Once we went debt free, our focus was on funding baby step 3! Our goal for the FFEF (fully funded emergency fund) was to have at least 6 months of expenses saved or 6 months worth of John's pay saved. And just a few days ago.... WE ARE OFFICIALLY 100% FULLY FUNDED. Baby Step 3, check!
Thats how we feel about this accomplishment!!! ;) We still cant believe the rate we are going with this. I hope we dont lose this momentum we have goin for us. Anyway, in order to make the most of our money, we decided to open up a high-yield savings account vs leaving it in our money market savings. The highest one we found at the time we were searching was through Citizens Access with an APY of 2.35%. We've compared it with companies such as Ally, Barclays, and Discover (they do offer bonuses for signing up) and found Citizens to have the highest APY. We've been banking with them 2.5 months, and no issues yet.
With FFEF being fully funded, we have been focusing on saving up for our trip to the Philippines at the end of the year. My side of the family does family reunions there every few years and so far, we haven't had to miss any. We have no debts, baby step 3 is fully funded, so this was a definite yes. We're just waiting on John qualifying so he can put his leave request in. If we hadn't gone debt free this early on, I'm not sure if this trip to the Philippines would be possible for us.
And finally Baby Step 7 - Build wealth and give. This is the ultimate goal. We want to be able to build wealth and give back, eventually. We haven't gone this far in the plans yet. We've got a long way to go, but having a path to follow is a start. Remember these are all plans, and can or may be altered at some point down the road. We don't know what the future holds for us, but at least we have a lay out of what we hope to happen.
If you would have told me 10 months ago that we would be where we are at today, I'd just laugh and say "yeah right!" This is us, your average family of 4, with 1 source of stable income, earning 5 figures. IT IS POSSIBLE. The goal is to eventually make or have a net worth of 6 figures, but we'll cross that bridge when we get there. Also, when I say 1 stable income, its because Im self employed, so I don't have a fixed income, and I don't always make the same amount of money monthly. It could be more or less depending on how much or how little I work. So most of my income goes to savings, or under "family things" like trips.
A quick background on ourselves. I got my bachelors degree in Education. I was a long term substitute for 2 years and was getting ready to apply for full time positions when I found out I was pregnant. So instead of applying for a full-time permanent position, I stuck with subbing until I went on maternity leave. I ultimately made the decision to be a stay at home mom, ran my small photography business and planned on going back to working full time once Tristan was 1 years old. Well, I unexpectedly got pregnant with my second when Tristan was 10 months old, and Amelia came along. So my plans to go back to work have been on hold indefinitely. I did give it a shot for a few short months and worked for the City, and realized it just wasn't the right time. I do work from home as an online teacher. Its been a blessing and a great opportunity to be able to still teach and not worry about the cost of child care. I teach early in the morning for a few hours a day and I'm done by the time my kids are up! I also have plans on re-opening my business while in Charleston, we'll see where this goes.
As for John, he is a Chief in the US Navy and has been in 12 years. He joined straight out of high school and plans on staying in for 20 years. He also plans on getting his degree while in the military. He'll be around 38 when he retires and wants to get another career once he retires from the Navy. We're definitely not your 6 figure income family. If you've been hesitant about going on a debt free journey because you don't make a certain amount of money... Just go for it. Remember, you have nothing to lose and everything to gain.
Thats how we feel about this accomplishment!!! ;) We still cant believe the rate we are going with this. I hope we dont lose this momentum we have goin for us. Anyway, in order to make the most of our money, we decided to open up a high-yield savings account vs leaving it in our money market savings. The highest one we found at the time we were searching was through Citizens Access with an APY of 2.35%. We've compared it with companies such as Ally, Barclays, and Discover (they do offer bonuses for signing up) and found Citizens to have the highest APY. We've been banking with them 2.5 months, and no issues yet.
