Reining it all In and making new goals

I am reining in my unnecessary spending.  Yes I have spent money over the past month that I shouldn't have.  Time to get back on track and make some new financial goals. 

1.  Make a list and go to Wal-mart once a week.  I've been disorganized and this has led to my going to Wal-mart one too many times and picking up a few impulse purchases along the way.  Enough said here.

2.  Grocery spending.  Make up menus to use up what is in the freezer and save the balance of my budgeted grocery money.

3.  Save money towards a semi-private vinyl fence for our yard to be installed next summer.

Along with these new goals are the old ones of paying off debt by March 2012, putting money into savings each month along with paying off the mortgage as soon as we can.

I have some other goals that I have made that are things I want to do.

1.  Go bungee jumping - NOT!!!!  I want to learn to make soap.  This is something I have always wanted to do.  There is something about using lye that kind of freaks me out, but as I have read and watched the tutorials I know I can do it.  It is just finding the time.

2.  Learn to sew some vintage clothes from the Edwardian/Titantic era.  Next to making soap, this is something I want to do.  It will mean I need to practice my sewing skills so I can actually accomplish some more difficult techniques. 

3.  Learn to knit on the round knitting looms I bought.

I see so many people make financial goals and that's great.  In the quest to quit spending excessively and to pay things down, don't forget the fun goals that you can make.  Is there something that you want to learn to do, but never made the time?  Many of the things that I want to do won't cost much money.   

There's something gratifying about working on financial goals while also learning to do something new.  If you are facing a mountain of debt that will take you a long time to dig out of, the worst thing you can do is to be totally obsessed by it and think of nothing else.  Make your financial plan and goals and stick with it.   While you should take getting out of debt serious, there is no reason you can't also bring joy to your life by learning to do something new.  It makes your life interesting.

Preparing for the Future

It’s been almost a week since I posted.  There are so many things I need to do but my energy level has been low.  Last week I felt “cruddy.”  I was tired a lot. Actually I think I had a mild case of the flu and so I didn’t push it too much and rested.  This is the luxury of being home in my opinion.  I can lie down on the couch when I don’t feel well and take a nap. 

Last week my husband was offered an opportunity to change jobs.  He wasn’t looking for a job as he is very happy with where he is working right now.  Sometimes though opportunities come along when you aren’t looking for them and then you find yourself trying to make a life decision – one you hadn’t asked for.

So last week we spent a few days trying to decide what was best for him and our family.  He would have to work in a community that is about a 30 minute drive from our home.  The salary and benefits are better.   If you looked at it from a financial view, you would immediately think that the obvious choice would be to take the new job. After all more money and better benefits translates into more money to pay off bills and our mortgage sooner.  It also means more money for retirement.

But it also means working in another community which means you can’t walk to and from work anymore nor come home for lunch.  My DH has a tremendous amount of flexibility with his job which is why he is also able to coach cross country for the local high school.  This is something he would have to give up.

So in the end the decision my husband made was to stay right where he was at.  Sometimes you can’t put a price on the non-monetary benefits that a job can offer you. 

The one thing that I have always worried about is that in light of what has happened in the past few years, job security is a thing of the past.  Companies can close or be bought out and employees can be laid off through downsizing.  My husband and I have never talked much about what would happen if he found himself out of a job when he is in his late 50’s, until this weekend. 

My husband is 53 years old and I am 52.  We talked about the scenario of being out of a job in his late 50’s and what we would do.  How would we pay our bills?  We came up with a plan which involves continuing to be careful about our hard earned money.   Our credit card debt will be paid off between January and March of 2012.  What a relief.  And what comes next – the mortgage.  Think about it – what would your life be like if you had no credit card debt, no car payments and no mortgage?  Without those bills, my DH could work a job that pays considerably less money.  We talked about all the possibilities. 

The key is that we live simply and will continue to live simply.  Nothing will change. 

I have a goal in the next year or so to start my own business.  It won’t be a big money maker, but I do hope that I can at least net around $300 a month.  I want to make bar soap, lotions, lip balms and lotion bars to sell.  It’s something I have always been interested in doing.  At the very least I could start out by making these as gifts to give to my family and friends on special occasions.  It’s a hobby that could be transformed into a modest money maker.  I'd be interested to hear from anyone who has ever started a "cottage" business.

