Tuesday, July 22, 2014

Lately: balancing life and becoming debt free

In case you noticed, I haven't been on top of posting monthly updates on our debt repayment lately. Partly because we haven't been making too much progress in that department and partly because we've been trying to find a new money system that works for us, figure out exactly how much income we'll have with me back working, reevaluate our expenses and make adjustments in our budget accordingly.

A few things have put a halt in the short term on our debt repayment:

1) Fluctuating income. While I'm earning a bit more money working than I was collecting maternity employment insurance, my salary is just about 10K less than what I was making at my previous job to start and most of the additional is offset by increased child care expenses with 3 kids and it being summer break as well as pension plan contributions which I didn't have previously. The pension contributions are a HUGE bonus for the long term, especially since my employer will match them. In the short term it means less money in the budget than previously. Before making any concrete changes to our budget or financial plan, we're waiting on my probation period at work to end at which time I'll also receive a small raise. This will give us some real leverage if we plan on refinancing or consolidating debt. 

2) Fluctuating expenses. I don't know whether it is being outside all day or just my new reality with 3 growing gentleman but our grocery bill has gone up exponentially in the past couple of months. Our utility bills have also been higher.

3) Unexpected expenses. I've mentioned before that we decided against having an emergency fund since we'd rather put all of our additional money to pay down our high interest debt. At the beginning of the summer our A/C motor burned out. Luckily a friend of a family member was able to come and fix it for just the cost of the part since we let him borrow our extension ladder from time to time but we'll likely have to replace the unit in the next few years. More recently, we got an even bigger blow. One side of our roof is looking particularly bad. We're hoping we can put replacement off until next spring so we can use our tax return to help with the expense but it's entirely possible we won't be able to wait until then so we're slowly trying to put aside what we can from R's overtime money. I know we could get financing if we needed to but the mere thought of taking on more debt weighs heavily. Lastly, my car is in need of a tune up and brake job which I put off earlier this year when I took my car in for servicing and ended up walking out with a $600 bill. I'm anticipating about the same expense this time around so have put about $400 aside so far (on my visa) to cover this expense.  

I've been thinking a lot lately about how our budget allocations are a reflection of our family values. There are some areas where I feel happy with the proportion spent and other categories I feel could use some re-alignment. While some of this alignment can be done in the short term, some will have longer timelines or will only become possible with an increase in income.


Amanda said...

Sometimes going slow frustrates me, but I think it makes a lot of sense in this case. Hopefully the debt repayment will fall into place once you get a better idea of what your new income and bill situation looks like.

Sarah said...

We also have forgone an emergency fund in lieu of working toward zero consumer debt (including our car loan)...but ya, those unexpected expenses hurt more when you don't have money set aside for them. It always seems that when it rains, it pours!!

Kristy said...

Amanda - Yes! Slow can be so frustrating! I'm really hoping that's the case that things will just fall into place.

Sarah - Funny thing is, for me, I think it would probably hurt equally if I had the money aside. One time we did start to build a bit of an emergency fund and then an unexpected emergency vet bill wiped it all out. It was a bit of a relief to have the money aside but felt more defeating to have it all gone after working hard to put it aside.

Mama Up! said...

Slowly but surely wins the race - isn't that what they say? I think the most important thing is to understand where you are in the journey. The mister and I paid off our non-mortgage debt and now we're in this weird place of not knowing what to do next. I'm going slow there, too. Nice to know we're all going together!

Kristy said...

Mama Up, sounds like a wonderful place to be. I can't imagine what it will feel like to only have a mortgage left. Kudos to you and your husband. You're right, knowing where you're at in the journey is half the battle!