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Financial Expectations

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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!

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Uncouth

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Forgive me, I know it is uncouth to speak of money and finances, in front of friends.  However I’d like to take this moment to bask in our bank account.

Please, before I continue let me point out, we are in no way wealthy or really even well off.  What I’m about to confide in you have come from just under two years of determination and sacrifice.

October 2009 after being inspired by “Your Money or Your Life”, and by my husband getting a promotion, I decided we were going to get out of debt… completely out of debt and the sooner the better.  We had two types of debt, school loans and consumer.  The school loans I knew we’d have until we didn’t have anymore, but I could do something about the consumer loans.  The CL were a combination moving expenses, wedding expenses, and a car – the majority was the car, about 75% – luckily I can say that very little to none of our CL was just a racked up credit card of “just because I NEED it” purchases.

So here’s my moment… currently in our bank account we have more money saved than the total of the CL two years ago and we have about three months left until we have no CL at all.

That’s right in two years – with job changes, moving cross-country, purchasing a second car and baby – we will have managed to not only pay off our CL, but save an equal amount of money.

Currently I’m basking in the glow of my bank account and damn proud.

Let me reiterate – this was not accomplished without sacrifice and the majority of the money we saved was due to our current living arrangements with my parents – but it can be done and once you’ve cleared those debts and realized how much extra work went into it it’ll be that much hard to “just spend” in the future.

Now I feel like we’re that much more on our feet and prepared for the future – student loans will continue to be paid off, daycare costs will go down with age and our paychecks will get larger.  We might not have everything we want, but we have what we need.

Now to continue to plan for the future – the biggest hurdle is home buying.  We live in an area that is not cheap – what my parents paid for their first new duplex in this area almost 20 years ago will get you a rather cruddy condo and being that Iowa is a mainly rural state the cheap country housing is often negated by fuel costs.  Even if we get to follow thru with my desire to purchase my parents home when they retire there’s still a large chunk to be saved.

So there’s still a long ways to go and sometimes I wish I could throw in my fiscal responsibility towel along with my caution into the wind and go out and purchase the first house I love even if I can’t afford a good down payment or if they mortgage will make me house poor for twenty years.  But for now I feel proud and accomplished and who knows what tomorrow will bring.

Quick Takes – Plans for the Summer

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1.  Get the garden planted!  I was surprised when I broached the topic with my folks how excited they were to have a garden again.  We had them when I was a kid and I’ve been dying to grow things for years now.  Hopefully some of Henry’s first food will be the result of my own hard work in the dirt.

2. Speaking of Henry and food I’m fully intending on making his baby food, and my husband is totally on this band wagon.  So another summer goal is to find a lot of baby food recipes/food combinations in preparation for his first foods.  Any suggestions?

3. Finish clean out the basement – I’ve started going through our boxes from the move and my boxes in storage from childhood through college.  Downsizing and getting rid of things whose memories I no longer recall.

4.  Finish paying off the car and start on the first home-owning steps.

5. Join a church and figure out when we’re getting Megamind baptised – we go back for our second Sunday this week and will decide if we want to join, if so I think Henry will be baptised on All Saint’s Sunday this fall.

6.  Organize all of the things I want to get done for Christmas.  Yep, start planning my Christmas in July.  This because I want to start a tradition for Henry and his  (by Christmas) 4 cousins that takes a cue from my role-model Molly Weasley.  Yep, Weasley Sweaters, or at least “Weasely” Knits.  Since all of the kids are under the age of 3 knitting projects will go quickly even though time is at a premium now.  So I’m hoping with a little planning it will get down.

7.  Get out and enjoy the summer – I’m hoping to spend a lot of time introducing Henry to nature at the near by parks and music at our summer Jazz Festival and other outdoor events.

And I leave you an out-take of our Family Easter picture… can you guess who’s jealous of the baby.

Visit Jen at conversiondiary.com for more Quick Takes!
P.S. I’m so excited for my first mothers day!

Why We Make Do

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Though this is a topic that is the premise of the blog  I will provide a little exposition (keeping in mind the words of Urinetown: The Musical’s Little Sally “Nothing ruins a show like too much exposition!”) on the why’s and how’s of my life.

To paraphrase the Big Bang Theory’s Sheldon Cooper I’ll answer the why part quickly.

Money thou art a heartless b*tch.

In the years following college I have seen to many friends dig into deep pits of debt where their money woes will claw away at them for years to come and frankly Scarlet, I don’t want that life.  Not for me, not for my husband and especially not for my son.

I realized quickly that the line between needs and wants in this country is fine and interchangeable to most people and I want to draw that line thicker.

It’s not always easy to adhere to this principle.  The culture I’m surrounded by expects a lot.  Fancy education, fancy jobs, fancy house, etc. all by the age of “fill in the blank” and it’s this idea that gets a lot of people in a lot of trouble.  It is hard to explain some of our choices and yes, sometimes the jealousy bugs bites hard.  However, I try to look at the future I’m working to create and I remember that it’s worth it.

One day I will have more of the things I want – a house, nice things, vacations, maybe more.  But I’m not going to sacrifice caring for my families needs – our nourishment, our health, our general well-being in order to attain these things.

If it’s not to cheesy of a saying I’ll say that “I make-do today for a better tomorrow”.

And as for the “How” part of this equation… there’s plenty to share.