We’ve brought back the listener's mailbag. Today we’re answering your family and finance questions about saving up for multiple goals, revamping your budget, and travel planning tips!
Family and Finances: Better Budgets and More
One of my favorite parts about Simplify and Enjoy is the community.
While I'm happy to share our journey as a family: the projects that we're taking on, the goals we're trying to reach, it's always fun to get your take on things to hear your questions, stories, and celebrate your wins.
Today, we're going to wrap up this set of episodes by answering three questions from you.
First, we're going to get into how to save from multiple goals. This is a challenge for a lot of families because not only are they trying to save for retirement, maybe put aside something for their kids, college expenses. They also have to make sure there's enough money to replace the cars, take family vacations, get gifts for others and so forth. So, how do you juggle it all?
Next we'll talk about how to adjust or if needed, revamp your budget. We're halfway through the year. So I knew a lot of families are looking at things that are working and what's not.
They want to finish this year strong, so they want to redo their budget. We'll go over some tips on what you need to adjust and surprisingly, some things to avoid when working with your budget.
Finally we'll examine how to plan and budget for family vacations. I think it's something that we all need, and many of us are excited about getting back to. And at the same time, we want to stick with some of our other financial goals and keep that on target.
I'm going to share some tips that have helped us manage family vacations and still stay on budget. We got a lot to cover today. So let's get started!
Resources to Manage Your Money Easier
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Grab Your Copy: Jumpstart Your Marriage and Your Money
- Living On One Income: How Families Can Make the Switch
- Getting Good with Money and Dumping Debt
- How to Easily Create a Flexible Financial System
- How to Snag a Great Deal When Buying a House
- Travel Hacking Your Family Vacations: Discovering Epic Deals
- Flexible and Affordable Family Vacation Ideas for This Year
If you want to chat more about creating better money habits, questions, or share your own tips, please join us at Thriving Families on Facebook.
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union! Come check out Coastal today if you’re living in the Raleigh Durham area and looking to bank better.
As a credit union, Coastal serves its members first and foremost including an annual loyalty bonus.
Rollover Your 401(k) Easily with Capitalize
We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier.
Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years.
And because of the Great Resignation, you or someone you know might be changing jobs even more
It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?
One huge benefit of an IRA is choosing how your money is invested, not your old employer.
If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.
With Capitalize, they handle the process from start to finish – for FREE and yes that includes calling the 401(k) provider on your behalf.
Find out how and get started today!
Juggling Multiple Goals
First, I want to give a shout out and say, thank you to Adam for sending this question in. Adam emailed me and we were discussing budgets and handling different goals. In particular, he was curious about how we handled our finances with saving up for retirement, car purchases, gifts, college savings, the whole deal.
I think a lot of families are dealing and honestly struggling with this, right? Because we're trying to take care of multiple things simultaneously.
Everyone handles their budget differently so I'm going to share how we handle this and why I think it works for us. Then hopefully it gives you ideas on things to try out and to discuss so you can come up with a plan that makes sense for your family.
Like many people when we first started off budgeting. We used one of those recommended tools online. Where you give your income and it gives you a very basic breakdown based on percentages. Where you cannot spend more than 25 to 30% for housing. Have 10% for giving, certain percentage for utilities, groceries, so forth and so on.
I do believe that those can be a helpful springboard for a conversation and can give you a guideline of where to start. But even within those categories, Things can vary greatly.
For example, housing is a huge expense for families much more than what's recommended. I'm not saying you shouldn't adjust it, but you may be at a point that now currently you're spending more than what is recommended.
At least having those numbers and seeing what's in front of you gives you an idea of what needs to be adjusted down the line.
For many families, I recommend start out with a simple budget. You can use one of those templates. You can use the 50, 20, 30 budget and then test drive that for a month or two. It gives you an idea of specific areas in your budget that you're doing really well in. Maybe you're spending less on groceries than you anticipated, and then areas where you looking at. Okay. We do need to get better with this expense.
