How We Arrived At Our Goals

We have a few specific goals for our life, and like most goals they are tied to money. We have divided our goals into two lump monetary goals: savings account balance, and debt payoff amount. On our homepage (www.journeytoourhome.com) we have created two bar graphs to gauge how close we are to achieving our goals. If we don’t fill up the left bar graph we can’t build. If we don’t decrease the right bar graph we won’t have the right debt to equity ratio to secure a loan.

To arrive at our first number we had to make some educated estimates according to the information we had available. The left hand bar graph represents the 20% projected building expenses we need to get a construction loan PLUS a rough estimate for a 3 month emergency fund. We haven’t completed a spec sheet yet so this is based on a projected building expense, plus an estimated loan payment that we don’t want to exceed.

We have lived most of our lives together without an emergency fund. But with the economy still pretty much in the tank, projected pay cuts at work and jobs hard to come by I don’t feel comfortable taking on such a huge project without a little bit of an emergency fund. We are estimating a 3 month emergency fund right now, but hopefully as we pay off our debt that amount will actually grow into a 4 month emergency fund. When combined this amount adds up to a significant amount of money we need to save.

Our second visual is the amount of debt we have accumulated. This is a more black and white figure which includes credit cards, a Kubota loan, and student loans. This also includes the tuition reimbursement I’ve received from my company: there is a repayment plan, so if I leave the company before it is fully ‘paid’ off, I will have to pay it back. Reviewing everything individually didn’t look too bad, but I was pretty shocked and surprised to find out just how much debt we have accumulated over the years!

Having the two visuals will (hopefully) help us focus on decreasing our debt!  It will be great to eventually be debt free! We are really hoping that the left side will go up as the right side goes down. I will be posting our budgeting plans and goals soon!  But for now, those bar graphs on the front page actually represent something real and attainable. It just might take us a couple of years to get there!!