2016 Financial Goals

2016 Financial Goals (2)

Happy New Year! I hope you all had a wonderful Christmas and New Year celebrations!

I want to quickly apologize for being “M.I.A” over the past several weeks. It was honestly a combination of feeling downright crummy from awful vaccines and “normal” third trimester aches & pains/exhaustion. As well as being quite overwhelmed by what 2016 has in store for our little family (the big ones: baby & overseas move) and everything we need to do to prepare for these big life events. It will definitely be a crazy and busy but wonderful year full of many blessings. AND I am finally feeling up to jumping in with both feet. 🙂

2016 Financial Goals

I thought I would start out the year by sharing our 2016 financial goals, to give you a little insight into our focus and planned direction for the year.




Our primary financial goal for 2016 is to become 100% DEBT FREE!!! YAY!!! We will need to pay off $19,418.25 in order to reach this goal. Considering we paid off more than $40,000 in 2015. We should reach this goal without too much difficulty. Our best estimate is we should accomplish this goal between August and October.


  • CASH FLOW OUR PCS (Military Move)


Although we are so excited to be moving back to the U.S. this year. It also means it is going to slow our financial progress because we will need to save for the move. We have received notification of orders and it looks like we will be moving to a high cost of living area somewhere between July and September. Once my husband receives official orders (hopefully within the next month or so), I will share where we are moving and our detailed financial plan to make it happen. For now, since we don’t even know exact details. Our plan is to start saving in February with a goal of $9000 saved before our move.




Once our debt is paid off our focus will turn to investing for retirement. We currently invest approximately 8% of our gross monthly income. By December 2016 our goal is to increase our investments up to 20% of our gross monthly income. This should hopefully create a comfortable nest egg when the time comes to retire (about 30 years down the road). 




Our goal is to establish an ESA or 529 Plan for our baby boy. We do not have a set amount that we want to invest this year. We just simply want to get one started! Just for those of you wondering. We do not plan to pay for 100% of our child’s college education. He will be expected to work part-time and apply for scholarships to help pay for some of the expenses.

Some of you may be wondering about using the G.I. Bill to pay for our child’s college expenses because we are a military family. However, my husband currently has the Montgomery G.I. Bill and it has to be used within 10 years of military retirement. My husband should retire from the military ~12 years before our son is college age. 

My husband could transfer his Montgomery G.I. Bill to the Post 9/11 G.I. Bill (which children just need to use by the age of 26 years) which he probably will make the switch in the the future. However, my husband will most likely use his G.I. Bill to either finish his Bachelor’s Degree or earn a Master’s Degree. So we still plan on saving for our child’s education separately.


What are Your 2016 Financial Goals?

I would love to hear your financial goals for the year! Please share in the comments! 🙂


2015 Financial Goals

Did you think I forgot about our 2015 goals? Well, unfortunately we did forget about our goals a bit as the year progressed and you will see how miserably we FAILED at them!


  1. Paying Down Our Mortgage to Below $25,000. PASSED!!!
    With a mortgage of $19,418.25 on December 1, 2015 we easily passed this goal. Unfortunately, this goal became our primary focus and we entirely forgot about our other goals.
  2.  Travel to 6 Countries Outside of the United Kingdom. FAILED!
    We traveled to: The Netherlands, Portugal (twice), Spain, and Germany this year. Although we are 100% satisfied with our traveling experiences while living in Europe. There were several places (Iceland, Greece, Paris, Prague) that we wanted to travel and it just did not happen. With the news of expecting a little one mid-year. Our focus and priorities dramatically changed and we quickly accepted that these locations will be added to our “some day” wish list.  
  3. Participate and/or Volunteer in 7 Community Events. FAILED!
    I honestly can’t think of a single community event I participated or volunteered at and my husband only volunteered on a couple of occasions, so this a HUGE miserable FAIL!
  4. Give on 10 Occasions. FAILED!
    We did not accurately keep track of our giving this year. I can only think of three occasions when we gave generously, so I think we can safely assume this was also a miserable FAIL!

Despite only accomplishing ONE out of FOUR goals. We had a year of great financial progress and nothing to be too ashamed about. We will focus on the positive. We paid off more then $40,000 of debt and have set ourselves up to be DEBT FREE IN 2016!!! 


Are YOU Looking to Change YOUR Finances in 2016???

Be one of the first to join The $1,000,000 Challenge of 2016. HERE is a detailed post about the challenge!!! 🙂


What do YOU Think?

What are your 2016 Financial Goals?
If you were in our shoes would you have different goals/focus for 2016?
When do you start saving for a PCS/Move?


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How Investing Small Amounts of Cash can Pay Off Big in Retirement

Optimized-How Investing (2) How Investing Small Amounts of Cash can Pay Off in Retirement

In light of Military Saves Week, let’s talk about saving for a bit. Yes, I more often than not talk about debt eradication. However, today let’s turn the tables and talk about compound interest working in our favor!