I started this blog as a way to keep track of my new lifestyle and how I could cut back on expenses to live on one income.  Now I am realizing that this lifestyle is the way we will continue to live for the rest of our lives and that is so freeing.  My husband does not need to work a job that pays more money just so we can buy more stuff.  That is not freeing.  It is far more fun to live on less and enjoy the freedom that it brings to become debt free.

Spending Money When You Know You Shouldn't

I have been so tired over the last few days and haven't posted updates on the Tightwad Gazette III, something that I will be doing later on today.  I think all that walking, driving and being in a different time zone wrecked havoc on me.  I refuse to say that it is because I am getting older, I think I am just a little more "sensitive."  Okay, I am getting older and somehow I don't quite adjust from a long road trip like I used to. 

But that's not the point of this post. 

Do you ever struggle with spending a lot of money on something when you know deep down, you probably shouldn't spend it?  I struggled with that when we wanted to go to Washington, D.C. as part of our son's graduation present.  The decision to go on that trip came from my belief that sometimes you just have to take an opportunity to do something with your family that you may never be able to do again.  This was a trip that meant a great deal to our son and to me too.  So we spent the money.

BUT ....

we knew our roof was in bad shape and would need to be replaced this year.  And this morning we had an electrical problem in our kitchen, so now we will need an electrician to come out to fix it. 

I know that we will be living on a super tight budget over the next year to pay for the roof and I would rather do that than have forfeited the trip to Washington, D.C.  I still get a giggle when I think about how much fun we had and how much we enjoyed that trip.  It will be well worth scrimping now to pay for a roof than to have stayed home from that trip.

Sometimes you have to go against what financial experts say and do what in your heart you know is the right thing to do.  I know we made the right choice.

Is Advice from TV Financial Advisors Realistic?

I have listened to several financial advisors on TV programs over the years. In the past year they have been preaching the same mantra: Get at least “X” amount of months’ expenses in an emergency fund, you need to have “X” amount of money saved for retirement and do not depend on Social Security nor your spouse for retirement money.

I don’t subscribe to any one financial advisor. I listen to Suze Orman and David Bach and Jean Chatzky. I am going to co-lead Dave Ramsey’s Financial Peace University at our church in two weeks. I don’t take one person’s advice and call it gospel. In fact, I don’t believe in what I call “cookie cutter” financial advice. What I mean by that is I believe everyone’s financial situation is different and what may work for one person, does not work for another. I also don’t believe in a magic number for everyone (emergency fund or retirement money).

Instead I am in favor of looking at the individual and their circumstances and give advice tailored only to them. With this belief of mine, let’s look at what the financial advisors have said.

1. Emergency Fund – Each financial advisor gives a different number of months’ expenses to have saved. Some say 6 months, others 8 or 9 months. Today I heard someone on TV say that you need to have 1 year of expense money in the bank. I got a little angry when I heard this. My first thought was, okay you’re on TV and getting paid the big bucks so that’s easy for you to say. My second thought was you have given out a goal that in many cases is set too high and is unrealistic.

I do not dispute that you should have money in savings. Having money in savings for unexpected “emergencies” is a necessity. If I was approached by a couple and they asked me how much they should have in savings for an emergency fund, my question would be back to them “how much do you realistically think you can put in the bank each month for emergencies?” They would give me a number. Then I would challenge them to try and do a little more by giving up something. Perhaps they could cut back to eating out only once a week instead of three times a week and put that money in the bank.

When someone has decided to take financial management seriously and especially when they have never done that before, I would never say you have to have all of this money in savings before you can do anything else.

I am a big believer in baby steps. When you want to lose weight, you don’t immediately go on a very restrictive diet and begin running and weight lifting if you have never done any of the above before. You tackle one thing and then over time you work in fitness and other good habits. Too much change and deprivation at one time, is setting you up for failure. I feel the same with finances.

2. You need to have “X” amount saved for retirement. Many financial advisors on TV give out an outlandish amount for retirement. Every time I hear “you must have a minimum of $1,000,000 in a retirement account,” I wonder what on earth they think everyone does for a living. Yes, I know, we are all living longer than our parents and we will be living longer in our retirement years. But just what kind of lifestyle am I planning on living at retirement? Answer – the same that I am living now.

Yes, saving for retirement is important and we contribute to my husband’s retirement account. At retirement our mortgage will be paid off, we will either continue to live in our house or we will buy a two bedroom bungalow with the funds from the sale of our present home. We will go to being a one car family at that time and we will continue to take 1 or 2 vacation road trips each year.

