Financial Shape in 2008 August Update

It’s time for another financial check-up. For those of you who are new readers we read and followed Dave Ramsey’s book The Total Money Makeover: A Proven Plan for Financial Fitness. We called Dave on October 26, 2007 and screamed we’re debt free on the radio. Since then we have also completed baby step 3.

Confession time, we have gone two months without a budget. This is not a good thing. While we have not gone into debt, or depleted our savings we have not saved like we could and should. August brings a fresh start and a new budget. We are back to cash only for everyday expenses and the grocery budget has been trimmed to $600 this month.

Our financial goals have taken a bit of a detour since we started this financial fitness plan. We found out recently that our van needs about $2000 worth of repairs. We have been sinking money into this vehicle for a while and since it isn’t even worth $2000 we have decided to work towards replacing our van rather than repairing it. We would like to purchase something smaller that will be easier to drive and park in this big metropolis that we live in.

One of the great things about having no debt is that we should be able to save for a new (to us) car fairly quickly. We will have to set aside some other savings goals, since we would like to replace the van sooner rather than later, but once we finished saving for the car we should be able to get back on track with our financial plan.

Financial Goals for 2008

Fully Fund Emergency Fund by 2/1/08
Completed on 1/31/08 YIPEE!!!!!

Blessing Others -
10% of our income goes directly into the giving category. We have also had the opportunity to give extra each month, either with money or needed items.

Fully Fund Orthodontics for Oldest- Completed and paid for the braces in March in CASH!!!! We currently have $900 saved for the next child, so we are on track for another set of braces in a few years. Last month I thought we would put this on hold while we saved for a car, but a trip to the dentist helped me to realize we need to keep saving aggressively for the next child.

Begin saving 10% of income into Roth IRA’s and TSP- My IRA was fully funded in June. My husband’s IRA has been put on hold until we purchase another vehicle.

Begin College Funding for Kids-
We are going with a 529, this is being funded, but once we purchase a car we will increase the amount we invest every month.

Begin aggressive savings for house and car-
We have about $2000 in our car savings which would not replace a car for us at the moment. We have not researched things completely, but think we need about $5000 or $6000 for a decent used car. Our goal is to have this amount by the end of September. I think we are on track for this, but it might be early October. Our house savings has been put on hold as it looks like my husband will stay in the military a while longer, so purchasing a house is not a priority at this time.

Funding all of our expenses for the year- We are still on track for funding our expenses. We will cut back a little until the car fund is completed. We have cut back on a few splurges in order to save for the car.

Vacation Funding -
The kids are chomping at the bit to take a Disney vacation. Although this is not my first choice we are saving money every month, plus all of our change, in order to go to Disney sometime in 2009. Still on track for this one, vacation planned for January 2009.

Cutting Our Expenses- We will be examining our budget to see what areas we can trim to help increase our car fund. We have cut some splurge areas in order to increase car savings.

Groceries- Last month I went over the grocery budget by about $50. I am sure this was because we were not using a cash budget. Two debit cards made for overspending and also difficulty in tracking the purchases.

Clothing - We have been continually blessed with beautiful hand-me-downs. I hit the thrift store this week to pick up some athletic clothes for the upcoming soccer season. Almost everything I purchased was 1/2 off so I was able to buy several pairs of shorts for the boys for under $2 each. I know it would be cheaper to hit yard sales, but since I don’t know the area and gas is high it was a better deal to shop the thrift store.

Gifts –
I have decided that I am okay with the amount in this category every month. We love to be able to give gifts and if we can afford it, I want to continue.

Finding extra sources of income- No ideas as of yet…

Tax Rebate-Here is what we did with our tax rebate. We finished funding my Roth IRA, used some for homeschool materials, padded our savings account, bought a computer and a sewing machine.

Can I say again how great it is to be DEBT FREE!

For those of you who are working towards this goal… you can do it! The sacrifices can be great but it is worth it in the end.

Check out Money Saving Mom for more financial check-ups.