By being consistent, we did make progress and we knocked out multiple goals. But we didn't do it at once. The critical thing for us was setting up priorities.
When you're weighing everything you could be doing, saving up for emergencies, family vacations, paying down debt, investing for retirement, setting aside something for the kids' college expenses. Listen. It's easy to spread yourself then so thin that if you're trying to knock them out simultaneously, You're progressing at a snail's pace. Not only are you not seeing the numbers move as fast as you want? You're giving yourself ammunition to quit.
Instead, what we did is we review our goals. Regularly. And then we break them down and there's four things that we look at.
One, the timeline of the goal. Is this something that we want to finish by the end of the year? A few years or something that's 10 years or more.
What are our current needs and concerns? For example, these past couple years, we've been a little more conservative with our financial goals than we had previously just because of the uncertainty of what was going on.
The third factor is discussing how much. For example, with buying a car, how much are we setting aside for that? With debts, we're looking at the amount and add interest rates to.
Finally, is this a reoccurring goal or is this a goal that once it's done, it's done.
When we have those discussions, we can have a clearer idea of the one or two goals we're going to give our attention to.
For example, when we were first married, we had around a little over $30,000 of debt and a little bit of savings. Our priorities at that time were to pay off the car and student loans and then make sure that we build up our financial cushion.
With once we knocked out the car loan, we then reevaluated things. We definitely wanted to focus a bit more on savings, including replacing future cars. That led us to the decision of going cash with our cars. Meaning we haven't had a car loan in over a decade.
We prefer to pay for it ourselves. So we set aside a ballpark range and initially we were looking at the 5,000. Now I say we save about $10,000 for cars.
Focusing on Nissans, Toyotas, and Hondas with good reliability records has meant that we have the money saved up well, before we need it thankfully. My advice to you when it comes to cars is make sure you're as diligent as you can with the essential maintenance.
The benefit of tackling it one goal at a time is we gain traction when we hit a goal. We now have more momentum to work on the next, and it might seem like it's slower because we're only doing one or two goals at a time. But looking back, it really does go fast.
You probably know why, if you're familiar with Dave Ramsey and his baby steps. When you direct your money to fewer goals, it speeds the process up. It also serves as motivation to keep moving forward, which to me is a double win.
Finally, I would say the other key factor is once we had a budget in place, we would then automate it to make things go smoother.
I hope that helps you with figuring out one what goals you want to tackle first. But then to having a system that helps you follow through without stressing you out.
Revamping Your Budget Mid-Year
With this year being just over the halfway mark, the second question makes total sense. How do we revamp our budget?
To a degree, our budgets reflect what's going on with our day to day. A lot of families right now are seeing certain areas of their budget increase with inflation. They're trying to keep things under control and they're trying to juggle things well, if I'm paying more for groceries or if I'm living in an area where rent is jumping. Hi, how can I adjust my budget so that I'm still making progress on my goals? How do I keep that momentum going?
One of the best ways that you can pivot and update freshen up your finances, whatever you want to call it. Is by creating a roadmap for your money. Yes. That definitely includes having some kind of budget in place. Like we discussed with the first question. But more importantly, it's looking at the big picture.
Before we assess and adjust the numbers, we do need to go back to talk about those goals. When you have multiple goals going on. It is especially important to learn, to prioritize them and make an adjustment if the circumstances have changed enough.
Let's talk about a goal that I think a lot of families are worried about. They had been planning on buying a house. But depending on the area you live in, the market might be a sellers market right now. Prices might be jumping for even a fixer-upper. And then on top of that, you have higher interest rates.
What should you do? Well, there are a few questions that you need to sit down and really figure out before, you know what your next move is.
You may decide that now is not a good time to buy a house. You ran the numbers and if you purchase a house now, you would now be house poor and financially vulnerable. So you may decide to push out the timeline and build up your down payment and finances in a way that you would feel more comfortable buying a house, then.
