Thursday, January 8, 2009

Don't Count Your Chickens!!

A little over a week ago I was deciding exactly how I was going to spend my tax refund. I hoped to pay off my smallest debt, put an extra $1000 in our emergency fund, and if there was any left at that point, I was going to pay it toward my next debt.

Approximately two days later I was in the hospital which lasted almost an entire week. Oops. While I do have insurance, I still will have to pay quite a bit for this I am sure. So, now my plan is to save all of that money so that when the final bills come in I will be able to pay the balance. This was not the plan for that money at all!!

The point here is that, while it is great to plan ahead, you have to remain flexible. This also is a great example of why an emergency fund is essential. Say, it was not close to the beginning of the year, perhaps in the middle of the summer, or as my luck would have it, they day after I spent the rest of my tax return! If this had happened at any other time of the year, I would need to use my emergency fund to pay for it. Even though I am bummed that the money I wanted to use to pay debt is going to have to pay more bills, I feel lucky that I will not have to deplete my emergency fund.

So, I guess you can count your chickens, but don't be upset if a few never hatch!

Wednesday, January 7, 2009


Since my last post over two months ago our economy has gotten even worse than it was. Because of my work on our finances, my family was able to make it through crazy gas prices with no problem and we are actually doing just fine now too. However, I feel like I haven't been doing as well as I could be. I think I can do even more.

I just ran my debt snowball calculator to find out where I am at. My next debt is due to be paid off in March, but the next not until April of 2010!! That is TOO long. I don't want it to take that long. In fact, I am setting a goal to have that debt paid off by the end of this year. To do that, I will have to work very hard and save everywhere that I can. Maybe even have a yard sale or two.

I think the point I am really getting at here though is that I am recommitting myself to fixing my finances. I haven't really stopped, but as the gas prices have gone down, we have not saved that money (I still budget it as gas money each month so I will have it when prices rise again.) I have used that money on eating out, buying things I don't need etc. I am still doing my debt snowball, but I am snowballing the bare minimum. Using only money from my other two paid off debts. Had I been using that extra gas money I would have probably paid over $500 extra toward my debt since prices went back down.

I also overspent on Christmas. We didn't go into any debt for the second year in a row. But, we did spend more than I would have liked. And, next year we will have another child to buy for (we didn't buy her much at all this year since she is so young).

Anyway, I hope that some of you might recommit with me. Are you slacking off a bit? How can you fix it? Or, are you still doing really well? How do you stay motivated? I would love to hear all about it.