On Friday, I shared this article, “How a 1% Savings Boost Could Sweeten Your Retirement” on Facebook. This article demonstrates how investing just 1% of your income can make a difference in your retirement. It provides examples of different ages and incomes. Check it out.

Investing Small Amounts of Cash

What Does 1% Accomplish for the Median American Household?

Let’s consider the median income of an American household, which was $53,891 (2014). One percent of this income is just $49/month. Most of us could think of a few ways we could trim back our budgets or make a little extra money in order to “find” an extra $49/month.

Let us assume this person is 30 years old and will retire at 65 years old. Just $49 extra dollars per month will add $104,985 (assuming 8% returns) to his or her retirement! Less than $50/month and you end up with over $100,000! Isn’t compound interest AMAZING! I love when it is working for us and not against us!

This extra $104,985 will provide an extra $745/month in retirement (assuming expectant life expectancy of 100 years). Considering a 3% inflation rate, this is equivalent to $265/month in today’s dollar. This is not a huge amount, but it is plenty to keep groceries on the table or keep your utilities paid or make special trips to see your grandchildren. By sacrificing less than $50/month today, you could possibly ensure a “comfortable” retirement.

Where Can We Find $49/month?

  • Call insurance competitors and make sure you are getting the best rates possible.
  • Use one less tank of gasoline per month. Carpool, walk when possible and combine shopping trips.
  • Avoid your favorite stores. When not careful we mindlessly spend $50 without even thinking about it.
  • Eat 1-2 less meals at a restaurant each month.
  • Switch your phone plans to a less expensive plan.
  • Downgrade to basic cable or cut cable completely.
  • Spend ~$10/week less at the grocery store by meal planning, couponing, stockpiling, buying generic brands, meatless meals, and not buying convenience foods
  • Cut back on a “bad habit”: one less bottle of wine per week, 2 less packs of cigarettes in a week, less junk food, less gambling/lottery tickets, 2-3 less mochas each week, or whatever your “bad habit” might include.


Not Ready to Boost Your Retirement Investments?

You may be working hard to pay off your debt or saving up an emergency fund and are not ready to boost your retirement investments at this point. What would a “measly” $49 do to your debt? Let’s take a look!

The “Average” American household debt looks something like this (2010. last census performed):

  • Revolving Debt (credit cards): $7630
  • Student Loans: $11,244
  • Auto Loans: $8163
  • Mortgage: $70,322

What would that $49 do to this debt when applied in a debt snowball method. Only paying equivalent to minimum payments in addition to the $49…

The “Average” American could SAVE $28,367.81 in interest alone! Not only that, but they would be debt free 16 YEARS earlier!!! SIXTEEN YEARS and nearly $30,000 SAVED… with less than an extra $50/month!!!


Do you think you could find that “extra” $50 somewhere???

Where could YOU find $50 in your budget? Where are you going to apply it, savings or debt?

Use the debt calculator or retirement calculator to determine the impact of your 1% to your finances.


*Interest charges were calculated based on average rates from Bankrate.com on 2/23/15.

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Retirement Planning 101

Basic Terminology. Where and How to Invest.


Are you intimidated by the “foreign” language associated with retirement planning? Don’t worry, you are NOT alone! Plus, the basics are actually quite simple and the big shots of the finance world just use fancy words so they can justify their paychecks. 😉 LOL.

Today I hope to provide you with the basics of retirement planning to empower you to start your retirement planning. If you have already started, GREAT! Perhaps after today you will feel comfortable enough to boost your investing to meet your retirement dreams.

 Basic Terminology:

Stocks: a share of ownership of a corporation’s assets and earnings. Ranges in Risk.

Bonds: a share of ownership of a company’s debt. Low Risk. As interest rates rise, the value of bonds decrease.

Mutual Fund: an investment tool, where people (investors) pool their money together to “mutually fund” the buying of investments (stocks, bonds, etc.). A really smart expert (portfolio manager) manages the mutual fund by selecting the stocks/bonds to be bought/sold/traded. The type of mutual fund dictates what type of investments are purchased. Example: In a “Bond Fund” the portfolio manager will only buy/sell/trade bonds.