3. I am a member of AARP. Social security, no matter what the hype, will be there for me and my husband at retirement. If my husband and I wait until 67 years of age to collect social security (15 more years for me and 14 more years for him) we will receive $3,700 in monthly benefits. We can live on that easily but the one thing that will cost us will be our supplemental health insurance. Otherwise, we will be able to maintain our current lifestyle on social security alone. We have crunched the numbers and have added in for inflation.

4. If I outlive my husband, I will get social security survivor’s monthly benefits, my social security monthly benefit, life insurance money and the balance of his retirement money.

Everyone has a different financial situation and everyone has to look hard at their finances and make plans and set goals. Just as God made us all different, so are our financial circumstances.

Setting high goals of 1 year of expenses in the bank for an emergency fund and needing a minimum $1,000,000 in the bank for retirement can be overwhelming to someone who is making $46,000 a year. ($46,000 is the median household income in our county.) Instead we should be looking at the individual and at what is reasonable for them to save for an emergency fund and for retirement.

So why am co-leading a David Ramsey seminar?  Because I believe in David's basic premise and I also know that I have skills beyond the seminar to teach others how to save money.  It's not enough to say that you need to cut back on your expenses.  We need to also teach people specific ways that they can do exactly that.  

Meeting our Financial Goals

There are blogs that I follow of women who are dealing with debt and are serious about getting things paid down and finally being debt free.  I am fascinated by their stories as I can totally relate to what they are experiencing. 

We are 6 months away from fulfilling our 3 year goal of having a car payment and our mortgage as our only debt.  While I am not considering this being debt free, it is very, very close. 

How did it feel back then to look at three years of serious cutting back in order to accomplish this goal?  Well, in a way 3 years seemed like a long time but as we stayed committed and started to see our plan work, I got more excited as each month passed.  Then 9 months into our three year plan, I lost my job and was home full time.  Having a 9 month warning was more than what a lot of people get when they lose their job so we took advantage of those 9 months of getting money into savings and working on our debt reduction plan.

I believe that the reason we have been able to stick with our plan is due to the fact that I have been happy.  My happiness comes from being home full time.  While I enjoyed my employment as a legal assistant, I find that I am much happier being a stay at home wife and mom. 

In my opinion, if you're miserable and you are trying to pay off debt, it will be more difficult for you.  You will want to spend money in order to make yourself happy.  If you go ahead and buy something that you feel will bring you happiness, it will be short term and then you will find yourself back to being unhappy because you spent the money that you didn't have.

My advice is this.  I know it will probably go against everything that some financial experts will tell you.  Here it is.  If you are going to be miserable, better to take some extra time to pay down the debt and give yourself some breathing room, than to set yourself up for failure by trying to be too restrictive and then becoming miserable and disillusioned with putting all your money towards debt.  For example, if you are working a job that you hate and you are miserable but you have no other employment options, I wouldn't cut the cablevision in order to save money if that is your one source of enjoyment and entertainment when you come home at night. 

My husband was working a miserable job between July 2009 and January 2010.  We were blessed when he found a new job in February 2010 that he is totally happy doing.  Those 6 months that he was so unhappy in his work would have been more miserable if we hadn't freed up a little money for him to buy tickets to some college basketball games.

2 1/2 years ago it seemed like a long time for our plan to be fulfilled, but along the way as one debt was paid off and then another, we had small celebrations.  There was constant affirmation that we were accomplishing our goal. 

We had to pick a starting point, that is a commitment to cut back and focus on getting the job done.  Then we had to pick a realistic ending point.  In other words 3 years was a realistic amount of time for us to get the debt paid off, but it did mean sacrifice.  Our motivation was to get the job done before our youngest son went to college this year. 

So here we are 6 months from our goal.  Has it been worth it?  Yes.  Has it been scarey at times?  Yes as we had unexpected expenses and our savings account dwindled to next to nothing a time or two.  Have we had to sacrifice?  Yes.  We have consistently had to find cheaper sources for items that we needed and have learned to do without.  We have constantly been reminded of what is a want and what is a need.

So to those of you that are beginning the journey of debt reduction from someone who is coming close to meeting her goal, keep your focus on the end of the race and constantly look to what your life will be like after your goal is met.  Think daily about what it will be like without the debt hanging over your head and it will spur you on to cut back, save those pennies and commit to meeting your goal. 

It has been worth it all.

Reducing our Debt

In the fall of 2008 when I learned that there was a great probability that I would be losing my job in 9 months, I came home and told my husband that I really didn’t want to look for another job. I wanted to stay home full time but on one condition. I wanted to make sure that we could afford it.

