Personal Finance Failure?
Today I have spent a large part of my day getting personal with our finances again. In January, I mentioned I was going to do some personal finance organization since Paul lost his job (and has since found another one, more on that to come). We did a lot of reviews and “what if” scenarios but there was more “stuff” I wanted to do. I finally sat down and took some “ME” time to make this a priority.
Before I get into the what I have been doing, let me back up for a second.
Early last year our van lease was coming up. We knew we wanted to purchase it outright but hadn't saved the full amount to pay cash. We didn't want to get into a new lease because the van worked for us. So we got a loan and were able to pay cash for a portion of the purchase. We ensured that there was no early payoff penalties involved with the loan because our intention was to pay it off within the year.
Well, that plan got sidetracked when Paul's car died.
Last year I shared that we needed to replace Paul's jacked up car. I started saving for it. I wanted to have $15,000 saved to find a suitable replacement that would last a long time. Well, when the car died we only had half of that amount saved. We had to get a loan to pay for the remainder and made sure of no early payoff penalties.
I was trying to convince Paul to be a one-car family for a while. I was sure we could do it but he wasn't having it. So I gave up trying to convince him of that and we got the car. It was a great price despite the fact that we had to get a loan.
I wanted to share all of this with you but I got busy and then I felt like a failure. Here I am professing how we have been trying to pay off our debt and then we had to incur debt again. It wasn't consumer debt, but I was still disappointed.
After talking through the reasoning with Paul before we got the car, he made an important statement, one which he has said to me many times in our marriage: stop caring what others think. I make a lot of our life public because of the nature of what I do, I shouldn't try to force our family into something just to “save face” with all of you. I realized I was afraid of appearing as a failure since we got a loan. I need to get over what people think of me since they aren't living my life. This is OUR personal finance story, not anyone else's.
Oh and yeah, last year, we also paid off our student loan balances. Baby steps that I forgot to share too so I wasn't just not sharing the perceived negative.
Fast forward to January 13 and Paul's unexpected job loss. I remember sitting on the plan telling Erin that “This was the year for us to accelerate paying off the rest of our debts (house, cars) and really start to invest. I guess that will be put on hold.” To which Erin encouragingly replied that nothing would have to be on hold and to wait and see how God provides.
God did provide. He always does.
Since Paul landed a new position quickly, a portion of the money we had in savings was taken to pay off the cars. I'm glad we had it in savings and didn't take the money to pay off the cars earlier. Whether that makes financial sense, I don't know. It gave us peace of mind and we can work on building up the savings again.
We are working on paying off the house now. And, we're going to sock away money in savings, save for a few home projects and focus on investing more. I wasn't a house payoff zealot but I am now. I'm saving the reason for that for another post.
So the point in sharing a lot of this is that this is our personal finance story. It's probably different than everyone who reads here. I'm sure we've all been faced with similar circumstances at some point and I know we can learn from one another. I share my story and what I'm doing in hopes that it inspires you to think about something different. I am inspired and think differently through things when I hear from each of you as well.
We are creating our new budget, those details and what I've done will come in another post since this one is super long and I don't want to bore you. :) I had to bear my soul and get out what I've not had time to share over the craziness of the past year. Mess, success or whatever else, it's all part of the master plan. The timing or circumstances aren't always ideal but I've learned so much…and I'm even more thankful for them.
Do you have your budget in order this year?
Any tips to share with others working on one?
I understand about the whole car thing. My husband’s car was falling apart. We had to put over $2000.00 in repairs last year. We have had the car for close to 4 years by then and we only paid $2800.00 for it. He works in DC and comes home on the weekend, lots of miles. The car only took premium gas which really ate up our budget. We decided to take out a loan for a new car since we had used our saving for car repairs and windows and get a car with much better gas mileage. When we were debating about getting the car loan, we looked at how much he was spending in gas each month and estimated about how much gas would be with the new car( we average high). The amount we save in gas pays for the car payment, so no added expense to our budget. He was spending on average $600 a month in gas with the old car. The new car is around $280 and a car payment of $300. This took the guilt away once we looked at it all on paper plus the old car clutch was starting to slip and would require more costly repairs. My husband typically does most of the routine maintenance which saves money as well.
Sabra, that is a good point on the gas mileage. We just put new tires on the car that year and did some other minor repairs. We figure it was a lost cause when it officially died. At least we got some money back from taking it to a junkyard (not much, but it was a few hundred bucks).
Something else I didn’t think about was the insurance. Our other car was really old and the insurance was more expensive because of that. With his car now, our rates are lower even with full coverage. That and gas, and any potential issues can add up to thousands over time.
Hi Andrea,
My personal finance “fail” but I’d do it over again is that when my job was eliminated last summer, I took a distribution form my ROTH IRA to pay down credit card debt we had. I too found a new job quickly and we are on track to eliminate the remainder of the credit card debt this summer. It is a big relief for me and my job loss really got my husband on my my side in this debt reduction journey. Luckily he got a promotion and a big raise and so we are going to be able to pay off the tax penalties for the ROTH distribution.
I know a lot of people would do things different than us: Our son attends a Parochial HS, we buy new cars and keep them 10 years. ( we alternate buying a new car every 5 years). But this works for us.
Good luck to you.
I’m glad you shared the real version of your story. I read finance blogs and people make it seem so easy! It makes me feel like we never make the right choices, even if we are really trying! Thankyou!
Mari, I felt the same way! So glad you stopped by and got some encouragement!