Wow. It has been quite a while since I have even thought about money. So how have I been doing? Well let’s see. There were several things I was working on.
My crisis plan
My emergency fund
Staying out of debt
Paying off existing debt
Well, let’s begin with my crisis plan. Not too bad, but not as great as it could be right now. I used about $100 extra for Christmas from my emergency fund and also $100 for things that had to do with the baby and some issues that have come up from my pregnancy. (I feel SOME of that money was well spent) So right now, I am about $100 below the $500 mark I promised I would stay at. I will be replenishing all of that this month. I am happy that I am able to do that this month, but still upset because if I had not overspent that would have been EXTRA money.
So I guess that killed two birds with one stone, but really that is not my entire emergency fund. I have two other accounts that I absolutely never touch and the combination of all three equals about one month’s salary right now. That is good, but seeing as I will be out of work for almost two months with the added expenses of the hospital bills means that I need at least three months saved up.
Staying out of debt. Well…. I have not added ONE PENNY to my debt since I cut up those credit cards!!! I did use a card in December to buy some groceries, but I immediately paid it back as soon as I got paid and did not owe any finance charges. How did I get a credit card you ask? Well, the old one expired and they had sent me a new one. It was kind of an emergency due to a little mix up on the finances so I used the card knowing it would be paid back only days later.
Paying off existing debt. Well, I am still paying, and paying and paying, but there is not much to say on this front. For the last two months to have a little extra cash for Christmas I paid only the minimums on my cards. However I just paid them for the month of January and I bumped them back up to the original amount I was paying before.
I wanted to write about my progress because I remember a time last year when I thought that it was impossible for my husband and I to not use credit cards. I thought that we really needed the extra help. However, I have been going without for several months and so far so good. I can’t stress how scared I was to cut up my cards and quit using them but when I did it was like a weight was lifted off my shoulders. The choice to make more debt was taken away from me. It was no longer an option. Before I found out I was pregnant I had a plan that was going to have my card paid off and pretty much all of my other debt in just 5 years. It is now going to take me 2 years just to pay what I owe on my credit card. However, since I am no longer adding to it I can see the end in sight!! My husband has also started chipping in. He has agreed to sell his motorcycle… if we can find a buyer and next January we will purchase his truck when the lease is up making our payments on that considerably less.
This year will be an interesting one. It is going to be tough to scrape together enough cash to have two kids in daycare. At first the baby will probably have to go to a center that takes babies and that will cost more. When she is old enough to go to daycare with our other daughter we will get a discount for having two kids in the same center. I plan on changing my deductions with my payroll department when this baby is born. We currently get a pretty fat refund each year, but I need that money throughout the year now. I have another 8 months before I will get another raise so until then it will be very tight. Luckily we have made some room for ourselves. For example the money that I pay extra on my credit cards “could” be cut back if absolutely necessary. I am also saving $50 a month in the Suze Orman Save Yourself Plan with TD ameritrade. In March it will mark one year I have been saving and I will get the $100 bonus. After that the money can go towards bills instead of savings if need be. We also have two other loans that will be paid off this year. We currently have direct deposit paying them so the direct deposit will continue going into the bank and that money will be there when we need it.
Whew, so that is how it has been going with me. How are all of you?
Showing posts with label crisis plan. Show all posts
Showing posts with label crisis plan. Show all posts
Friday, January 4, 2008
Sunday, August 26, 2007
What is a Crisis Plan?
A “crisis plan” is a misleading name. It is not something you would use if your car broke down. That is what your emergency fund is for. I guess it should be called a “crisis aversion plan”. If you know that an event is likely to happen in the near future you would want to put one of these plans into action.
What kind of “events”? Really anything you are not already prepared for. This might include a possible lay off at work, the imminent death of a loved one, or hmmm I don’t know, a surprise pregnancy.
Who needs one? If you already have 3-8 months of your salary saved up then you are in pretty good shape. However, many people are just beginning to repay debt and may have as little as $500-$1000. This is great for an emergency fund but when big things are about to happen it isn’t going to cut it.
How do you implement a plan? This depends on what you are going through. If there is a close estimate of how much money you will need then it is pretty simple. Take the amount of money you need and divide it by the approximate number of months you have to save it. This will give you a rough estimate of how much money you are going to need to save each month. If you can’t possibly save that much it is time to start selling things you don’t use, getting a second job, or cutting back on extra services you may subscribe to. If you have no clue how much money you will need start saving as much as possible. Sounds a little simplistic but you will need it in the long run.
What should be stopped? No more chunks of cash to those credit cards!! It may seem like the best idea is to pay off the cards as quickly as you can instead of saving. This is a bad idea because when the layoff/death/birth happens you will not have any money and will need to use credit to pay for it all. Another no no- any unnecessary spending. Any money that you can put toward savings should go to savings- nothing else. If you are about to have a serious financial situation on your hands… sorry, but you don’t need a manicure. One way I am helping myself do this is by thinking of every dollar spent on something else as something that could have gone to the baby. For example, I got a survey in my email today, I was really tired and didn’t want to do it, but it was paying $2 and I thought, “hey that could buy a couple bottles or a pacifier” and I took the survey. It can be tough but it helps.
What if it turns out that you don’t need the money? Simple! Use it to pay down your debt!!
I hope none of you ever needs one of these plans. I sure never thought I would, but if you do here ya go! If you have any other tips or hints to add please share with us!!
**Curious about why I have a crisis plan? Read the Big News here.
What kind of “events”? Really anything you are not already prepared for. This might include a possible lay off at work, the imminent death of a loved one, or hmmm I don’t know, a surprise pregnancy.
Who needs one? If you already have 3-8 months of your salary saved up then you are in pretty good shape. However, many people are just beginning to repay debt and may have as little as $500-$1000. This is great for an emergency fund but when big things are about to happen it isn’t going to cut it.
How do you implement a plan? This depends on what you are going through. If there is a close estimate of how much money you will need then it is pretty simple. Take the amount of money you need and divide it by the approximate number of months you have to save it. This will give you a rough estimate of how much money you are going to need to save each month. If you can’t possibly save that much it is time to start selling things you don’t use, getting a second job, or cutting back on extra services you may subscribe to. If you have no clue how much money you will need start saving as much as possible. Sounds a little simplistic but you will need it in the long run.
What should be stopped? No more chunks of cash to those credit cards!! It may seem like the best idea is to pay off the cards as quickly as you can instead of saving. This is a bad idea because when the layoff/death/birth happens you will not have any money and will need to use credit to pay for it all. Another no no- any unnecessary spending. Any money that you can put toward savings should go to savings- nothing else. If you are about to have a serious financial situation on your hands… sorry, but you don’t need a manicure. One way I am helping myself do this is by thinking of every dollar spent on something else as something that could have gone to the baby. For example, I got a survey in my email today, I was really tired and didn’t want to do it, but it was paying $2 and I thought, “hey that could buy a couple bottles or a pacifier” and I took the survey. It can be tough but it helps.
What if it turns out that you don’t need the money? Simple! Use it to pay down your debt!!
I hope none of you ever needs one of these plans. I sure never thought I would, but if you do here ya go! If you have any other tips or hints to add please share with us!!
**Curious about why I have a crisis plan? Read the Big News here.
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