At that time we had a considerable amount of debt stemming from some credit card debt to auto loans and our mortgage to loans we had taken out to help put our son through college. After we sat down and looked at the debt and considering the time we had to prepare to go to one income and the time we had until our other son went to college (fall of 2011), it became clear that I would be able to stay home if we stuck to our financial plan. This plan became a three year plan of paying down debt to the point that the only debt we would have is a car loan and our mortgage by the fall of 2011.

In the 9 months leading up to my becoming unemployed, we buckled down and took advantage of my income and paid off the majority of the credit card debt. We also built up our savings.

Our income was reduced close to 1/3 when I lost my job. That is why I have tried hard to watch those pennies as I could see in our budget “leaks” that added up to a great amount of money. I became diligent at learning ways to run a home more economically and to make things last and to also learn to do without. This was hard for me as I was not used to doing without. I learned to coupon and to build a stockpile on less money than what I had been spending on groceries prior to becoming unemployed.

We set up rules to our financial plan. 1. We put money into my husband’s 401K plan up to what his employer matched – no matter what. 2. We put money into a college fund for our youngest son – no matter what. 3. We gave money to our church out of each paycheck – no matter what. 4. We put money into savings, albeit it was and has been a small amount – no matter what. 5. We doubled and tripled what we were paying on debt – no matter what. 6. We lived on what was left.

It takes quite a bit of faith and willpower to put numbers 1 through 5 in place and then live on what is left. Now, I don’t want to mislead you into thinking that we were putting thousands of dollars in numbers 1 through 4. It was what we could afford on one income. If we didn’t do 1 through 4 we would have been able to pay off our debt sooner, but we would have put our finances into jeopardy. You see we aren’t just paying off debt. We are also saving for our future.

When we had some extra household expenses or car expenses our savings account got very, very low to the point that the balance was less than $100. But, our bills were paid and we persevered. One time my husband told me that we only had $60 until payday, which was one week away. All our bills had been paid and I had purchased groceries so we felt victorious that we had money left.

When you are only paying a small amount on a debt, it is draining not to see progress in the balance going down. When you continually see the debt balance going down considerably it gives you the encouragement to keep doing what you’re doing.

The first year I was home was the hardest year because I had a lot to learn about cutting back on expenses. Now we’re into our second year and we have seen debts being paid off and we are coming close to getting all but 1 car loan and our mortgage paid off by the time our youngest son goes to college in the fall.

It has not been without pitfalls. I have had my share of sleepless nights worrying about if our old furnace would break down, about the old roof holding on just one more year and about other maintenance issues in our old house. And then I thank God for our old house and low mortgage payment and that we have not had too many repair issues.

When you sit down and add up your debt and you see the numbers, you may want to throw up your hands and give up. It is easier to continue on and live the lifestyle you have been living and only make minimum payments. The years it may take to cut back and sacrifice by living a frugal lifestyle to pay off debt can seem overwhelming. But, you have to begin somewhere.

Paying off debt brings independence and security. So I would encourage you to be brave and sit down and add up your debt. Look at the total of that debt. Do you want to see that same amount next year at this time? Start today to make a plan to bring your finances in order and start to pay off that debt. Take it one day, one month and one year at a time. Watch the balance go down and determine not to add to that balance. Again, you have to begin somewhere. Start today.

Our Budget is my Friend

We have been living on one income since July 31, 2009.  While I wish we had more income (everybody wishes the same thing), I can honestly say that I have gotten comfortable with living on the one income.  By that I mean that I am so used to bargain shopping and putting off purchases that it has become a way of life. 

In the fall of 2008 I knew there was a good possibility that I would be losing my job in the spring.  We had about 9 months warning of that possibility.  I sat down with my husband and told him that I didn't want to look for another job.  I wanted to stay home.  But I also wanted to make sure that we would be able to make it financially.  So after looking over our finances, we both concluded that I could stay home as long as I worked to at least March of 2009.  I knew that the soonest I would be without work would be July 2009, so we both knew that we could do it.  The only fact that we knew for sure was that the first year would be the roughest and it was. 

We're well into the second year and while our income has only increased by $50 a month, we are able to pay our bills, set some money aside in savings and pay down debt.

