Good, Better, Best Finances


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Good, Better, Best

Happy Friday, Friends! I don’t know about you, but this week has been crazy busy for our little family. Aside from having baby number two on the way, we have some other big life changes currently happening, so bear with us. We’ll keep you in the loop as soon as all the moving parts settle.

Today, though, I just wanted to share something Johnny and I discussed recently. We were talking about saving money, which means it was probably around the beginning of the month when Johnny calculates our net worth and we discuss whether (or not) we saved as much as we’d hoped.

Somehow, we started reminiscing on the simpler days soon after our newly-found life of debt freedom. Back then, saving anything was our goal because saving anything was so much cooler than watching our money go to slaying our Debt Monster. And for a while, that suited us just fine. But at some point, we knew while saving money was a good pursuit, there was probably a better one.

Fast forward a few months to another riveting OFB budgeting session. (I swear we do normal things like watch TV, go outside, and teach our cat how to stand upright on her hind legs.) After taking a hard look at our numbers, we knew we could save more money. We played around with a few categories and voila! We now had a better pursuit — saving more money. And if saving any money felt good, saving more money felt more good-er. But after calculating retirement, 529, mortgage, and other down-the-road funding needs, we knew the “more money” pursuit wasn’t going to cut it either.

We were saving money, but we were saving an arbitrary amount of money for no particular reason. So we added up all of our savings goals, determined how long we had to work toward each goal, and then calculated how much we needed to save each month to reach that goal. In other words, we started backwards budgeting to ensure we’d save with a purpose. And after years of fumbling with our finances, budgeting, and eventually saving, we stumbled on our best savings pursuit to date.

Saving is good. Saving more is better. But saving with goals and purpose is best. And probably necessary.

The great (albeit frustrating) thing with personal finance is there’s always something more. For a while, saving a dime every month was the best thing we could do. Until it wasn’t. The important thing is to keep working until you find your best. Have you ever thought about what your good, better, and best personal finance stages have been or will be?

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7 Comments

  • Reply Rob November 14, 2014 at 9:05 am

    Hi guys, speaking from experience here are our good, better, best finance stages:

    saving to regularly payoff all debts in full – it’s not a one-time thing but a continuous process.

    saving to buy “worthy” things (eg., car, house, furnishings, vacations, etc) – along with some discretionary “fun” things (so as to enjoy life a tad)

    investing savings (conservatively, in our case) to make every dollar work hard and generate more passive income. You can only budget so much. You can only earn so much. So the only other thing that you can do is to (hopefully safely) invest so as to leverage those savings into generating even more income. Don’t believe me, ask Warren Buffet! :-)

  • Reply Alexis November 14, 2014 at 12:10 pm

    I like to make different kinds of goals and lay them out in different excel graphs. Keeps me organized and I make sure to look at it daily.

  • Reply Caity November 14, 2014 at 9:02 pm

    For the first few years of our marriage, we just saved money without a purpose. Thankfully, we took the “Financial Peace University” class and realized we needed to get rid of our debt! Now, we have money saved for specific goals, but it’s just sitting in a savings account earning a few cents per month. I know you suggest saving in money market accounts, but can you point me in the right direction? Is an online money market the best place to start?

    • Reply Joanna January 10, 2015 at 9:19 pm

      If you’re looking to use that money within five years, your three most practical options are a money market account, a CD, or an I Bond (but this needs to be at least five years for no penalties). Sorry for the delayed response… we’re still catching up after the move and holidays. We’ll hopefully do a more detailed post on this in the near future!

  • Reply Jenna November 15, 2014 at 8:32 pm

    We were quite happily carrying along for awhile just spending less than we earned, until suddenly the 9% savings that sort of happened naturally wasn’t enough anymore. I think I get what you mean!

  • Reply Jayson @ Monster Piggy Bank November 18, 2014 at 4:36 am

    You seem to be on the right track in saving. I like the idea of saving with a goal and a purpose. Doing this way will surely hit your target whatever obstacles may come to you two. Happy saving! Looking forward to reading your post about baby # 2.

  • Reply Melanie November 18, 2014 at 10:54 am

    Hmm I think “good” was paying off all my debt and living within my means
    I think “better” is not only living within my means, but living below my means at a 30% savings rate is better (I’m in this area now).
    I think “best” would be somehow saving for the down payment, a replacement car for 5+ years in the future, investing (not just retirement investing), and having savings for all wants: vacations, especially. That’s almost like “best” would be having more money than you I could handle, which is not the case presently, haha. Right now I just save as many hundreds as possible a month and figure I’ll need to be doing that for another year or two before enough would be there for a down payment…so I guess right now the theme is save, save, save. :)

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