I don't often practice or advocate extreme savings or extreme frugality, or really extreme anything. I'm much more likely to advocate a picnic lunch than a cross-fit workout, and one of my favorite activities is bicycling at a liesurely pace on pleasant days. All this to say, Rob and I are breaking character at the start of 2016! We are going to Balls to Walls (which is a shipping term not a weird sex term), and attempting to max out my 401k and Individual HSA by June (the projected end of my maternity leave + accumulated vacation time).
That's Right, the Unplanned Family is going extreme (for six months). I think we may have drank too much PowerThirst (Can I get an Amen on the powerthirst reference from everyone who loved the early days of YouTube?)
That sounds dumb. Why would you do that?
Good question. One reason for that we're excited about this exercise is that it will simulate what it is like to live off of Rob's income and our rental income only. My take home pay will drop to just covering childcare expenses and giving (which we won't cut back on until I quit working).
One thing that we haven't experienced for over a year is something that we would consider a tight budget. We haven't had to make tough decisions about things that we consider part of our basic lifestyle (functional house, functional vehicle, delicious and plentiful food, medical care, and disposable diapers). By immediately funneling money into investment vehicles, we will have the opportunity to test that we can still make those decisions without straining our marriage.
This will be an important test as we determine my working future.
By the way, this idea wasn't even mine. I blame Matt from Mom and Dad money for encouraging us to make 8 Financial Moves before the end of the year. One of the moves was to plan your savings for next year.
In case you're looking at the date on his post, and the date on this post, you can correctly assume that this plot was hatched, discussed and agreed to yesterday. It was probably under the influence of powerthirst.
What about your beloved house project?
Another great question! We've got around $12K remaining in our house budget. Approximately $5K will be eaten up next month with the purchase of cabinets and the remainder of our flooring, but we have reason to believe that $7K will be sufficient for our new countertop and our bathrooms.
We live in a low end neighborhood, and we run the risk of overbuilding the neighborhood. For that reason, we're committed to keeping the full renovation under $30K. We're hoping that by some point next year, our home will only require maintenance and not renovations. Our projected average budget will have room for maintenance (along with taxes, insurance and more).
What about paying for the delivery of your child?
Wow! Another great question. We've nearly met our deductible, and if everything goes well, we'll probably be on the hook for an additional $2K in March. This money could come from a variety of sources. First, we will have one "extra" paycheck in January that we will hold onto in the form of cash. This paycheck won't be for $2K, but it will get us more than halfway there. Secondly, I've been doing some steady freelance work, and I hope that it will continue. This will more than cover the remaining gap. Third, I may receive a bonus around the time our baby girl is born. The timing is coincidental, and since I work in retail, I can't really say if we will get a bonus until the Fourth Quarter results are in.
Have you ever done extreme savings? Is it hard, or have I just forgotten how to do it?
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.