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. Check out my Smash Debt Quick-Sstart Guide to help you get organized and make a plan to pay off your debt.
Live Frugally
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.
Increase Income
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.
Start Saving
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?
Completely agree about prioritising frugality before you attempt to increase your income. Otherwise more money coming in just means even more going out!
My best from 2016 was learning to only spend what I had on my credit card and to live more of the cash system.
In 2017 I am going to pay off the $1,425 I have on a 0% APR balance transfer, boost my savings, and make additional principal payments to my mortgage
2016 was a bumper year for us financially. We invested the bulk of our savings. This year we’re planning on spending a bit more – not touching the savings, but investing less and spending a bit more. The big ticket items this year include a kitchen remodel, a share of a sail boat, and vacations to Singapore, Vietnam, Hawaii, and Canberra.
Those are awesome things! We are focusing hard on paying for our honeymoon this year!
It has been so wonderful to see how you and your family have set and followed through on your goals. With how often people accept their situation and abandon hope that it can be different, your stories are a breath of fresh air! Congratulations on all the hard work paying off, and good luck to you and your goals in 2017!
(Our 2017 goal is increasing our income so that we can pay off debt and move out of the basement!)
Thanks for the kind words Ashley! After 4.5 years in the basement I think that’s a great goal! 🙂 We’re looking forward to getting out of the basement too!
Congrats Stephanie! What a fabulous year for you and your family! You all are an inspiration!
We had a big year too with also becoming debt FREE!!! Unfortunately, with our big move from England to Hawaii, we “fell off the wagon” a bit and didn’t save/invest as we planned. However, we are determined to get back with the program in 2017!
Happy New Year!
Wow! England to Hawaii has got to be a huge change climate change! Both are expensive places though! The new year is a great time to get back on the wagon! 🙂
…and thanks to Nicole’s Million Dollar Challenge, I changed my networth by $29K in 2016! A combination of paying down the mortgage – I made almost three years worth of principal payments in one year 🙂 plus increased savings. All this with reduced income due to knee replacement surgery.
In 2017, I am going to France for two weeks this spring!!! I also want to do a major home project if possible. And to keep things interesting, up my 401K contribution by another % and keep paying triple on the mortgage. It’s all a stretch but these are all things I feel passionate about right now!
Congrats again Stephanie for the major accomplishments in 2016. It must feel so great to have the student loan monkey off your backs.
We finished our adoption fund goal of $23,000 and now this year we are focused on building our emergency fund back up. Once that is realized, our next saving plan is paying cash for some home projects that have been on the back burner.
Your family has been so inspirational to us!
Congratulations on the adoption fund Mary Ann! That’s huge! Keep up the good work! 🙂
Amazing progress and I’ve loved following it this past year. We’re debt free already, but I’m hoping to be more frugal this year and increase my side income to be able to max out my savings goals. It’s going to be a great year!
Best wishes to you and your family for 2017!
Thanks for the kind words! Being more frugal and increasing income is a powerful combination! 🙂
We paid of the rest of my student loans and a small medical bill in 2016. Our plans for 2017 is to pay off a larger medical bill and start attacking my husband’s student loans. They are currently at 102,000. You and your family have been such a great inspiration to me and my husband. Thanks to you and your husband for being so transparent and motivating us to stay the course.
Great job Myeshia! Keep up the good work in 2017! You can do it!