I hope everyone had a great Thanksgiving holiday! I am writing this post a little late in the week because we were fortunate enough to spend a lot of quality time with our families and friends! I hope you were able to do the same. In my post today, I review some ideas we are tossing around in our household on what to do next after eliminating our debt AND I am asking you how you adjusted your budget after a big change in life (e.g. eliminating debt or having a child).
After making our last student loan payment of close to $7,000 in mid-September, we are still trying to figure out what to do with the $1,600/month in debt payments we used to have. We do have a few changes in our life – the big change being the addition to our family of our beautiful daughter, Hattie.
Our original plan was to eliminate the debt so that we could cover daycare costs, which in Minneapolis are close to $1,600/month for young children. We are still trying to decide what we will do next – will my wife go back to work and we bite the bullet on daycare? Or, will she stay home with our daughter? Either option will work financially for us; we need to figure out what will be best for our family.
Some advice I received listening to Scott Alan Turner’s podcast was to find a good financial planner to help you plan for the future. What is vital when you are looking for financial planners is to ensure that they are fiduciaries – that they have a legal liability to do what is in your best interest. Best of all, they do not focus on selling you different policies. Instead, they help you plan for the future to meet the goals you and your family set.
The first two financial planners I worked with only focused on selling me products. They did not help my wife and I set goals and build a financial plan around achieving those goals. Luckily, I started saving into my 401(k) at a young age so that my investments will be able to compound over a long period of time.
Two good sites to look at are the XY Planning Network and Garrett Planning Network that will help you find advisors in your area. I used the XY Planning Network to find the financial advisor my wife and I are working with. So what is next for us? We sat down with our financial advisor to set goals and we are in the process of developing a plan to achieve these goals.
The top three goals we set and are working toward are:
- Save a good chunk of money for our daughter to go to college. We plan to have two children, so that doubled the number 🙂
- Buy a lake property
- Retire earlier – we do not want to work until age 65.
Now, for each goal we got much more specific on actual numbers needed to be able to achieve these goals.