Archive for March, 2009:
Little blog break
My mom and grandma are on their way over to visit for a few days! If my blog is quiet for awhile, that’s why. kbye
Car loan change of plans — again
Are y’all sick of hearing about my car loan? I’m sick of having it. I’ve blogged about how we’re sending extra money to the principal, so that we can have it paid off as soon as possible.
Change of plans!
My husband’s company is laying off 2,500 people worldwide. Crud.
Though we have a six-month emergency fund, that’s starting to feel like potentially not enough in the event of a layoff. It might make more sense to send extra money to savings, just in case we need it.
Once we have enough money to pay off the car in full, we can do it then or we can hold on to our savings and continue to make payments. It’s all about the cash flow right now.
What will this mean for our bottom line?
- If we make no additional payments on our car ever, we will have it paid off in December 2010, which is one year early. We will owe $370 in interest between now and then.
- Paying it off in full in December 2009 is $258 in total interest remaining, a difference of $112.
- Paying it off in full in June 2009 (a big stretch, but it was a goal of mine) would be $120 in interest paid.
When I look at interest alone, $370 max isn’t that much in the grand scheme of things. Sure, it’s money that I’d rather not pay, but if the alternative is having an extra 2 to 3 months of emergency fund saved, I think I’d rather take that option until things start to improve.
I still want to be on the path of getting out of debt, and I still want to be held accountable for it. I’m going to update my debt ticker in my left sidebar to reflect the balance remaining (plus the 1% fee we’ll be charged for paying it off early, so $115) and the amount in savings earmarked for the car, should we want to send the funds there.
Are you focusing on building up savings instead of reducing debt right now? Or are you working on both?
Budgeting gave me the permission to spend
Sometimes, I really hate spending money. Most of the time, I’d rather save it or use it to pay down debt. So maybe that’s why my wardrobe has gotten to a really sorry state — I just couldn’t stand to spend any money to improve it. Oh, and I usually dislike clothes shopping, so that’s another reason.
I was depriving myself of things that I needed, and for no good reason.
After having Jonathan, none of my old jeans fit well. I didn’t have many good tops or a decent pair of casual shoes, either. I certainly didn’t want to be a frumpy mom, so I figured it was time to go shopping already.
I looked at our budget and crunched some numbers, and felt comfortable setting aside a chunk of change to improve my look.
After identifying some gaps in my wardrobe, I made a list of specific things I was seeking.
Then, I went shopping. I went to a thrift store, Target, the mall, and spent some serious time online browsing various stores.
And you know what? I was totally fine with spending that money.
The money was budgeted for this specific purpose, and I no longer felt bad about buying things for myself. I didn’t say, “Oh, just work with what you have and send that money toward paying off your car.” (Of course, if we were in a dire financial situation, I wouldn’t buy new clothes. But we’re ok right now).
In essence, setting aside money for new clothes gave me the permission to spend without feeling guilty.
I didn’t just hit up the clearance racks, either. I shopped for things that fit well, looked good, and made me happy. I even paid full price for a few items. For the most part, though, I found some pretty good sales and combined them with coupons or used Ebates or Cashbaq (referral links) to make my dollars go further.
In a way, it felt good to spend the money. It felt good to take care of my own needs. It felt good to not use credit. And it feels good to wear pants that don’t give you a muffin top!
You’re welcome, economy.