It was easy to fall off track when we went debt free, cuz hey we have so much more money for ourselves to play with, right? And to be honest, we slipped a little. Since we just moved to a new house, we went a little over budget on "house furnishing" funds in April. BUT, we picked back up and reminded ourselves we have financial goals. Nothing has changed with the way I budget, except that instead of having the "debt category" we now have more room for "paying" ourselves in the savings categories. I made that plural because we plan on opening up multiple savings accounts, or mutual funds, or whatever investment thing John wants to venture on. He's been researching different ways to invest since we started our debt free journey. He does all that and relays the info to me and then we will decide together.
We originally was going to use the profit made from the house to get a mini van, because we felt it was more convenient for us with two little ones. We ultimately decided that the van can wait. If we buy a car in the future, we want to be able to pay for it up front vs taking out a car loan and racking up interest rates on it. Been there, done that, no thank you. So it's something we have to save up for, just like anything else we plan to buy. If we cant afford to pay cash up front for it, or know that we have enough money in our checking account to pay it in full, we're not buying it. This doesn't mean we've become this boring family who does nothing. We still enjoy ourselves, and go on trips, take the kids out, go to movies, eat out, the typical stuff, we just stick to a budget. We went on a 6 day Disney World Trip back in December for Tristan's birthday and in March we went on a 10 day trip to Spain. It was the first time out of the country as a family. In June, we plan on taking a trip to Legoland for Amelia's birthday. Since we've crushed our FFEF goal, we figured we'd celebrate by taking a family trip.
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| Disney World - December 2018 |
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| Ronda, Spain - March 2019 |
With FFEF being fully funded, we have been focusing on saving up for our trip to the Philippines at the end of the year. My side of the family does family reunions there every few years and so far, we haven't had to miss any. We have no debts, baby step 3 is fully funded, so this was a definite yes. We're just waiting on John qualifying so he can put his leave request in. If we hadn't gone debt free this early on, I'm not sure if this trip to the Philippines would be possible for us.
Our goal after the Philippines trip, is to start putting money towards our future forever home (baby step 3b?) while also working on Baby Step 4. John was putting in 12% of his pay into his TSP, which is the military's version of a 401k. He has since increased it to 15% and as Ive mentioned before, we're looking into other places to invest our money in.
As for Baby Step 5 (Saving for kids College fund) - Since John is in the military, He will be sharing his GI Bill to be split for each kid. We've also been putting money in to each of their Savings account each month and is looking into College Savings Plans. Any monetary gifts they receive right now, also goes directly to their savings account.
Since we sold our house and is currently renting, Baby Step 6 doesn't apply to us. BUT we are saving up for a big downpayment for our future forever home. Our goal right now is to save up $100k in downpayment by the time John retires from the Navy. If we surpass that, then that would be amazing. Somewhere in between, we also plan on saving up for a new (used) family car - a bigger SUV or a minivan, we'll see.
A quick background on ourselves. I got my bachelors degree in Education. I was a long term substitute for 2 years and was getting ready to apply for full time positions when I found out I was pregnant. So instead of applying for a full-time permanent position, I stuck with subbing until I went on maternity leave. I ultimately made the decision to be a stay at home mom, ran my small photography business and planned on going back to working full time once Tristan was 1 years old. Well, I unexpectedly got pregnant with my second when Tristan was 10 months old, and Amelia came along. So my plans to go back to work have been on hold indefinitely. I did give it a shot for a few short months and worked for the City, and realized it just wasn't the right time. I do work from home as an online teacher. Its been a blessing and a great opportunity to be able to still teach and not worry about the cost of child care. I teach early in the morning for a few hours a day and I'm done by the time my kids are up! I also have plans on re-opening my business while in Charleston, we'll see where this goes.
As for John, he is a Chief in the US Navy and has been in 12 years. He joined straight out of high school and plans on staying in for 20 years. He also plans on getting his degree while in the military. He'll be around 38 when he retires and wants to get another career once he retires from the Navy. We're definitely not your 6 figure income family. If you've been hesitant about going on a debt free journey because you don't make a certain amount of money... Just go for it. Remember, you have nothing to lose and everything to gain.
