Making Changes

Through my own experiences over the past 1.5 months and the financial experiences I have read on other financial blog, I have learned some valuable financial lessons.  I was so set on getting debt paid off tomorrow I ignored common sense.  I planned for no real emergency fund and I was completely unrealistic with how much it costs to raise a family of our size.  Here are some reality checks and changes we need to make.

1.  Emergency Fund:  We need to have an emergency fund set aside for unexpected costs/bills.  My dream goal is $5,000 but my initial goal will be $2,000.00.  I don’t want to put debt pay off completely on hold, so I will pay minimums on all debt but add $100.00 additional to Capital One.  The rest goes to savings until we have $2,000.00. Once that is completed I am thinking we will split extra funds 50/50 towards debt and savings until we hit the $5,000 mark.
2. Gazelle Intense: I am never going to be Gazelle intense.  While I want our focus to be getting out of debt I am not going to do that at the price of what is important to us. First being our kids, our financial senselessness has meant they get so few of the opportunities they deserve and that is going to stop. Second is going to be our love of giving.  We don’t attend church so we do not tithe, but in previous years DW and I have been generous to friends and charities.  We miss being able to do that and I really want for that to continue, within financial reason of course.   
3. Savings: The ‘Savings’ portion of our budget was set up to make sure money was set aside funds for holidays, anniversaries, and birthdays. I put an estimate of what I want to spend on each and then made sure our monthly allotment would cover these.  I want to add extracurricular activities for all the kids as well as summer camp for DS1.
4. Tax Return – I expect our tax return to be around $5,000 - $7,000.  My original goal was to throw that all at debt.  After some thinking I decided to distribute the funds differently.  My first priority is to make sure our $2,000 emergency fund is done. We have some home/car TODO items that need to be taken care of which I am expecting to be around $1,000- $1,500 dollars.  I will probably be putting a few hundred dollars into our ‘savings’ as I have added several other expenses to it and seeing as I contributed nothing to savings in January and February it will need a little help to make 2015’s goals. Whatever is left over will go to our car loan.  While our first debt pay off goal is the Capital One card, I have been getting anxious that our big car isn’t going to last much longer and want to get it paid off ASAP.
5. Budget Reality Check – Just because I only want $100.00 in ‘other’ expenses each month, doesn’t mean Murphy will listen.  When I see how much is left over after each month I get depressed so I get creative and start lowering our budget in areas they really shouldn’t be lowered.  Then I get myself in a financial pickle and it is my own dang fault.  I am going to update the budget to make it match our reality.

So what does that mean for March? Originally I had anticipated making a very large payment on the Capital One card but that is going to have to wait. I am going to pay all of our minimums, pay our ‘Savings’ account, pay an additional $100.00 to our Capital One card and whatever is left over is going into the Emergency Fund.  Wish me luck!