FINANCIAL PEACE: 2020 Debt Paid & 2021 Goals

Oh, boy. Where to start? 2020 was a year. I'll spare you the platitudes that include phrases such as "pandemic," "unprecendented," and "dumpster fire." You've heard them. We all collectively experienced 2020 and I imagine we all collectively did not meet the goals we planned for ourselves.

That being said, if 2020 had a silver lining at all for my family, it was that not doing anything or going anywhere lent itself well to our debt-free journey. Before I share what we accomplished in the last year, I thought I'd recap the goals I shared eons ago in January 2020:

Recap of my 2020 financial goals

In January, we celebrated paying a total of $37,250 toward debt in 2019 (a 22% increase from the year before). This total included wiping out medical debt, as well as our credit card debt. We were elated with the progress we made and ready to maintain our financial discipline and set our sights on new hurdles:

GOAL #1: Payoff my auto loan- COMPLETE! | In February, we knocked out the auto loan on my 2012 Kia Forte. We then got to enjoy the remainder of the year with just one car payment which felt pretty amazing.

GOAL #2: Purchase a new car- INCOMPLETE! | Technically, this is an "incomplete," but for a very good reason- I didn't purchase a new vehicle, because I didn't need to! Starting the new year, we assumed we'd have to replace my little Kia that's been with me since before we were married. What we weren't anticipating was the fact that my weekly mileage would go from 400+ miles per week to probably less than 20 miles per week when I began working remotely from home due to the pandemic. The only thing I used my car for in the last 9 months was school drop-off and pick-up. And did I mention how much I loved not having a car payment?

GOAL #3: Payoff a student loan- COMPLETED! | I am so excited to share that not only did I payoff a student loan...I paid off THREE! That being said, in the interest of full disclosure, the CARES Act stimulus check and forbearance of Federal loans allowed me to put a lot more money toward my high-interest private loans than I would have been able to in a "typical" year.

GOAL #4: Payoff personal debt- COMPLETED! | We had a couple small miscellaneous debts that we carried over from 2019 and were able to knock out by February. However, we did add debt to this category when I financed my Peloton in August. It's 0% APR so I think of it less as a debt than a payment plan, but still keep track of my payments along with my other debts.

GOAL #5: Cash flow our family trip- COMPLETED! | One of my best friends was supposed to get married in May and we were going to tack on a family trip to Washington DC. Obviously, that was cancelled and she postponed her wedding until September. Since the school year had started by that point, our family trip became a solo weekend. My trip expenses were significantly less traveling by myself, but I'm still proud to have saved up and had plenty on hand to pay for unexpected expenses that popped up.

So, how'd we do in 2020?

Last year, we paid a total of $43,308.17 (a 16% increase from 2019) toward debt! Here's how it broke down:

It's hard for me to believe that we were able to put so much toward my student loan debt this year. The last few years, our focus has been on our "Debt Snowball" and getting rid of all of our smaller debts so that we'd have more income freed up to apply toward our biggest debt- student loans! We began 2020 with SIX FIGURES worth of student loan debt- it was literally more than our mortgage because of the egregiously high interest rates. This was the year we made actual progress in reducing the principal amount rather than just paying interest in the form of minimum payments. 

2020 was the year that we shifted tactics from debt snowballing to debt "avalanching." One of the three student loans that we paid in full had an 11.25% interest rate (which had actually decreased from over 13% in 2019). It felt so good to kick that one to the curb!

In looking forward to the year ahead, 2020 has taught me to keep my expectations low. I know that we're nowhere near the end of this pandemic and anything can happen. However, I also know that in the midst of life's uncertainties focusing my energy on goal-setting genuinely brings me joy when the world feels entirely out of my control. 

I have reason to believe that we won't exceed our 2020 debt payoff total in 2021 for a few reasons: 1) Presumably, I will be returning to the office (and my 45+ minute commute) at some point and will actually need a new vehicle, 2) Due to the way health insurance is structured through my employer my income has exceeded a certain tier and my healthcare costs will triple next year (not excited), 3) I don't expect any more COVID-related supplemental income, but it will be interesting to see if President-elect Biden and/or Congress make any movement toward student loan relief.

So, with those variables in mind and with the mentality that all of these could wind up being irrelevant and/or replaced with other priorities, here are my financial goals for 2021:

5 Financial Goals for 2021

GOAL #1: Payoff my next highest-interest (10.25%) student loan. 

GOAL #2: Finally purchase my minivan. 

GOAL #3: Save and cash flow our family trip to Walt Disney World!

GOAL #4: Increase my monthly tithe by 25%.

GOAL #5: Increase our Emergency Fund savings to $10,000.

Ideally, I would love to pay off all my remaining private student loans, but between the car purchase and the family trip we have some bigger expenses to save for so I think our priorities are going to shift in that regard. And yes, one could argue that student loan repayment should come before Disney World- but my children are only going to be this age once and honestly, I want us to enjoy a little reward for the hard work we've put in to dramatically reduce our debt. We are not entitled to a family vacation, but for the first time in our 8-year marriage we are in a position to do so. The trade-off feels more than worth it. 

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What are your financial goals for the next year?!