Priorities

One year ago we called Dave Ramsey and screamed “WE’RE DEBT FREE!” on the radio. It was a wonderful moment and I would encourage anyone who pays off their debt to call his show and do the same.

Once we became debt free and built up our emergency fund we realized we had a some extra money every month. (We aren’t rich, but when you aren’t making any payments the paychecks stretch a lot further). This year has been interesting as we have tried to figure out how to best use our extra money. We needed to decide what was a priority for our family, once we had our priorities in order we could tell our money where to go.

For our family the priorities are pretty simple;

#1 priority is giving back part of what has been given to us. We give to church as well as other organizations. We also have money set aside to help others directly who might be in need.

#2 priority is saving for retirement and a house. We don’t know when we will purchase a house (probably not anytime soon) and retirement is a ways off but the earlier you start saving the less you have to save in the long run.

After these two priorities budgeting became a little more difficult. There are things that we could afford that we choose not to have, like cable television or new vehicles. There are other things that we don’t need, but we choose to purchase, for example we have five computers (they are not new) in our home. We struggled with trying to figure out the best use for our leftover money. I realized that because we didn’t have a specific plan, our money could easily disappear, spent on things that were not really important to us like fast food or impulse purchases.

After some thought I realized we do have other smaller priorities in our home. These areas received a budget boost once we were debt free.

Groceries: While I realize I could feed my family for $400-500 a month it takes more time and effort than I am willing to give at this stage in my life. I am thankful that I have the knowledge to be able to cut back if necessary. With our extra grocery money I am able to purchase more organic and natural foods and experiment with some foods that I would not have tried when we were on a tight budget.

Homeschooling materials: While I am frugal in many areas, homeschooling is not one of them. We try to keep a large homeschool budget so I can purchase the absolute best curriculum for my family. (remember I said best for my family, not the best) This year I was able to purchase two of our children the Teaching Textbook’s Math program. While this program is not cheap, it is lowers my homeschooling stress level by 100%.

Weekend trips with my family: Our family loves to take mini vacations. Usually we don’t spend a lot of money on these trips but gas and convenience meals do add up. We are able to go out of town more frequently because we are cutting back in other areas.

Because our budget is higher in these three categories, we spend less money in other areas. We don’t have cable and get all of our books and movies from the library. We purchase the majority of our clothes at yard sales and thrift stores. I cut my husband and sons’ hair most of the time. My husband takes his lunch to work. We don’t eat out frequently and we never order pizza. We spend very little time shopping. I went to Target to pick up some camping supplies and realized I hadn’t been to Target in 2 months! We are selective in choosing our children’s extra curricular activities and don’t participate in ones that are a constant drain on our finances.

In order to stay on track financially there has to be a balance in your life. If you want to spend a little extra in one area, there is probably another area that will have to be trimmed. If you don’t find a financial balance in your home, you will find it somewhere else, at the top of your credit card bill.

As I look back on 2008 I see areas that we could have improved on (saving more money) and areas that I think we did well on (paying cash for everything and incurring no debt). I can’t wait to plan out 2009 and create new financial goals.

As for 2008 we met the following goals:

• Fully Funded Emergency Fund
• Fully Funded IRA
• Paid Cash for Braces
• Savings account fully funded for yearly expenses

#1 priority for 2009, a new (to us) vehicle that will seat all our kids plus the new baby!

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