Pulled in every direction

iVillage Member
Registered: 07-27-2009
Pulled in every direction
8
Mon, 02-25-2013 - 3:51pm

How does everyone balance several different money goals? I have been pretty consistent with my 457b contributions of 10% and I obviously have debt that I would like to retire as soon as possible, but I also have several short-term goals that are shooting the long-term goals in the foot. First off, I started a 52 week challenge where I put different amounts of money in each week into a separate savings account. It is supposed to keep you motivated to keep up a steady habit of saving little amounts every week. I have used the Yahtzee method of picking whatever value from $1-$52 to cross off of the list as I save. I have done well on this goal so far and I like the consistency it gives me. The next goal is my college tuition for summer. I DO NOT want any more student loans so I need to save about $185 every week to make this plausible (I could cut back on the course load, but that would extend the overall time frame for graduation). Finally, my aunt has a timeshare that she will let us use for a week of vacation and we need spending money while we are there all week. I thought that $1000 for our family of 6 would be doable and conservative (comes out to about $45 a week to save). It is not a necessity, but we have not vacationed since I started this debt repayment plan so I would really really REALLY love to get away for a while to relax (even if DH invited the in-laws...lol). This all leaves me with very little extra to throw at the debt :(

So share some tips that you have used. Do you shoot for one goal at a time? Do you divy it up between goals? It just doesn't seem like there is enough money to go around...

JenAaron.jpg picture by jen2075


Avatar for poorboy2011
iVillage Member
Registered: 10-02-2011
Mon, 02-25-2013 - 4:00pm

My income is constant, so it's a zero-sum game between my different goals. That just means I have to create a priority. I do need to have fun once in a while to stay motivated. The trouble is I like having a lot of fun.

iVillage Member
Registered: 04-08-2008
Tue, 02-26-2013 - 12:27am

I have excel spreadsheets that have my debt repayment schedule linked to my monthly budget. So if I change a payment from say $200 to $500, it shows me the effect that has on the balance and time for repayment. That really helps me to "see" what makes sense. I also have schedules for vacation planning and big wish items that have already been costed out. Unfortunately I do this with all of our pay increase, extra work (I can accurately predict DH's overtime schedule, my extra work revenue, etc)...which makes "extra money" VERY rare and unexpected.

The rare time we do get extra money, we look at the effect on increasing debt payment. I would probably never pay the mortgage since I got a 2%, investing it would make more sense than paying that off faster! I look at the wish list (do I have time and other things need to make the planets align and have it happen NOW - I have a post on that I could share :).

I got my summer and part of fall's tuition from a RRSP. It was earning a very miserable return - like $40 after 8 yrs! And I can write off the tax penalty against the tuition so it makes sense for me. I have 10% contribution & employer 8% contribution into a pension plan so I don't really need a RRSP. I'd rather have my money in a TFSA...but that is a whole other post!!!

What was the question? ;)

Dee

iVillage Member
Registered: 04-10-2003
Tue, 02-26-2013 - 9:27am
I am actually going through the exact same thing right now! My debt is sitting there but there are so many other things I have to/ want to take care of. In my case, I started my sinking funds so that I can ensure the money is there for these other things, while not "impacting" my debt repayments (but let's be honest . . . it is because the money that is set aside would otherwise go to debt!!!). How I have managed it is to set up auto payments to my debt for slightly more than the miniums (i.e. my student loan payment is $225 a month but I send $140 every two weeks, my LOC is interst only at $40 a month but on top of that I pay $85 every two weeks). Then as life happens, I shift my priorities. January was pretty good and my priority was the LOC so I made some headway. Then I needed to prepay for the dogs and deal with my sister. Those wiped out my dog/me fund so my priority for March is to get them back to a healthy state. Once they are good then its back to debt. So I guess the moral of my story is that I am flexible to change my goals as life changes, but will generally focus on one thing at a time!

Bex -

Avatar for turtleemom
iVillage Member
Registered: 07-25-2007
Tue, 02-26-2013 - 12:06pm

When we were repaying debt I used the envelope system.  Our main goal was to get out of debt and to build an EF. That was it. DH and I sat down and figured out what fixed bills we had monthly and yearly.  Then we figured out what we spent other money on- over the year gifts, holidays, educational expenses, entertainment, haircuts, pets, clothes, vacations, etc.  This took a couple of weeks as we kept adding things. Then we set up some saving goals.  Lastly we figured out what where we had to make adjustments to make it work. We had to make several adjustments.  Broken down monthly our expectations were not realistic.  There were thngs we just could not afford.  We dropped TV service,  greatly diminished how we shopped for holidays, spread out my hair coloring and cuts and got rid of our vacation fund.  Most of our entertainment was free-splurging on steaks at home at $19.99 lb was still less than a steak dinner out kind of mentality.  Saving and debt repayment were priorities.  