The one thing that has brought me peace of mind throughout the past 18 months is that we have a budget and I have learned to live within it.   We reviewed our spending and saw areas that we were overspending and knew we could cut back on those areas.  We also looked at areas that we did not budget, but we were spending money.  Those areas included some miscellaneous spending, entertainment and eating out.  We started to budget for those items.  We didn't put a lot of money in those categories, but we still budgeted for those areas.  It's odd but when I see that I have "x" amount of dollars to spend in a certain category, I am more apt to stay within that guideline.  I don't want to jeopardize my being able to stay home by overspending if I can help it. 

There were two months that first year that were tough.  It was November and December 2009.  At that time what was making it tough was that my husband was seeing the writing on the wall as to his job and he had started to look for a new job.  I would go so far as to say he was miserable.  Added to that stress was that we had some extra expenses those months, along with Christmas, which created a very high level of stress in our household.

I pondered during those two months if I needed to go back to work to help alleviate the stress in our household and take back some of the income producing responsibility.  But we got back on track with our budget in January 2010 and at the end of that month my husband had found a new job which he loves.  I decided that I should continue and persevere being home.  It was too early to throw in the towel and give in to fear.

Yes, I said fear.  There is a small amount of fear of living on one income.  After all if my husband were to lose his job, we don't have a second income to fall back on.  Yet, I can't live my life fearing something that may never happen.   In any event, we are preparing every month by putting money in savings just in case this would ever happen.

Now we are only 7 months away from having only our mortgage and one car loan as debt.  The same month we have the debt paid off, our youngest goes to college.  Still, financially speaking, we are making it and will continue to make it. 

I read recently that the unemployment numbers will not go back to their pre-recession numbers until 2016.  I read another article that said that the unemployment numbers will never be that low again.  Everyone has an opinion and each financial analyst makes an educated guess. 

No one can say for sure what the job market will be like in the future.  This is what I do know - be prepared.  The age old sentiment of saving for a rainy day still holds true. Those good ole fashioned values of waste not, want not are in vogue. 

I'll add a new sentiment:  a budget is your friend.

The Contents of a Safety Deposit Box

Last year we moved our accounts to a different bank, but we didn't move our safety deposit box as the rent on it didn't expire til this month.  My husband closed the account yesterday and brought home the contents. We will be opening a safety deposit box at our new bank later this week. I looked through everything yesterday and had forgotten about a lot of the items that we had in that box.  It was almost like opening a time capsule.

When our kids were born, there were no digital cameras.  I always worried that in case of some kind of disaster (i.e., flood, tornado, fire) pictures would get destroyed.  As I looked through the contents of that safety deposit box, there were several envelopes that had photo negatives.  When our kids were young, each year we would take 1 or 2 rolls of film negatives and put them in the safety deposit box.  Then, at least, we would have some pictures of our children in case of a disaster.  Now, we can simply burn a c.d. with a year's worth of pictures on 1 c.d. to put into our safety deposit box.  How times have changed.

There were coins in the box.  We had collected a set of the State quarters for our sons and there were some old coins that were given to our sons from their grandmother. 

Then there were the legal documents such as our Last Wills and Testaments, our Powers of Attorney and our Abstract of Title for our house, birth certificates for my husband and me and our youngest son and our immunization cards.  Then in one large envelope there were the pictures of our deceased daughter, Kelsey, and her birth and death certificates. 

As I looked at our Wills, I was happy to know that we had prepared such a document for our family in case of our deaths.  Our oldest son was happy to know that since his brother made it to 18 years of age last week, that he and his wife wouldn't have to worry about being a guardian to his youngest brother in case we would die.

In one envelope there was a jewelry appraisal of my rings and a few necklaces.  There was my wedding and engagement ring that needs to be repaired as soon as the price of gold goes down - whenever that happens.  I wear a beautiful ring that my husband gave me on our 25th anniversary that serves as a wedding band. 

There are other pieces of family memorabilia such as baptismal certificates and also some financial papers.

That small box contained a small history of our family.  Now we are sorting through those items and giving our oldest son items that belong to him and also reviewing what doesn't apply to us anymore.  At the end of this week we will again pack up the majority of what my husband brought home and it will go into a new safety deposit box for safe keeping.  We will then add to it as time goes on and take out of it what doesn't apply anymore. 

Retirement on One Income

When women find out that I am no longer working, they usually make a comment about having money for retirement is why they work.  It is almost as if they are saying to me that I am not saving for retirement by not earning an income.  This is not true.  I contribute to our family's financial well being by making conscious decisions about our money - finding ways to spend less on items that we need and thereby being able to save money.