7 Major Types of Mutual Funds

  • Growth & Income (aka “Large Cap”): consists of stocks from large and fairly stable companies who have a long history of stable earnings. Low/Moderate Risk
  • Growth (aka “Mid Cap”): consists of stocks from large and mid size companies who are currently growing faster than other companies in the comparable market. The S&P 500 is one of the most well known Mid Cap Funds. Moderate Risk.
  • International: consists of stocks from foreign-owned companies Many of these companies produce and sell products in the U.S. but are owned internationally.  Moderate/High Risk.
  • Aggressive Growth (aka “Small Cap”): consists of stocks from new and emerging companies. High Risk.
  • Bond (aka “Fixed Income”): consists of bonds. Low Risk
  • Money Market Funds: extremely low risk. probably not the best option for retirement investing (not high enough returns)
  • Balanced Funds (aka Lifespan Funds): these mutual funds consists of a wide variety of investments. Typically associated with your approximate year of retirement. The idea is as you get closer to retirement age these funds will invest in lower risk options. Typically with higher fees and possibly too conservative for some investors.

TSP Funds (federal government employees)

  • Life Cycle Funds: similar to “Balanced Funds.” Consists of a variety of investments and the risk is associated with your retirement age. Associated with higher fees and may be too conservative for some investors
  • G Fund: shares of U.S. Treasury Debt. There is a guarantee on your money, but probably won’t be a good option for retirement investing (low returns).
  • F Fund: consists of bonds. Low Risk
  • C Fund: large and medium size companies. Similar to the S&P 500. Moderate Risk
  • S Fund: small to medium size companies. Moderate to High Risk
  • I Fund: international companies. Moderate to High Risk


Wondering Dave Ramsey’s Philosophy on Retirement Investing? The funds in blue text are the ones Dave Ramsey recommends. We invest very closely to his recommendations.



Is simply a fancy word meaning you are going to spread out your money in a variety of investments to lower your risk. “Not putting all your eggs in the same basket.” You do this by investing in a variety of options, possibly mutual funds. The average mutual fund has stocks or bonds of 90-200 different companies. You also do this by investing in a variety of different types of mutual funds.

If you have 5 different types of mutual funds, then your investments are most likely diversified into 450 to 1000 different companies. Mutual funds make diversification possible for the average investor.



The term used to describe the likelihood of an investment having losses, when compared to the gains (aka “returns“). The earnings of an investment with “High Risk” may look like a roller-coaster. There is going to a big difference in the highs and lows. If you can remain calm and not jump off this roller-coaster, through all the high and lows, typically over time you will have greater average returns. “Low Risk” investments are going to look more like a walk in the park. Slight inclines and declines, but nothing to freak out about.

How do you determine what investment risks to take? You will invest in mutual funds of all risk levels. If you are younger (20+ years until retirement) and you have a higher tolerance in the market fluctuations, then you may invest more aggressively with more risk. If you are nearing retirement age or cannot tolerate the dramatic changes in the market, then you may want to be invested conservatively with lower risk options.


Use Tax-Favored Investment Options

“Tax-Favored” simply means there are tax “benefits” to these type of plans.

“Pay No Taxes Now, but Pay Taxes at Retirement: aka Investing with “Pre-Taxed Dollars”

  • 401k
  • TSP (federal government employees)
  • 403b (public school employees, tax-exempt organizations)
  • 457 (state and local employees)
  • Simplified Employee Pension (SEP) (employer funded, provides pension to employee at retirement)
  • IRA (Individual Retirement Arrangement)

For most individuals, you won’t need to worry about the type. It will be decided for you based on what your employer offers.

Maximum Yearly Contribution (2014): $17,500 ($23,000 for 50 years and older). SEP is 25% of employee’s income with a $52,000 cap.


“Pay Taxes Now, but Tax FREE at Retirement”

  • Roth IRA
  • Roth 401k
  • Roth TSP

The only difference is investing with or without your employer’s retirement plan. Roth 401k’s are relatively new and so many employers do not offer them yet. We choose to use a Roth IRA, simple because we have more investment options compared to the Roth TSP.

Maximum Yearly Contribution (2014): $5500 ($6500 for 50 years or older)

Maximum Income Limitations (2014):  Single: $114,000 – $129,000. Married Filing Jointly: $181,000 – $191,000.


 How do I Choose a Mutual Fund?

There are just a few things you will want to consider when selecting mutual funds.

  • Inception Date– Try to choose funds that have been around for a while that have proven to do well in good times and bad.
  • Good Track Record– You want to look at the average returns of each mutual fund. Do not worry about the past couple years, you are investing over the long term. How has it done over the past 10 years? 20+ years?
  • Expense Ratio– the fee you pay to invest. Expense Ratios tend to be around 1%. Lower for bond funds, higher for stock funds.
  • Variety– make sure you are investing in different types of mutual funds (refer to types of mutual funds above). It would be possible to invest in 3 different mutual funds, but they all consist of the same companies, which lessens your diversification. You do not want this.

Where do I Buy Mutual Funds?

Just about anyone is willing to sell you mutual funds, your local bank, credit union, insurance company, financial advisors, financial firms, online stock trading companies, etc. You will want to consider the actual mutual funds offered by these companies and the fees correlated with each option.

