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Trying to get a handle on things

November 9th, 2014 at 05:58 pm

Our Total Money Makeover is in need of a makeover itself. It's been a pretty crazy year for us financially speaking. We started off 2014 with a lot of monthly surplus after having finally paid off all our credit cards in 2013. A surplus we may have gotten a bit too used too because it didn't last for long.

I started back to college (approx $2000/semester), we bought a "new" car (approx $175/month), we got slammed with unexpected medical bills after our identical twin boys' autism diagnosis (approx $8000/yr), and most importantly, we finally started a 401K for retirement (approx $500/month+match). All said and done, we're spread pretty thin these days, but we're still spending discretionary money as if that were not the case.

In fact, although we haven't yet had to carry an interest bearing balance from one month to the next on the card we use for most discretionary purchases (due to the 3% cash back we get), we've certainly come close. And at this point I'd say we're actually carrying about $1500 in credit that just hasn't come due before we could pay it yet. In short, we've jumped back on to that dangerous spiral of spending slightly more than we make each month.

Additionally, Xmas is around the corner, next semester's tuition is due in a month, and we're pretty sure that this is the winter we're finally going to have to buck up and buy a new furnace. It's feeling a little overwhelming at the moment.

It's time to reign it in and accept the financial reality of our current situation. After talking about it, hubby and I have decided that despite having less surplus than before, we should still be aiming to save at least enough per month to replenish our $5000/yr emergency fund (ie about $415/month). Unfortunately, we haven't been doing that these past few months, and after I pay this next tuition bill (my aunt is no longer helping me), the EF will be pretty much empty. We'll restock it when hubby gets his bonus in Feb, but that will be a big chunk of the bonus, and we certainly won't be paying off the car too like we had once planned.

We're going to make paying off that current $1500 credit debt a priority, and we're going to cut our Xmas budget in half too. I'm going to start printing out weekly reports of where we're at in our spending categories so that we can see if we're on track or not. And since we haven't been sticking very well to those limits the past few months, that's going to feel like a big cut at first. We've done it before though, we can do it again.

Hopefully hubby will get a nice raise this March, like he's been promised, and things will get a little less tight, but we can't wait for (or count on) that to fix it. Thankfully, in only two more years I should be done with school and we can finally kick our TMM into high gear again. In the meantime, home prices rising is at least helping our net worth to look less depressing. Still negative, but not nearly so much as in the past. Will be so exciting to get to an even $0 some day!

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