I’m not a financial expert, and I don’t want this to be a financial blog. There are a lot of really great blogs out there that cover that topic, so there isn’t a need for mine to be one of them. :-) However, I have been wanting to write this post for a while. Some things we’ve learned, coming from average Joes who don’t always do everything right but not always wrong either.
The Best Things We’ve Done
1. Lived on one income. We knew before our marriage that one day our goal was for me to stay home with our children, so we have worked hard to make sure that could happen. In fact, to force ourselves not to overspend we put the second income in a completely different bank where we didn’t have much access to it. We have used that bank account to pay on our loans and it’s been nice seeing those go down! We also use that as a savings account, which is nice when unexpected expenses occur. Being used to living on one income allowed us the latitude to pursue our dreams better, like when I decided to quit working. I firmly believe more families could afford to have one parent at home full-time if they had been wiser about their financial commitments earlier in their marriage.
2. Automatic weekly transfers. We didn’t start this early enough. Right now, we have a certain amount of money each week automatically transfered to our savings account. Since we don’t live on a strict budget (yeah, yeah, I know that’s bad, yadda yadda but let’s face it – we don’t – and we’ll move on from there), we often know if we can afford things by looking on our bank account balance. This has been a great way to force us to save because we don’t see the money in our checking account. I have been amazed at how easy it’s been to save this way. I know that ideally we should be using a budget and then we wouldn’t need to do that, but this way we don’t dip into our savings category.
3. We didn’t buy into the “buy now, pay later” cycle. I was brought up never to spend my money this way. In my memory, we always bought with cash, and if we couldn’t afford it then, then we waited. I remember the first time I came across the idea of “payments”. I was looking at a DSLR camera, and the salesperson was explaining to me that I could finance it and get the camera now and only pay a certain amount each month! That was a new concept for me, and I liked it but for some reason I walked away without the camera. Two years later, with our money saved up, we went back and bought a better camera. I am glad we don’t have any consumer debt. We did finance our car and we both financed our college, but I think both are different. I know people disagree with me, but I’m satisfied with our decisions and I would do them over again (though I hope to never need a car payment again!).
4. Paid cash for our wedding. This was a tough area for me. I actually tried on two different occasions to get loans to pay for our wedding, but my lack of credit history counted against me. It was SO hard to go to friends’ weddings and see all the things they “got” (seated reception! flowers! a dress that fit!) because their parents paid for their wedding. I know, how ungrateful of me! I still have a lot of regrets about my wedding and would love to do it over again. But, I am glad we paid cash for it. Even though it wasn’t what I wanted, I am not in debt and for that I’m grateful.
5. Talked to a budget coach. This is a free ministry of Crown Ministries (go here for more information about Money Map coaches). We only met with him twice, and we didn’t agree 100% with what he said, but he really helped us get the right focus and encourage us. If nothing else, he forced us to make a budget, which we lived by strictly for… two months. :-) But, when we ever get around to making a revised budget, it’s not so scary for us to either make one or live by it. Now to stop being lazy and actually do it…
The Worst Things We’ve Done
1. Lived at our means. One thing I regret is that early on, we weren’t faithful about saving extra money. We didn’t rack up debt, but at the same time we didn’t put much into savings either. We did save our second income for loans, but we definitely could have been saving more from our first income.
2. Got in the habit of eating out. I dislike cooking, and both of us are quick to just “grab something” at a fastfood restaurant. We like Subway, and getting salads at Wendy’s, so it’s not all burgers and fries… But we still do it way too much. Now that I’m in the habit it’s hard to go the other way and cook something for dinner. Mostly, I’m just lazy which is bad. We have wasted SO much money eating out all the time instead of cooking dinner.
3. Consolidated our student loans with a “graduated payment”. When I consolidated my loans, the idea of a graduated payment appealed to me. Basically, it divides your loan payments in 3 parts. For the first part (a few years, depending on the length of your loan), you pay only the interest. Then the next part you pay about double. Then the next part, the monthly payments go up to pay off the rest of the loan. The interest rate stays the same, but the minimum payments are changing. The idea is that as your salary goes up, you’ll be able to better afford the payments. My thought was that I’d do the minimum and then I would pay extra. Yeah, I never paid extra. Now I’m panicking because in a year or two my minimum payment is going to double. I wish I had just done the straight payment across the board (or been faithful about paying extra), so I wouldn’t have to worry now.
4. Didn’t think through our priorities. We have lived each day for itself, content that we weren’t getting ourselves in more debt, and buying things as we needed and wanted. However, we didn’t ever sit down to think through what we wanted in the future that would cost us money. I think if we had done that we would have we would have been more likely to put aside money for a house (which is an expensive!) instead of all the little stuff that quickly adds up! It’s just good to know where you want to go, in general, and decide for yourself where your priorities and timetable with that are.
5. Bought into the materialistic lifestyle. This one is easy to do, and hard to break the habit. Shortly after we were married, we moved into a huge two-bedroom townhouse. I’m not saying I regret that, but now I’m wondering if it would have been better to stay in a small apartment in order to keep our lives simpler. Living in this small space now definitely keeps me in check about buying “stuff”! I look at my life and all my junk and the things I think are “necessary” to buy and I get disgusted about myself. What a change from my life growing up! I’d love to return to my attitude prior to age 18, but I know it’s really hard to go backwards. It’s a goal though and I’m working on it!
What are the best and worst financial things you’ve done?