When I "retired" from my former job, I had a small retirement fund. Right now it is at $14,000 and I quit contributing to it when I quit working.  Instead, we fund my husband's retirement account since it is matched somewhat by his employer.  So after working for 27 years or so, I came away with $14,000 in retirement.  I know, more and more working women are offered 401K plans from the start.  When I started working in the early 1980's, there weren't many retirement plans out there.  In fact it wasn't until the late 1990's when my employer began a 401K plan for his employees.

How we live now is how we plan to live during our retirement years.  We live conservatively and that will not change in retirement.  When you listen to any financial "expert" on a news program they give an outlandish amount, in my opinion, of what everyone needs to have in their retirement fund.  I know that we are living longer and that in turn will require more income in retirement, but when is it overkill?  Actually I think that a lot of parents are not only considering retirement savings but have included an inheritance amount that they would like to leave their children. 

We have estate plans in place if we would die when our children are young, but I have never included the plan to have more money than I need in retirement in order to leave my children an inheritance.  Our inheritance for our children is that we have and are going to pay for the majority of their college education and to also pay for a portion of their weddings.  Our feeling is that this "inheritance" at the beginning of their young adult lives is far more beneficial and gives them a head start than any inheritance later in their lives.

If a married woman wants to be home with her children and make a career at home, never joining the workforce, is she making a financial mistake which will lead to disaster in retirement because she has not earned an income?  I don't think so as long as she and her husband make good financial decisions along the way. 

I know there are families out there that have lost a lot of their retirement due to the Recession and there is a need especially if they are near retirement age to put more money in retirement.  I recognize that scenario.  I am talking about women who get married and want to stay home with their children but feel the pressure to work so that they can fund a retirement account. 

When did we get to this point?  I really think that if a woman wants to be home with her children or for that matter wants to be a stay at home wife without children, that if she and her spouse/partner make good financial decisions, that they will be just fine in retirement.  Being in the workplace is not for everyone.  Living below your means so that you can put money into retirement and other savings can happen on one income.  You just have to embrace a different lifestyle. 

When others are buying homes that have 4 or 5 bedrooms along with 3 bathrooms, you have to look at a home that perhaps has 3 bedrooms and 1 bathroom that is well within your price range.  When others are buying a brand new gas guzzler SUV, you look at a more modest priced used car.  When has comfortable living been equated with bigger and better?  When has retirement savings required two incomes?

It goes back to quality of life and being happy does not go hand in hand with a large income.  I cannot imagine being miserable in a job I do not like for the next 15 years in order to have more money for retirement.  I'm all for delayed gratification but not when it means I am unhappy for 15 years.  I would much rather live below my means and fund our retirement through my husband's retirement account and our cost cutting lifestyle in order to put more into savings. 

By the time we retire, our mortgage will be paid.  We have looked to the future and know the approximate amount of monthly income we will have in retirement and it is enough to live the conservative life we are presently living.  Honestly I could see my husband working a small part time job if it involved an area of interest such as continuing to coach cross country, but only if he wants to.

Living in a modest home, driving a used car and thereby living below your means will serve everyone for their lifetime.  Even though I am not earning an income, I contribute financially by making conscious decisions on how I spend our money.  Spending less, means saving more for an emergency fund, for savings and for retirement. 

Wrong Impressions

I need to clarify something from my post "Making Financial Decisions - Part 2" re my DH.  I quoted him as saying "Your job is to take care of us."  In only giving that quote, I fear I have given everyone the wrong impression of my DH. 

My DH grew up in a two income household.  In the 1960's his mom went back to college, got her degree and has been working in the field of social work ever since.  His father is a minister and he helped around the house a lot.  When I say help around the house I am talking about laundry, cleaning and other traditional "female" tasks.  They had a total of 5 children, so his father knew that he needed to pitch in and help and he did.

When we got married I was surprised at how much my DH helped me around the house.  He had quite the example in his father as in my DH's mind, there are no such things as male or female jobs.  There are just jobs and things that need to get done.

I am always second guessing things or as I prefer to say "I like to ponder a lot."  In the almost 30 years that we have been married my DH has never told me what to do.  I have worked all but a few of those years at jobs that I took because I wanted to work.  He is not over me in leadership in our household as we consider ourselves a team.  We make decisions together, although sometimes we both must think about the other person's viewpoint which could take a few days. 

My DH made that statement so I wouldn't keep "pondering."  In the end it is entirely up to me if I work outside of the home or don't work.  He wants me to be happy and I in turn want the same for him.

