So recently we decided to hunker down and get smart with our money. We're not bad with money it's just that you can always do better right? Like organizing.Ugg. We know we should be saving for a rainy day but you add to that retirement, kids college, paying the house off, and it gets pretty overwhelming. I've struggled with how to prioritize all this so I was so happy to find someone that knows the answers, Dave Ramsey! On his website he has many many good resources but I particularly have latched on to his 7 Baby Steps.
First: establish a $1000 emergency fund--it's not a matter of IF but WHEN you'll use this
Then: Pay off debt--smallest one first so you get that sense of motivating victory
Next: Build a savings amount equal to 3-6 months of expenses. This your insurance policy for yourself.
4th: Save 15 % of income to a roth IRA for retirement
5th: Kids College savings in an education savings account.
6th: Pay off your house
7th: Give, Share now that you're wealthy.
You can check his website for more info. Daveramsey.com
In order to accomplish those steps he inspires you to look at the world with new eyes--ones with dollar signs reflecting in them. Where can you save? What can you cut out so you can be reaching those goals quicker? What is lurking in your closet or garage that could be sold for $$.
Brandon and I sat down with our budget. We don't really have any "extras" that we're paying for--no pedicures or fancy dinners, regretfully. A lot of our money goes towards kids lessons.
Brynn's gymnastics $120 month
Competitions: $60-80/month (yes, BD wishes she would just break a leg already)
Brynn's violin: $60/month
Adria's violin: $60/month
Awhile back, Adrie quit gymnastics, which paid for Brynn's competitions. Then I called her coach and we cut Brynn down to 2 days/week. Recently we decided that Brynn would only compete every other month. In addition I cut her and Adrie's violin lessons in half so now they only go every other week. No harm done and $60 saved. And as nice as it would be to send them to a professional, we do save a lot of money by me teaching the girls piano, even if it means premature wrinkles.
Next I looked around the house: What could be making us money? The troublesome puppy, of course! I put an add in the classifieds and got a buyer $150. Believe me, no one's crying any tears.
The closets and storage rooms had a lot of good stuff to sell. Normally I'd give it to goodwill but this year it's gonna be a yard sale--first of June--toys, clothes, books, furniture, baby stuff, and yes, dog stuff. Out with the old and in with the cash!
I shopped around and saved us $50/month on car insurance. Score!
It feels great to save and...remember when I mentioned about it's not a matter of if but WHEN you'll need that emergency fund?... Just this afternoon the 4 year old and his friend chucked some of our landscaping rocks and busted out a couple of windows on our neighbor's car:(