Financial Struggles and Wins in 2020

We had several financial struggles and wins in 2020, which was a rough year in several respects. The pandemic hit in January, and many of us were economically impacted by all of the subsequent lockdowns and restrictions. For those of you who have been following, my husband and I started on our journey to becoming debt-free in 2018.

While we initially made a lot of progress paying some of our debt down, we eventually transitioned to building up our Emergency fund. We also reduced the amount of student loans that we were taking out, and paid for most of Mark’s Master’s degree with cash. In 2020, however, we decided to pause our debt-free journey to focus on keeping our head above water. Read below to see our financial struggles and wins, and how these moves paid off for us in 2020.

Smart Moves and Wins in 2019 that Prepared Us for 2020

• Petitioned for state residency and received In-State tuition for medical school
• Not taking out a PLUS loan (saves one whole percentage point on interest)
• Job change for Mark with increased salary and benefits
• Reduced Spending in the following categories: groceries, shopping
• Taking advantage of Southwest Airlines Companion pass to save money on travel
• Continuing to bring lunch to work everyday
• Continuing to pay for Mark’s Masters with cash
• Rebuilding our Emergency Fund to $10,000

Struggles in 2020

• Mark in between jobs for most of the year
• We took out more loans to help with living expenses
• We stopped paying on our student loans
• Our property tax bill was higher than expected
• Side businesses not gaining traction as fast as hoped
• COVID-19

Smart Moves and Wins in 2020

• We were able to live on less and have $10,000 in Emergency Savings
• I took a leave of absence (no student loans) in preparation for our baby
• We bought used and new on sale baby gear
• I launched my online boutique to make some extra income
• Started saving for baby’s college fund in small amounts
• Bought family car used at a good price with cash
• We were able to eventually live on our Emergency Savings and had enough to keep us going until our next check and still have some leftover

Looking Ahead to 2021

Looking forward to this year, in 2021, we are hoping that things turn around financially for all of us. As for our family, we will rebuild our emergency fund and then resume paying my husband’s student loans. We have seen first hand how valuable it was to have a solid emergency fund. I know Dave Ramsey says to save $1000 and then pay debt, but that wouldn’t have been enough to cover even half our expenses for one month. I would rather have the debt a little while longer and also be able to keep a roof over my head until income becomes more reliable. That’s scary stuff.

We are also going to continue to reduce our cost of living by eating more home cooked meals, buying second-hand when appropriate and taking a closer look at unnecessary spending. My big goal financially this year is to generate appreciable revenue from my side businesses, namely my blog and my online boutique. I want the momentum to start to build, so that the income generated can help us pay down our debt faster and help us achieve financial independence sooner.

Last year was extremely challenging, but I have hope that things will turn around in 2021. We were extremely blessed to be able to save as much as we did before the pandemic hit, and this year we are going to make a come-back and chase after some lofty goals. Whether it’s for finances, career or personal wellness, having goals and a concrete plan for achieving those goals is essential for success. Check out my worksheet and method for setting effective goals, and cheers to a new year of strength and renewed energy!