Friday, February 15, 2019

Finances, Budgets, Savings ~ Our Story

There are generally three personality types when it comes to money.  The spender, the saver, or a combo of both (sometimes with a little extra tilt one way or the other.)  I have always been one to be a saver.  Though I have had my spending moments, which I will get to later in the post.  My hubby?  A saver.  Our kiddos?  A balance between spending, saving, and giving with healthy knowledge on finances.

What about you?  Be honest.  Are you a spender? A saver? Some mix of the two, if so which are you tending to lean more towards?

From the time I was little, most if not all money I received went into a savings account.  That is just my natural tendency.  As I got older, I began to start to diversify my savings.  How so?  I created different funds.

By the time I was halfway through high school I had a car fund, a savings account, a spend.  Why?  Because it all started once I could drive.  Had my first auto repair payment in which my dad paid for after it was done, but then told me I had to pay him back for half the repair costs.  Okay, no biggie, until I realized my next paycheck went to my dad.  And I had an old car.  How often it would need fixing was yet to be seen.  So I started a car fund.  Part of each paycheck went into a different savings account.  Then, when the next car repair came around, I just gave my dad cash right away for it.  And I still had money in my savings account, plus my next paycheck was coming up and it wasn't going straight to my dad.

You notice how I said when the next car repair came around?  I said when, not if, because it is only a matter of time before expenses come back around.

I kept that going for awhile until I got engaged.  Well, not being one to much a spender as it was and I knew I had some time before we set a wedding date (we were in college and were going to wait until we graduated).  I began a wedding fund.  And at the time, my future hubby did the same.  When the time came, we paid any of our wedding costs we were in charge of in cash.

After we got married, we kept the car fund going to cover maintenace and car insurance.  The wedding fund, well that went away once all the wedding expenses were taken care of.

Move down the road a little bit and now we have: a vacation fund, a gift fund, savings, emergency fund, a savings for each kid (not including their own chore money and banks), house fund, along with regular checking and savings accounts (both joint and separate), 401k, retirement investments, and so on.

If you know me, you know I am a stay at home mom.  But something we decided upon when we first got married was having a checkly allowance.  Each paycheck we get a predetermined amount of money.  That becomes our own blow money.  For me, I tend to split it out into different funds based on where I have expenses that are based of my own wants.

I know, this sounds like a lot.  And you may think just using a credit card is easier.  Or we are a one income family, we have to use credit cards.  Or that all seems really difficult to set up. Or everyone has debt.  Or you can't be debt free or working towards debt free on one income or when you have a family.  And the list of thoughts and excuses goes on and on.

We have never really been much to use a credit card, but yes, in the past we have used one.  Notice I said one? not them?  We have and had only one ever.  We never racked up a high amount, we never carried over a balance.  Now, if it gets used, we already know we have the cash flow to pay it off (i.e. when we did the kitchen remodel, all went on the credit card, but got paid off right away).

We have our set funds and they get pulled automatically right after pay day to those funds.  Setting it up on auto means it gets done, stays consistent, and the money is specifically designated going forward.

We don't have credit card debt and never have.  This is a path we are planning on continuing.  Because we have things set up in place and are building on them, we know we have our emergency fund ready, as well as some savings.

As for debt?  We had my student loan when we got married, but we paid that off as quickly as we could.  We put any extra money we got from birthdays and holidays at it to pay it down and get it gone...13 years ago.  That just leaves our mortgage.

In all honesty, we are in the spot we are in because how we set things up.  We don't do things the normal way.  And have even gotten questioned, like why are you paying your student loan off so quick or how do you do it, and everything in between.

It's become common to carry loads of debt, to use a credit card instead of planning and waiting when needed, and to put way to much focus on credit scores.

But you know what?  It is possible to be debt free or mostly debt free aside from your house.  It is possible to live on one paycheck.  It is possible to use cash to pay and not use credit cards.  It is possible to plan, prepare, budget, and save too.

Start setting yourself up now to be at a point where you really want to be down the road.  Will it get uncomfortable?  Yup.  Will you have to give up some of your wants or at the very least delay them?  Of course.

What would be be in control of your finances, have more financial freedom, and less money stress?  Or debt in the thousands, stressing more, letting your expense go beyond your income?

You can do this, but you have to start, you have to set up a plan, you have to stick to it.

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