#youneedabudget

I track our finances in YNAB. I do a quarterly review in Mint. I have a Personal Capital account as well that I just started. But even with all the tools I use, I found myself asking when I'm going to get out of debt. What will our turnaround point be?

Tonight, I crunched the numbers. I kept it simple - going off of today's balance, and I didn't include interest which would obviously skew things. I wasn't going for scientific precision here - just wanted a ballpark of what year we could expect to be debt free.

We are currently paying minimum payments on our boat, student loans, and car. If we change nothing, the last payment we will make on our debt will be in January of 2031. If I take the same numbers and apply them in the snowball method and get aggressive, the last payment will be in September of 2022. We will pay off the boat first (5.25%), the car off next (8%), and the student loans off last (a mix between 3-6%). The goal with paying off the boat before the car and student loans is because that will allow us to have an asset that we can sell if we decide to do so. Our current plan is to maybe use this boat to upgrade to our next boat (not bigger, just sturdier - more blue-water friendly). If we did this, the goal would be to sell the boat and use the cash to pay off the next boat in full as to not get into another mortgage.

In our family every child gets a dish job. They are responsible to do that same job every day. For example, I clear the table and the counters. This arrangement teaches us to work and it keeps the kitchen clean.

This can be the same with my budget. When I make sure every dollar has a job, my budget gets “clean”. I feel confident in the money I spend because I have given every dollar a job, and I know that the money I spend is supposed to be used for that reason. 

A budget is meant to organize my money. But how can I fully use my budget to its full extent if I put all my money in one place? A budget helps me decide my priorities. And then I can give every dollar a job based on those priorities. Sure, putting all my money in one place to one category/priority is giving it a job, but I can do better than that! I choose my priorities and then give every dollar a separate job, helping to get the whole kitchen clean :-)

If all of my brothers and sisters has clearing as their dish job, the counter would get clean. But nothing else would. So spread your money around to all of your priorities, and give every dollar a job.