Saturday, May 19, 2012

Eating a Balanced Diet of Green

At times looking at the future is an exercise in energetic ambition, which leaves me more determined to meet our (often financial) goals. On occasion it is an exercise in horrific impatient and feelings of hopeless desolation. The future certainly runs the gambit.

Cohabitation and the wonderful realities of having a complete life together have made the future a more tangible prospect where we are able to explore larger goals, like travel and a house.

Our first goal, however, is to be out of debt and maintain a bit of travel at the same time. We're not quite sure how this will pan out in the long run, as our debt is a huge portion of our income. Debt takes up 27% of our current income to be exact. 

A friend posted an interesting financial theory and articles on her blog here. I heart that blog. Go read it.

This financial theory states your Needs should be 50% of your income, your Wants should be 30%, and the remaining 20% belongs to your Savings. 

Perhaps this goes without saying, but Gabe and I don't meet any of those requirements. After reading the blog, we tried to figure out where our money goes if we divided life into Needs, Wants, and Savings.

Our Needs encompass our beastly mortgage, debt, groceries, charity, and health funds, all of which adds to over 75% of our entire income right now (with both our incomes included, and remember 27% of that is debt). This doesn't even include our dogs, who I do consider a Need, but for the sake of the argument, put them into Wants.

Our Wants, then, sink our remaining income: dogs, car, insurance (auto and home), utilities (if we consider our phones as Wants), gift, clothing, restaurant, and entertainment funds.

Savings? Um. Nope. What a lovely idea that is. Super not a reality.

We're not quite sure where we could do better. Our newest budget is pretty awesome, and we've been successful (with the exception of Homer's accident) in staying within our budget in EVERY category (and look to be on track to stay that way through the end of the month)!

Our main financial goal is to Slay the Debt Beast. If we swing this wild plan, we'll be debt-free (student and consumer debt) in two years, eight months (December 2014). How insanely amazing would that be?!

Now, back to the future:
We're trying to figure out big coming up with a downpayment for a house of $65,000 (which is what we'd need for a $300,000 house). We're talking about a bloody far away future at this point: 2018, so six years in the future. Distant, distant future.

We think that's the soonest we could get that money together...and accomplishing that goal may hurt our travel plans. (We have a lot of those). Priorities...we're working on what those are and know they could change.

I suppose by that point we'd have a savings...and maybe a more balanced financial diet. 

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