Thursday, July 14, 2011

Financial Expectations

Wow!  Hello visitors from Notes From the Frugal Trenches... I don't know what I said, but I hope a couple of you will stick around.  Since it was my comment on financial expectations that gathered such a large migration I thought I'd take a  minute and expand a little.  Pardon if I don't give exact facts and figures... I'm just not that kind of gal ;)

You can catch up on our current living situation Here.  and Here. To expand more on our plans since that post we are working under the idea that (unless we find another offer too good to pass up) we are going to buy the house we're sharing with my folks when they retire.  Hopefully in the next year or so.  Housing prices in our area are kind of ridiculous - what my parents paid for a duplex in the mid-90's will get you a really shabby condo/apartment today - so the deals are few and far between.

So here are my Financial Expectations

1) Housing - Having a good roof over our heads is incredibly important.  It's why were living the way we are instead of just paying too much money for an apartment or shabby condo.  With the idea that we are taking over this property in a couple of years we are helping with repairs and updates.  We also exchange general chores and maintenance for rent.  Since we moved in we've been able to save about half of what I'd like to have for a down-payment and that with not working for almost 3 months because of pregnancy and about 4 months of myself making minimum wage.  Sometimes it's hard and feels like we're so behind everyone else our age when the "I should have"'s strike, but you can read here about my realizations that the modern idea of having the house, the car, the everything before you're 30 is really quite a new idea and not necessarily good for our generation.

2) Bill Paying - Here you can read about how we're almost out of consumer related debt, except for those pesky student loans.  Since I've been back to work we've put the equivalent of a good mortgage payment to finishing paying off this lump and when it's done it's done.  We've decided any future cars will be paid for in cash, along with furniture, vacations, etc.  While we do keep a credit card open it is truly just for emergencies and the limit is low enough to pay off in about a year or less of penny-pinching.  The rest of our bills always come out direct deposit so they're always on time and I keep a calendar of the due dates and amounts to check against my checking account balance.  We  are big proponents of "if we don't have it we don't spend it" and it's amazing how much that frame of mind keeps you out of trouble.

3) Investing - While food and the essentials are on the list, this is what I'd rather share.  I'm all about investing in our future.  This comes in many ways.  One way is new to us do to better jobs this last years in investing in terms of insurance and retirement.  Both my husband and I have retirement accounts now - I can't remember his specifics, but my employer puts in 10% for my 5%, this means 15% of my income each year gets put in a retirement account.  We're also insured, not just health insurance though I'd be lying if I said the reason I got into the place I work wasn't due in part to their health insurance plan (for the first time, I don't have to pay for my family's health insurance) to throw out a number that means we get about $400 a month back into my husbands paycheck.  Between that number and the number we'll no longer be putting towards debt is our housing payments - mortgage and utilities.  The other way our jobs help us to invest is by offering us insurance in case of emergencies.  We are now covered so that if anything were to happen to me, my husband or both of us the remaining members of our family (the one spouse and child or just child) could live comfortably without the income we give.  It's comforting to know that if something tragic were to happen to my husband and I that Henry would have access to money that we'd spend on him anyways and not be a financial burden to his guardians.

We also invest in what comes into our homes.  This is the part that always seems to go against frugal living, but we're not afraid of spending money if the money is well spent.  While we're always on the look out for a good deal, we invest in the things that fill our homes with the hopes that each couch, dresser, plates and cup that we buy will live a long and useful life.  In the last couple years we've made it a point to only buy furniture with longevity in mind - a $150  quality (often vintage or antique) bookcase or dresser will often cost less in the long run than multiple $30 cheap versions of the same thing.  While we are big proponents of consignment store clothing, we still look for quality and often wait for end of the season sales to stock up on things for the next year so that we won't have to run out and buy a $25 swimsuit for the kid because we got one for 40 cents, bare or never worn, at the consignment shop the previous year.  Purchases that cannot be thrifted are bought with forethought and reason and usually after months of searching for just the right thing - take for example my $40 leather satchel purse; I looked for this for about a year until I found exactly what I was looking for at the price I wanted.  It's a quality piece that I intend to use until it falls apart and is reincarnated into a new cow and then I'll probably wait, track it down and use it again ;D.  Even things that fall into the "want" class are bought on considered basis - movies, books, music are all considered for their longevity, purchasing only the ones that we feel we'll enjoy for years to come.

In a nutshell our financial expectations are fairly basic - a roof over our heads, basic needs always taken care of, etc.  We take care of these things first, don't beat ourselves up if an expense comes up and takes a chunk out of the account or we don't stick to our budget 100% all the time.  We take care of the needs first, but don't deny ourselves the occasional want.  And while sometimes it's hard to shut off the voice that tells you "you have failed because you don't have a fancy job, a huge house and your kids does have a million toys and never will" we are 100% that we are setting the stones for a really good life down the road.  In fact it makes us more secure in our marriage knowing that we are working toward similar goals and have a trusting relationship with our money and how we spend it since financial troubles are one of the largest reasons for marriage failure.  Just like FT and her friend we have things that are more important to us (security, a desire to grow our family, etc.) than having a fashionable wardrobe and all the latest gadgets and so far it works for us!

1 comment:

  1. All that debt didn't really buy us that great a life when we look back on it. At the time it may have seemed like a great idea, but then you have to pay for it. It certainly didn't buy us freedom or a better life in the long run! We still slip up occasionally, but all in all we are much more content now we have paid down the debts and started budgeting for everything.

    Keep on carrying on : )

    ReplyDelete

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