Wednesday, October 22, 2008

Budget Meeting - Oh my!

Six months ago my husband asked me when I'd like to get together and have a "budget meeting". You can guess what my response was... "Say what?! Are we a corporation now?". That's not what I said out loud, of course. Or maybe it was. I don't remember. Anyway, I was quick to agree when he told me that he would take me out to lunch once a month to a place of my choosing. In fact, my hesitation instantly evaporated. 

Curious as to why we were suddenly having formal meetings to plan our spending, I decided to check out the book that kicked it all off: The Total Money Makeover by Dave Ramsey. In less than a day I finished it, and my eyes were opened. How could we have been so blind about our personal finances? We had used budgets before, and neither of us would even remotely be considered big spenders. For the first few years of our marriage we had been entirely debt free without really thinking about it. It was just natural to pay off our credit cards every month. Somehow, when we moved to our current home, we started carrying a balance here and a balance there, until we took stock last April and realized things had gotten out of control. By normal standards, we were doing fine -- we had a nice house, a nice car, and we could make all of our payments every month. We could make all of our payments every month?! What kind of standard is that?? Ridiculous. 

Since that fateful day last spring, when we wholeheartedly accepted the idea that we should tell our money where to go (and we didn't want all of it to keep going to Bank of America or AmEx or Citibank or Wachovia...), we've met on the 25th of each month to write a monthly cash flow plan. We sold the car that we had purchased on the grounds that we could afford the monthly payments (regardless of the total price tag), even though we were considerably "upside down" on it, and scraped together the cash for a 1992 Subaru wagon with 200,000 miles on it. We will never get another car loan. I'm giddy at the thought that in 6 months we've kept faithfully to our budget, and when emergencies arose we could use our "emergency fund" to take care of it. So far, we've paid off over $16,000 in debt. We bring home $3000/month. We have a long way to go, but we're excited about living like no one else today, so later we can live like no one else. And I don't mean just having nice, fancy things. Neither of us really cares much about that. But we'll be able to make decisions for our family without worrying about whether or not we can pay our creditors or afford food. Just think of the good we can do with the money that's currently going towards debt! 

An unanticipated side effect of getting our rears in gear financially is that our marriage is stronger than ever. We have a goal we can work towards together, and there are no fights, regrets, secrets, or fears about money in our house. Read that last line again. When I pull cash out of one of my marked envelopes to pay for something, I know it's okay to spend the money. That's what it's been designated for. We have enough. 

Oh, and lunch is good too.

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