Money Matters: Part 2

We've started our plan. No doubt it will be tweaked along the way, but we've got a good start.

1. Increase income--We don't know how else to cut expenses w/o compromising health. At first, increasing income also seemed impossible. Matt works 2 jobs, plus takes side work wherever possible. I work for 3 companies and manage the house and kids. There aren't enough hours in the day to work anymore. Two things we concluded: 1. We have to maximize what we're already doing. Matt needs to spend more time working on the job that makes more money. Tamara needs to work as much as possible, but still have balance for managing the home (because lack of time at home means the budget and home finances begin to deteriorate). 2. This will take time. I think we've always thought that, well, if we're working as hard as we can that everything will just fix itself. Nope. We're learning a whole new way to approach work that will yield us the greatest return and benefit. It's going to be a process, and it won't happen over night. Darn. We will get there though.
2. A measly $1k starter-emergency fund doesn't cut it. Rarely are our emergencies less than $1k. We looked through our past, and it's $2500 or more to cover emergencies. Saving enough to prepare for ruin has been our downfall: We first started attacking our debt and budget over 10 years ago, and then moved cross-country to a higher cost-of-living area. Another time--a new baby, early, birth issues along with a job that wasn't paying on time along with the largest tax bill we've ever had. Yet again, just recently, my car required a new clutch and new brakes--nearly $1700 worth of repairs. Each of these emergencies has wiped us out, and then some. We've spent our entire marriage starting over. Before we can pay off debt, we've got to make sure that we don't go into debt further b/c of life's emergencies. So, whether it's $1 or $100--each pay check is going to get a bit moved into that fund.
3. Pay off credit cards. Simple as that.
4. Pay off student loans.
5. Save even more. Now, I want to prepare for catastrophes.
6. Retirement, education, mortgage.

Another step, that doesn't really have a place is refinancing the house. Our mortgages will be the death of us, if we don't find a way soon to get it refinanced. Unfortunately, a lot of these other steps have to happen before a lender will even talk to us.

Goals. I read a great book that talked about having a "Would You Rather." This is that one thing you really, really, really want. For me, it's a tropical vacation for the family. For Matt, a guitar. The "Would You Rather" comes into play whenever we make purchases. Sure, it's always been in our heads to say would you rather buy a new car or get out of debt. However, there are days when it seems we will NEVER be out of debt. So, it's all to easy to say screw it, and buy whatever large or small item is tempting us (even when it's the more expensive cut of meat at the grocery, or gourmet item--I mean, after all, it's food & easily to justify as "needed"). So, now I say "Would I rather go on that vacation, or buy the organic, free-range, grass fed chicken eggs?" Makes it easy. Hello store-brand eggs. (This was just a random example--I really could care less about eggs.)

Out of curiosity--what's your "Would You Rather?"