 We did this at tax time and jumpstarted our enveloples with our refund so we already had a few months of money in there.  We went to strictly cash and while it was a pain to go into the bank and get the proper bills to fit in the envelopes, I liked seeing the money add up in them.  When odd bills popped up (license registrations or dr copays) I had the money set aside. As one bill got paid off, most of that amount went to another bill. The leftover amount went to up another envelope anount.  Over the years (3 ) the envelopes got to where we thought they should be and we added in more categories. 

 This worked for us because we had planned it all out.  I needed that kind of strict structure. We did not snowball to the largest first.  We worked on all the small bills first because I needed to see the debt shrink not just by numbers but by the amount of bills received each month.  We also did not include the 2 extra yearly paychecks that come in months wiht 3 pay periods in our calculations.  Those were bonus money.  While it was 3 years of doing without, we still enjoyed life and we got creative in how to spend time together as a family without spending  money.  In the big scheme of our marriage and lives, 3 years was not that long.

We no longer do the envelopes, but after doing it for 3 years those amounts are in our head.  We have the checking account where the biil money and monthly spending money goes.  For short terrm goals there is a savings account where money goes for gifts, holidays, hair cuts, pets, cavacations, etc and the EF is in there.    Then there is a seperate savings for long term goals, big vacations, new vehicle,etc.  Retirement and college are seperate accounts.   

It's a slow process, but what I learned is that we were not in a postiion to have it all and we had to adjust our thinking  and our spending.

iVillage Member
Registered: 05-08-2006
Tue, 02-26-2013 - 1:44pm
I think it depends on what your debt is costing you in interest each month. If you have no or low interest loans and you owe for things that still have value...house, education, car, furniture, it might make sense to take more time to pay them off. However, if a high percentage of your income is going to service your debt, or you owe for vacations and dinners from years ago,sacrifice to pay it off should be a priority.
iVillage Member
Registered: 12-31-2010
Tue, 02-26-2013 - 2:26pm

Jen -

Great topic to get opinions on, and istn't it true that we always have a "want" list we would love money to go into?

For the past 5 years I have been basically paying down debts.  When we did get a refund or something extra, I used it to pay more debt or fund something small.  Basically now every pay is going to bills and debts and I am just hoping to make ends meet the next year.  We have a lot we need to do to our house, but everything is on hold until we are more stable and debt is paid off.

I would love to MAKE $185 a week right now - let alone be able to save it!!  My income has fallen drastically the last year and my DH is still spending like there was no change.  My take home this month was $200, and that is after working over 60 hours per week.  Having your own business takes all the resources you have.

So our goals are to continue to pay down debt pay bills and tuition or our kids, and use what trips I can get for free for our vacations.

I would suggest that if you have children, you really start saving for their college costs as soon a possible.  IT is so expensive and your income is automatically counted toward the funding formula, so they EXPECT you to pay your fair share.

#Marie
iVillage Member
Registered: 11-14-2008
Thu, 02-28-2013 - 9:58am

Oh finally I can get on the board! Goodie.

Jen I feel where you are coming from. I was like this a lot last year. Trying to save up to have the baby and buy all the things we needed.  Plus do some renos to make sure each of the kids had their each room. Then trying to pay off our car before baby. We had just finished paying off my husband's student loan the year before. I just got a roof loan, I was trying to save money for the boys for school . 

Too many places that needed money and trying to make ends meet. It was so stressful. There is only so much money period! 

This is really about prioritizing as others have said and really sticking with it. Try to pick a plan and stick with it. What we found helpful was our percentage system with extra money that came in . We sat down and decided what we would do with extra cash if it did come in. Tax returns, bonuses, gifts from others....you could go %50 to debt or %50 to wants or certain percentages to very specific things. You will decide this. 

It sounds like your education is very important(and this will make you more money down the line so I fully support this AND I think you willl get some thing in your field soon, I can FEEL it!) so may be that should be number one? And its only for one more year. I personally like to have one target debt and one target savings. For you would that be the vacation with this opportunity? With all the things that come up with the kids in a year don't drive yourself too crazy trying to fill too many pots.

Just my opinion above. Whatever you decide on will be great for your family!

Karen

Community Leader
Registered: 08-25-2006
Fri, 03-01-2013 - 12:25pm

I don't do good with too many goals going on in my head at one time.  I have to pick one at a time.  Doesn't mean I am not mindful of my other goals, but I can only focus on one at a time.

With that said, if you have one plan, that consists of putting a few bucks towards a few bills, or a few envelopes, or a few accounts, or what may have you, then in theory that could still work.  

I guess it partially depends if you are sending money into outstanding debt, or are you putting cash away for something.  I ask, because you can always reallocate saved cash.  Kind of stuck if you are paying off a bill or loan.  Have some flexibility if you are paying off a CC.

Anywho, don't know if any of that was helpful, but wanted you to know you are not alone.

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