I don't know that I could get the same cooperation out of my kids, but I want to take a lot of her ideas and put them to use. My oldest, having some pretty wealthy friends, with big allowances, closets full of designer clothes, and pricey vacations, might have the hardest time with a huge cut-back. She compares her life with theirs, which is quite unfair to us anyway, not to mention unrealistic.
Looking at our monthly budget, which for years I have planned out sixth months in advance on Excel spreadsheets down to the dollar, I must note that the money allotted to entertainment, dining out, clothing, and my own personal spending money has always been on the small side. Our biggest expenses each month are the mortgage, food, private school, and of course utilities and revolving debt. We have always lived with not much leftover after paying the bills. I have used the envelope system on and off for years, and now I am trying to stick to it. It's not easy. There are always things that pop up that are unanticipated. We've increased the miscellaneous category to try to include more funds for those surprises. My husband and I have probably been on a date twice this year. That's not a category that I've made a priority, even though we should.
But, there are always things we don't have to buy. I think the biggest areas we can pare down are dining out while out on errands, buying clothes my kids don't need, and cutting back on our monthly cell phone bill by finding cheaper plans. My kids buy all of their own toys with their allowance money, unless it is their birthday or Christmas, so that is not an issue. My oldest buys 90% of her own clothes too, and passes them down to her sisters. We could cut back on Christmas, which we have already by not buying much at all for extended family. The gifts I buy for our kids and husband are almost 90% things that they actually need, not "fun" stuff.
Let's face it, we all have tough choices to make. We want to move so we can be in a better school district and avoid private school, which will help a lot, and also with no home equity payment we will be better able to pay down debt and sock away money into an emergency fund.
I think if I could have done anything differently years ago, I would have pushed for an emergency fund before signing up for Roth IRAS and whole life insurance, as we were pressured to do in 2001. We got some bad financial advice from someone we thought was a financial planner but was actually an insurance sales guy, and I am still ticked about it. We weren't savvy then about the difference between an independent financial advisor, and someone working on commission. The number one goal of any financial plan should be to build an emergency fund and pay off (or never get into) debt. Then you start saving for retirement, and then for college. The financial "planner" would not have made a commission on us if we had said we wanted sixth months of expenses saved before we started saving for retirement. Don't buy whole life insurance either, or just a very small amount. But that is for another post.
No comments:
Post a Comment