Mr. Keller and I were talking about our 2015 financial review this morning. It was just a casual discussion as we prepared for our day, but it left me with a lot of emotions and questions. I realized that I needed to take a deeper dive!
The quick discussion that we had was really empowering. I was left feeling very proud! We realized the amazing progress we had made in just the last twelve months: student loans, 0% credit cards, and car loans were all paid off! We were left with just our mortgage! In addition to that, we are now regularly funding our children’s college education funds, we started IRAs, and we increased our investment in my 401k. Those are some results! As Dave Ramsey, would put it, we went from being normal consumers to being Weird!
As I thought more about it, I went from feeling really proud to just being a mixed bag of emotions! I was still proud, but I was also feeling cautious as I wanted to run the numbers to double check everything. Additionally, I felt challenged to do more!
First, I pulled up all of our bank accounts and ran the numbers. We did, indeed, pay off about $60,000 in debt over the past twelve months. Nearly half of that was an auto loan that we paid off by selling my super nice but excessive GMC Yukon. We then paid for a Honda Accord, half with cash, and half with a loan, but we paid off that loan just a couple of months later with my bonus. At this point, we were taking the Dave Ramsey Financial Peace University class, and Dave’s teachings about getting rid of all debt really started to sink in! I took the money out of savings to pay off my student loans and 0% credit card balances! Before, we had just been making monthly payments on those items because their interest rates were low. It seemed silly to pay them off when we could afford the monthly payments and pay interest that was less than the typical inflation rate; however, I decided to give Dave Ramsey’s zero debt thing a try. After all, he’s a successful guy, and we didn’t seem to be making much progress on our own.
I am sooo glad that we finally paid off those debts! It’s so freeing to only have a monthly debt payment related to our mortgage! Plus, by removing those monthly payments, we had the cash flow each month to finally set up 529 plans for our children!
Those things are well and good, but I also wondered if our savings had actually increased. We had put all of this money towards debt re-payment, and much of it had come out of savings. What was the impact of that?
We actually increased our savings by nearly $43,000! I had increased my 401k contribution mid-year, and that helped tremendously! We also opened IRA accounts. Even better, part of how we reached that $43,000 number was that we were consciously putting money each month into our savings account. We really have a lot to be proud of in 2015!
I think I’ll probably ruminate on this financial review a little bit longer. There are lessons here that we can take into 2016 that will help us save more! Once I get those strategies down, I’ll write another post for you! I’m hoping that by posting the Keller family’s financials, anyone who reads this will feel motivated to improve their financials, too. Maybe rather than competing among ourselves for the best possessions, we can compete for the highest savings rates!