A Book Review - The Simple Dollar

"The Simple Dollar -How one man wiped out his debts and achieved the life of his dreams" by Trent Hamm was published last month.  I follow Trent on his site The Simple Dollar.  He is from the Des Moines area and I am drawn to his story about being head over heels in debt and how he got out of it and changed his view on money and living life. His book was just published in early June.

My favorite part of the book is at the beginning when he realized that he didn't have enough money to pay his bills. He and his wife had a baby boy at the time and he walked into the nursery and sat in a chair and started to cry. Trent was at rock bottom and he found the strength to do whatever it took to get out of debt. He even went as far as selling many possessions on e-bay to pay down debt.

I highly recommend this book as it not only tells his story it gives great advice and I'm not necessarily talking about how to stretch a dollar, but how to view money and your life. It is a well written book. Reading it over the past few days when I was facing my own budget issues, has made me feel so much better about myself and also about how I feel about money and my goals in life.

We all make mistakes and we have the opportunity to learn from them. Go to the library and get Trent's book or at the very least go online and look at his website.  If you haven't heard about him, I know you will be encouraged after you read his story and see how much he has accomplished in just a few years.

Emergency fund, what emergency fund.

I always knew that the first year that I would be home full time was going to be a year of "educating" myself about living on a budget, living frugally (not cheaply) and learning to get real about how much money we actually need to live on.  When you make a drastic change in your life, you know that there are going to be ups and downs, times when you may want to give up and  there is going to be a learning curve along the way.  I just looked back over this last sentence and I think I just described parenthood. 

Our emergency fund is at zero.  It makes me uncomfortable.  I guess that is the bad news.  The good news is that we can live on my husband's income and there is enough each month to set aside for savings.  We just have to start all over again.

I like to watch Suzy Orman and I do believe she gives great advice.  There is a segment on her show called "Can I afford that?"  I know that last year when I lost my job and decided to stay home permanently that she would have denied me if I would have asked her if I could afford to stay home.  First of all she would have said that we don't have an 8 month emergency fund.  Saving up 8 months of living expenses for an emergency fund is unrealistic.  I understand where Suzy is coming from in that with high unemployment it takes a lot longer to find a job if my husband were to lose his job and 8 months in savings to cover living expenses for that period of time is prudent.

I was losing my job, we had saved as much as we could, I didn't want to look for another job and I saw an opportunity to be home full time. 

So here we are starting an emergency savings fund all over again.  I'm just happy that each month we have the money to pay our expenses, pay extra on debt and put some money in savings.  I keep looking to one year from now when we will only have our mortgage and a car payment as debt. 

In the meantime I continue to educate myself as to ways to live more frugally and to enjoy my simple life.

Unexpected expense

Yesterday we had an unexpected expense in the area of $700 that has left me reeling a little.  We had the money in savings which I am thankful for.  It was disappointing but also gratifying that we had the money to pay the expense without putting it on a credit card.  Yes the emergency fund is low, but with what I have learned over the last several months on cutting back, I know we can start building it back up.

Years ago we would have just pulled out our credit card and added more debt to what we already had.  Now we plan ahead and it makes me feel so secure.

So today I am thankful that we had money in the bank to pay for an extra expense and I am grateful.

A College Visit

On Thursday we made a college visit to the university located in our community.  It is our youngest son's first choice.  I have not been on the campus for several years and in the past couple of years there has been a major building campaign.

One of the buildings is a huge athletic center and another new building is a large facility that houses many state of the art classrooms.  As we toured the campus I met several people that I knew. 

The best part of the visit was not only having our son walk around and knowing that this college was a perfect fit for him, but it was when we sat down with the admissions counselor and she ran the numbers past us.

Tuition is around $20,000 per year, which is a bargain for a private college.  However, since we live in the county and town that the school is located in, there is a special rate for local residents:  $5,000 tuition per year as long as your g.p.a. from high school is 3.0 or above and you maintain that throughout your 4 years.  I about fell off my chair.  Not only is this my son's first pick for college but it is also a bargain from a financial viewpoint.

He does not want to live on campus so we will only be paying tuition, books and other related expenses.  I do expect that by the time he would hit his junior year that he will probably share an apartment.

This is a big relief to me as he will be getting a private college education, be able to work and volunteer in our community (which is very important to him) and we will be able to do all of this without having to borrow a cent.

