Tuesday, December 20, 2011

Moolah Monday - Getting our Financial House in Order

Inspired by less funds/more expenses after the adoption of Little Miss and relatives who recently paid off all their debt, my husband and I have decided to get our financial house back in order.  Please note the eye rolling and simultaneous happy dance.

I am so doing this because I have to.  I know I have to for many reasons.  First, if we keep spending like we are used to we are eventually going to start bouncing checks.  We haven't faced that scenario in quite some time but it's not something we're eager to get back to.  The eye rolling part of me is acting kind of like a teenager who knows they've lost the battle with their parents (or heaven forbid that their parent is actually right) - yep that's right I'm going along but quite reluctantly, with my nose turned up in the air, and certainly with a few heavy sighs.  Quite mature of mie.  I don't want to budget.  I don't want to have to account for our resources.  I don't want to have to track pennies.  I don't want to have to deny myself anything.  WAAAAAAAHHHHHHHHHHH!

On the other hand though, I'm the one who asked my hubby if he'd help mie start and then if he'd lead this process.  Though he's now doing a wonderful job of managing it, it was I who initiated the conversation.  The mature, responsible part of mie overruled the teenager within and convinced her that getting things taken care of now would be much more fun than dealing with consequences after the fact.

And of course the grown-up in mie was right.  It is so much better to have a plan for our money than wondering how the month will play out financially.  The teenager in mie has had a good time feeling grown-up and responsible too, so it's a win-win.

Surely the process couldn't be easy and straight-forward though.  Anyone who follows Dave Ramsey is aware of the way he alludes to the role of Murphy's law in the budgeting process and his insistence on the "Emergency Fund" prior to paying off debt for just those situations.  He does this because they happen.  I'm told they always happen.  We're not an exception.

Here's what we needed to include in the budget for the remainder of December:
Income (at the time it was 3 paychecks)
Groceries - $240
Daycare - $1000
Gas Money (2 fill-ups for each car)
Car Insurance Payment
Christmas Presents - $880

I think that was it - balancing out the income with the expenses we ended up with the amounts included above plus enough money to put aside to pay both mortgages in January, put an extra $1000 into savings, and have $220 leftover as spending money - we split it $100 each and put the extra $20 toward presents.

If you look at it another way, we had the mortgages plus $1220 leftover in our budget after paying "necessities".

It didn't stay that way.

We got a call from a collection agency.  Apparently for some still unknown reason my student loans went into repayment in October.  I never paid attention to the statements because it shouldn't have been in repayment yet and so apparently I was 60 days past due with a $1240 outstanding bill.

: (

Thankfully I had the money in the budget to pay for that, but it ate up our extra spending dollars and what was to go into savings.  I was able to pay it though, so we're grateful for that and now the account is current  yet again.  (How embarrassing, and they're still looking into why it went into repayment early).

That day as I drove home I noticed the tire light on the car - it means there was a low tire.  After a hideously bad commute (it took mie 2+ hours to drive home when it usually takes about 45 minutes), hubby checked out the tire and found a large gash and a screw WITH a washer in it.  The tire was not fixable.

We learned a while back that if our tires are not fixable they have to be special ordered at the cost of about $350 each.  We also learned of a place we could get them for about $260 but they still had to be shipped.

So I drove around on the spare tire sparingly (*snort*) for 2 days before the tire came in earlier than expected.  That ate into our January mortgage savings - which really isn't that big of a deal since the mortgage will be paid from January funds anyway, but it's still nice to be that much ahead.  Now we're just a little less ahead.

I had the opportunity to go Christmas shopping for presents with my hubby on Friday.  Here's where it gets cool.  We had budgeted $880 but were going to try to keep it less than that and catch up a little where we lost on the tire.  As I redid the math I realized just off the bat I had just done poor math and we only needed $780 - an immediate $100 to help pay for the tire.  Then when we did our shopping we came in about $250 under what we'd planned.  I still have about $150 left to spend on gifts, so there's another $100 savings for the tire - we managed to spend $200 less than we'd budgeted that could go toward the cost of the tire.

Then I started thinking about a particular check one night - I wondered if that check was ever cashed or if I still had it in my purse.  The next day guess what floated up to the top of my purse - a $65 check I'd had in there since Black Friday that I'd forgotten about.  That left us with $265 toward the tire - enough to purchase it AND pay the fee to get it installed at WalMart without having to dip into our mortgage savings for January.

How cool is that?

I'm sure as we continue this process we'll have other adjustments we'll have to make, but it feels so good to know we're getting back on-track and more importantly that we're doing it together.

It's the right thing to do anyway - being good stewards of the resources we've been given.


Mama P said...

Oh how I need to get on track. I was cracking up the other day because I actually went to Dave's website to look into getting a guidebook or something, and I can't afford their program! HA!

We have really strapped ourselves with this adoption, and I've been struggling to decide whether or not it is our punishment for not having a savings beforehand, or if we should be fundraising (which feels VERY uncomfortable to me), or if we just aren't supposed to be doing this since it is such a financial burden.

I'm glad you guys are able to get back on the road to financial freedom!

Dana Beam said...

Glad to hear that youre back on the financial planning wagon. It's hard but it really is such a relief at the same time. I cant wait until I have this kiddo because our budget goes out the window since Im so sick in pregnancy I just try to survive. Sure will be better to keep more in budget starting in February.