It’s been a little over a year since me and my ʻohana have (re-)committed to budgeting with the goals of paying off our debt, saving for a house, and many other goals. It’s a bit ironic, and in some ways helpful, that 2020 ended up being what it has been. Heck, it’s even strange thinking about how drastically things have changed since I first shared on my blog about our journey to becoming debt free back in February. In many ways, our habits were changed because of the COVID-19 pandemic, but many other changes that impacted our finances came with that too. Thinking back on the year that was 2020, I am simply amazed and still trying to wrap my head around all that has happened this year…and it’s not over yet!
I anticipate this being a multi-part series of blog posts, but here it goes…
At the end of 2019, we had set out finance-related goals in 2020 to pay down debt, save, and ultimately just execute the plan, the budgeting plan. I was introduced to Kumiko Love, The Budget Mom (“TBM”), through a friend, and we have been following her Budget by Paycheck method.
Then 2020 happens. Need I say more? We’ve experienced job losses, job gains, changes in income, we started our own business, we moved, and changes in bills. And that’s just the skinny on the finance-related changes!
Despite these changes, I think the greatest thing that we’ve gained is peace of mind. Peace of mind in the sense that we at least have a plan and are more aware about where our money is going.
Reflecting on the financial-related goals we set out to accomplish this year, I am damn proud. Even in light of the changes that came with 2020, we still managed to pay down some debt, reached our goal in saving for our peace fund (which we’ve defined as the amount to cover 3 months of expenses in the event of an emergency), and also fully funded our sinking funds.
But again, perhaps a pandemic silver-lining that we are benefiting from is the ways in which we were forced to truly re-focus on the things that matter most. We stayed home, and didn’t go out and spend money like we would’ve done in a “normal” year. And these change in habits not only benefited our monthly spending/saving, but also the ability to roll over much of our sinking funds to next year. On top of that, much of what we saved for with our sinking funds we ended up just cash flowing.
Habits that we’ve gained this year have definitely changed our mindset on money. Sinking funds have been a huuuuge game changer! This will help us not fall back into more debt. Also, while the TBM’s method typically encourages using cash and cash envelopes, we did use cash at the beginning, but switched to cashless during the pandemic. Something that we also stopped early on in this process is no longer using credit cards, with the exception of Costco gas. Or if we do use our credit card, we pay it off immediately.