  • Employer: If your employer’s retirement plan offers great mutual funds, there is no need to look any further.
  • Ask Family & Friends: inquire about their financial advisors. Do they take new/beginner clients with few assets? Are they willing to teach you all about retirement planning? After you have a few names, do your own research. Meet with a couple of advisors and interview them.
  • Find a Financial Planner: Use the CFP Professional website to find a Certified Financial Planner in your area.


Where Should I Invest First?

  1. Employer’s Match
    -Does your employer offer a retirement contribution match? Matches often range between 3-7% of your income. Invest up to the match first. This is FREE money and a guaranteed 100% return. You can’t beat that!
  2. Roth IRA/Roth 401k/Roth TSP
    – You simple can’t beat tax FREE on your investments. If your earned income is less than the maximum income limitations, then you will invest here next. Up to $5500 for each spouse. Non-working spouses CAN have a Roth IRA!
  3. Return Investing into your Employer’s Retirement Account (401k, TSP, 503b, etc.)
    -up to the maximum until you are investing 10-15% of your income.


Wife’s Income: $50,000 with 3% match
Husband’s Income: $50,000 with 5% match

Total Income: $100,000  Investment Goal: 15% ($15,000/year)


Wife’s 401k for employer’s match: $1500/year
Husband’s TSP for employer’s match: $2500/year
Wife’s Roth IRA: $5500/year
Husbands Roth TSP: $5500/year

Investment Totals: $15,000 = 15% of Gross Income

Plus, Employer’s Match Contributions: $4000/year which means you will be investing a total of $19,000 per year!

*If we needed to invest more to reach 15% we would invest additional money into the employer sponsored 401k and TSP accounts.

**If we had less income, and needed to invest less for 15% we would invest less into the Roth’s accounts and not max them out.

Retirement Planning

Planning for retirement is more than simply investing money. Start thinking about what retirement means to you and how do you imagine your retirement lifestyle. What is your ideal age to retire? Will you want to work part-time or seasonal? Where will you live? What do you want to do? Will you have passive income during retirement (pension, rental property, etc.)?

There are many things to consider, but the main point is to start NOW! Start investing, the more time you have to invest the more compound interest is going to work in your favor. Set a goal to invest 10%-15% of your income by the end of next year, or in the next 3 years.

Please let me know if I can clarify any of the above information or if you have questions! Thanks so much for reading and START INVESTING!

Shared on: Thrifty Thursday, The Thrifty Couple, Create It Thursday, Mama Gab,

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Do You Believe YOU Can Be A Millionaire?

If you have been reading Budget Loving Military Wife for a while, you know I am a N-E-R-D! I am that weird person who actually enjoys budgeting and calculating a hundred different ways to pay off our debt faster. Yes, I know. Who does that?

So you may think I have always been this crazy person who has loved saving money and living a frugal life, but that is far from the truth. I was like everybody else. I went to college so I could get a “good job” to pay my bills and hopefully have a little fun and then hopefully some day retire before I was 100 years old.

It’s not until my husband and I read Dave Ramsey’s book, The Total Money Makeover, and took Financial Peace University that I realized, we could be millionaires. We could retire BEFORE the age of 100, before 80, probably even before 60 as MILLIONAIRES! Us, you know, those two newlyweds who were $170,000 in DEBT!!! Those two who made good wages but by no means lucrative pay…


Fast forward to earlier this week I was talking with my youngest sister. She has a new job and was telling me it was her first job with a match to her retirement account. So of course I took the opportunity to encourage her to invest 10-15%, ideally 15% because they are debt free. I tried explaining a few things about different options for retirement savings and then told her I would be happy to help or answer any questions she may have in the future.

Somewhere among this conversation, I stated that I didn’t want to be the only millionaire in the family so her and hubby needed to get to investing. She laughed and thought I had gone completely mad to even think it was a possibility for them to become millionaires.

Many people think that it is impossible. But let me show you how very real my sister and her husband could be millionaires. Of course I don’t know details of their finances and even if I did, I wouldn’t share someone else’s finances on the blog. Only mine are put out there to be laughed at and criticized 😉

I won’t reveal her age either… but you know she’s younger than me. So let’s assume 25 years old. Again, I don’t know their finances so let’s make up some. Let’s say they have $1000 already in retirement accounts and they make the median American income of $54,000.

They are debt free. Will have a paid for home before they retire, which will easily be worth more than $200,000 (considering inflation). They invest 15% ($675) of their income and never get another raise to increase their retirement investments.

At the age of 65 years, assuming 8% investment returns, they will have just shy of $2.2 million!!!

Not another, single raise… just 15%… and only making the median income… and you end up with 2.2 MILLION DOLLARS!!!! Plus, the value of their home and any other assets. So easily, $2.5 Million… I think they could call themselves “Millionaires”… Yes???


Linked up at: Living Well Spending Less