Or you may decide that no, this is a priority for us. We want to get this done. You can then discuss what are some things we're willing to forgo with our smaller or less urgent goals so that we can reach this.
Depending on your circumstances, the market you're in and your finances either choice could be valid for your family. The important thing is that you're discussing this and you're weighing the pros and cons of revamping your budget towards that priority.
Finally, there's something else that you might want to consider and this might make you feel better. Chances are, if you are listening to a podcast like this, which talks about finances. You're probably doing better than you expected. In fact, you may not have to completely revamp your budget or reprioritize things.
It could simply be a matter of adjusting some of your smaller, less important expenses. And redirecting it to your bigger, more urgent goals. And that's the great thing about having a budget. It is supposed to be flexible and supposed to be reflecting on the things that matter to you.
Dealing with everything in the past couple years, all of us. I have probably had to make some significant changes. So give yourself some credit with the progress you're making.
Just focus on being consistent and having a regular time to review your numbers. For us it's around that monthly mark. It helps us stay on target. Because yes, some things do come up. But when we catch it, then it's usually a small adjustment.
Then we can focus on relaxing and enjoying the time we have together. So I hope these tips help take the stress out. If you do need to revamp your budget, it might not be as drastic as you imagine it. Or if you do have something that you're trying to knock out this year, a priority that's important to you. You know how you can discuss work on it as a team and knock it out.
Family Vacation Planning Tips
Alright; our last question is fun. It's about how we plan for vacations. We actually just got back from our summer trip. We went outside of Asheville, spent a week out there at an incredible Airbnb. We could just see the mountains from it had a beautiful large deck.
It was a great time to just decompress and explore the parks around there with the kids. We find getaways necessary, not just during the summer, but throughout the year.
There are a few things we do to make that happen and still stick with our budget. First off, here in Raleigh, they offer traditional and year round schooling. Our kids are in the year round program. They're in school for about like nine weeks and then they get three weeks off.
Over here, they call them track outs each season. For our girls there in October, the big one is in the winter with five weeks off in December and January, a couple of weeks off in April, and then in July.
What I love about that is it gives us some off season time to travel and that itself can save us some significant amount of money.
Our big family vacation tends to be around October. That's in between the summer crowds and the families going out for holiday trips leader in the year, we can usually get a great deal. So time of year is definitely a big factor.
Then also the types of vacations or trips we take do matter and help us to stay on budget. We try to use that schedule and take a trip every season, but it's not always a long trip. Sometimes we do what we called the small getaways . Being in North Carolina, we feel really grateful because we can do road trips. That include going down to the beach. Or we can go to Asheville and get that mountain experience.
We really enjoy. Both of those vibes. What we found is by timing those trips and how long we go. We can get a lot more vacation time. Without really seeing a jump in our budget. If we want to go, for example, to the beach in the summer, we're going to go but we're going to do it maybe for an overnight or a short stay.
It's going to be during the week. That is great because it's a little less crowded and we can usually find a deal on Airbnb. If we're going to go for longer getaways at a certain point, like five to seven days. I would go for the week because some hosts offer a discount for renting it out for a week.
That's also something to consider when you're planning out your vacation. If you remember, I did an interview with Justin who right now is in the middle of Europe.
One of the tips he offered was looking for those longer stays. In his case it was the same price to stay four weeks in The Bahamas then, just two weeks because of that longer stay discount.
Look for those opportunities. Don't automatically assume that if you stay longer, it's going to cost much more. You might find an opportunity where it's a huge win-win for your family.
With remote work, being a possibility for some, this can open up opportunities to take vacations off season. I'm really happy that we ended this round of episodes with tips on vacations. If you have any more questions, please reach out to me. And also I will put some of my favorite travel resources in the show notes.
I hope you have a great summer break!
Support the Podcast!
Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.
- Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
- Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
- Grab a copy of Jumpstart Your Marriage and Your Money.