Sense to Save

No, we’re not debt-free

Paula has a question for me, but before I get to that, I want to emphasize that this is about our personal finance. Our situation is based on the decisions we’ve made and the blessings we’ve received. What works (or doesn’t work) for us might be entirely different from you.

I am curious. In all my reading of your blog, I have never read of you being in debt. Are you debt free? If not, I am curious why you would put so much into savings. I am also curious if you put anything towards you or hubby’s Roth IRA. I know Dave [Ramsey] says to accumulate [an emergency] fund before investing, but I also know on one of the blogs you read, he mentioned how they build up ER fund AND invest at the same time (which is what we are doing as soon as we pay off the rest of this debt).

Our debt situation

We are not debt-free. We have a $277/month car payment. If we don’t pay extra on it, then we’ll be making payments on it until the end of 2011, as we took out a four-year loan on the car.

Other than that, we don’t have credit card debt, student loans, personal loans, or a mortgage.

However, we have had credit card debt in the past. I’ve mentioned some of the dumber things we’ve done (including charging our honeymoon on credit cards!). Because of the decisions we made, we didn’t have much money in savings right after our wedding, when we moved to Pittsburgh and started new jobs last June.

My husband gets paid monthly, so for that month before his first check, we were living off our credit cards–charging groceries and gas and more.

My husband’s employer reimbursed us for relocation expenses and our apartment-finding trip, but, the key word was “reimbursement.” We had no choice but to charge those expenses at first, since we didn’t have money in savings. Now, Shane has a company credit card that he uses on business trips, so we don’t have to worry about reimbursement checks anymore.

Last summer, we were looking at a few thousand worth of credit card debt. It was ridiculous. Read more »

Plan ahead for out-of-town weddings

M has two wedding-related questions for me. I’ll answer the first now, and the second one about wedding gifts in an upcoming post:

Do any of you budget for future weddings (friends’ weddings, not your own)? I’m specifically thinking about ones that will require air travel, hotel, etc. Any tips are appreciated.

Thanks for your questions! I’ll do my best to answer them, and I hope readers will add their own ideas in the comments section.

Not many of my friends or family members are getting married in the near future. The last wedding I attended (that wasn’t my own) was in December 2006. The next one for us is in May (in Florida!), and as of now, that’s the last one we’ll be attending for some time, as far as I can tell.

I’ve written about my Florida trip plans (see links below), and while it’s looking to be cheaper than I first thought, it’s still going to be quite expensive for us. In fact, it’s probably going to be around 1/3 of the cost of our own wedding!

I think in a few years, more of my friends will be getting married, so it’s a good idea to plan ahead for those happy times so they won’t have a negative effect on our budget. Once our emergency fund is completed, we’ll start a separate savings sub-account, where we can earmark money for gifts in general, and also wedding travel.

I don’t know how much we’ll put in the general gifts/wedding travel fund just yet, but I’m guessing it’ll be somewhere around $25-50 per month or so until we’re up to about $1,000. Since we don’t have single/engaged friends in Pittsburgh, we’ll have to travel to the next wedding we attend–whenever that is. Dunno for sure on that, though.

If you sense that you’ll be attending some weddings in the future, it’s a good idea to start saving. How much should you sock away? Consider some costs of standard items I’ve listed below. There’s lots of room to be frugal here, of course.

And, if you know you’ll need to travel to attend someone’s wedding, the sooner you can start planning, the better it will be on your budget.

Costs many wedding guests can expect Read more »

End-of-March update and goals for April

At the beginning of March, my husband and I laid out a few goals for the month. Here’s a recap, and how it went for us:

Use credit cards for gas only. We ended up not using our credit cards at all, and put gas on our debit cards instead, since there was no “hold” on our cards. This is the first time we haven’t used our credit cards um…probably since we first got them a few years ago. I do think we spent less than normally, and I don’t plan to use our credit cards again for the foreseeable future.

Determine how much money we will truly need in our emergency fund. We originally thought it would be about $10,800 for six months worth of expenses, and for now, that’s still going to be the goal number. Of course, we’ll have to revisit that number from time to time, as our rent,car things, and insurance expenses change.

Using our ING account more. We haven’t made the switch to using it as our primary bank, and I’m not sure if we’re going to do that now. Our emergency fund is there, but we’re still using our brick and mortar bank to pay most bills and for our checking account. (By the way, if you’re interested in opening an ING account, please let me know! When your first deposit is $250, you get $25 and I get $10).

We were saving for a new laptop, but now we won’t need to. Shane fixed it quite cheaply, hooray!

I’m pleased with our progress for March. We put $861into our emergency fund. Also, we had accumulated $342 in snowflakes in March.

Goals for April

• Find new sources of snowflakes, and try to accumulate at least $250 in extra money to put toward savings
• Put at least $1,000 into emergency savings this month
• Don’t use credit cards at all

That’s all I can think of for now. Three cheers for the almost-arrival of April!

(Photo credit: John Doyle, who submitted this photo to the BBC)