than ever. My husband worked especially long hours, both at his day job and the law firm he built on the side. I continued to work to grow my blogging income. With everything combined, we doubled our income from the previous year.
While we aren’t planning on continuing this kind of income growth (in fact, we’ll probably decrease our income so my husband can spend more time at home), it was super helpful to build up the extra income in our final stretch of debt payoff.
For the past three years while we were narrowly focused on paying off debt, we did not save much at all. We stalled our emergency fund at $5,000 and didn’t contribute to retirement. When we decided to focus 100% on paying off debt we sealed the deal by throwing our house savings at the debt. That big chunk of change barely made a dent, but it was our proof to ourselves that we were all-in and together on the debt payoff program.
When we finished paying off debt ($144,000 to be exact), we rewarded ourselves with bicycles for the whole family and some camping gear for the kids, but then we got back to business. Only this time it was saving instead of paying off debt. With no debt, minimal expenses, and an increased income, we have made good progress on our savings goals.
We made mistakes too
Like any story, the successes are only half of the story. We made financial blunders along the way. In fact, some will argue that focusing completely on debt (rather than retirement and savings) is a blunder in itself.
But we’ll save the failures for another day. Today we’ll focus on the wins and the blessings!
How about you?
- What were your best financial moves of 2016?
- What are your big plans for 2017?
Free when you subscribe!
Get frugal inspiration and financial motivation in your inbox every week, plus you'll also get the Guide to Getting a Month Ahead Financially for free!