Paying for College

Financial experts always talk about how you should start saving for your children's college education when they are born.  I'm not sure about anyone else but when our boys were babies we did not have an extra $250 to $300 a month to set aside for college.

My DH and I made a decision a long time ago that we wanted to pay for as much as possible for both of our sons' college education.  Again, this was our decision and I don't push this belief on anyone else.  Everyone knows what they can and cannot afford to do for their children and all of us make choices. 

When we purchased our home we kept in mind that our oldest son would be going to college in 6 years.  We bought a house "below our means" knowing we would have a college education to pay for in a few years.  One year before he went to college, I was given the opportunity to work full time at the law firm.  I had been working 30 hours a week and now I would be working 40 plus. 

Our son worked the last year of high school and while in college he had summer jobs.  The cost of one year of college at the private college he attended was around $23,000 a year (his freshmen year) which included tuition, room and board.  He attended a college out of state.  Scholarships lowered that amount to around $15,000 and along with what we paid and our son's financial contribution he graduated with around $19,000 in student loans.  This is not bad at all for a 4 year private college education. 

Then our son was able to become a graduate assistant at another college and he received his Master's degree tuition free. 

One time when we visited our son and his wife, he talked about the kids he was coaching at his coaching job at the college and how the bulk of them had no financial help from their parents.  Then he looked at us and said "thank you."  I never  doubted that he was grateful for all the financial help that we had given him in paying for college.  It was when he saw the students he was coaching struggling to pay for their own college education, that it was really brought home to him the sacrifice that we had made for him. 

Bottom line my working full time, putting off any major purchases and good planning paid for his education. 

Next year it is our youngest son's turn to go to college and our financial situation has changed drastically from when our oldest son went to college. 

The first thing I asked my DH when I made the decision to stay home was "Are we going to be able to pay for another college education?"  His response, "yes." 

How are we going to do it?  We have paid down debt considerably and by the time our youngest son goes to college our only debt will be a car payment and mortgage.  The money we won't be paying on debt will go towards a college payment.  We have also been setting aside $300 a month for a few years towards his college education.  It's never too late to set aside some money.  Lastly, our youngest son does have an after school job and as his brother did, he will have a job during summer vacations to help defray the costs. 

We left the choice of where our sons would attend college up to them.  We never limited them to a state university.  Actually with the type of financial aid offered to our oldest son, he received a private school education at a state university cost. 

Our youngest son will be attending college in the fall of 2011.  In the past few months he has surprised us by telling us that he wants to attend the private 4 year liberal arts college that is located in our community.  He is adament.  His main reason is that he wants to go into the field of political science and he has been involved in local politics for 3 years.  He is working for the local chamber of commerce and he feels that by going to college here, he will still be able to work and volunteer in the organizations that he is already associated with, and this will add to his education and career goals.

This is not a fleeting feeling, he has made his decision.  At first I tried to talk him out of it as I felt he needed to go to school away from home, but then I realized that his choice was a great fit for him.

Now for some possible ways to pay for his education.  We will have the money to make monthly payments but I am now thinking of other possibilities.  If I am able to get a job at the college, I can get free tuition for my son.  This would be the only reason that I would go back to work. 

Twenty years ago I worked at that college and I did enjoy my job.  I would do it again, for at least four years, if that meant that our son would receive free tuition.  If he wanted to, he could live here at home and then we would save room and board BUT we would never push that on him. 

Now I know that we go against the bulk of what financial experts are advising people in that they say that parents should put money towards retirement ahead of paying for your children's college education.  We are putting the maximum amount matched by my DH's employer into his retirement plan and when our youngest son graduates we will be able to save a lot of money towards retirement.  We do not desire to live a rich life when we are retired, but to maintain the life we have now.  We have done the math and it will happen.

Due to tight finances more families in our community are looking for ways to finance their children's education.  The result is that more and more local students are attending the private college here in our community and are living at home.  The other trend is that many are attending a community college located 25 miles south and are then transferring to a 4 year college. 

More and more kids are not wanting to be saddled with student loans as they are now seeing that they may have a hard time finding a job even after they get out of college.  It is great to see the trend towards fiscal responsibility and the way people are paying for college these days. 

In the end our youngest son is going to have the same opportunity our oldest son had. He will receive a college education at the college of his choice, with the bulk of his education being paid for by us.  Whether he attends a college locally or not, lives at home or on campus, or whether I get a job or not, the end result is the same.  He will get a degree and will not be saddled with a lot of student loan debt when he graduates.