Wednesday, May 28, 2014

Regrouping after the last year of monumental changes

This past year has been one of monumental changes (the babies, the move, S becoming a stay at home parent and trying to restart his business, the major unexpected expenses that have cropped up along the way) coupled with some extremely sad events including the passing of my uncle, S's uncle, and our beloved pup.  I'm not going to lie, I made some costly mistakes and have also caught myself resuming some of my past bad financial behaviors, especially during the move and transition to living in Kentucky.  But I can't dwell on those things I can't go back and change, and in retrospect, we have really dealt with a lot in the past year and mostly handled the finances well.

Since the move we have been scrambling to adjust to our new one income situation.  We've finally stopped the hemorrhaging of money that was rapidly increasing our debt and I feel like we've come up with a workable budget that will prevent us from accumulating any more debt this year.  My full time job income covers all of our regular monthly expenses which are:

Mandatory expenses (everything we absolutely must have):
  • Housing expenses: rent, renter’s insurance, utilities including our phones
  • Groceries and household expenses: food, toiletries, diapers, pet food
  • Cars: insurance and fuel
  • Health and Life Insurances
  • Debt: Student loans, credit cards and medical debts

Plus the following somewhat optional expenses (we could live without these in a pinch but it would be unwise/ difficult for us):
  • Emergency savings- this one is not really optional
  • Fun Fund money for the occasional lunch/ dinner out, beer, haircuts, clothes, or whatever (sometimes used for unexpected bills but mostly just to cover the extra "wants" we have)
  • Internet and Netflix- we could live without internet but it would be extremely hard to run our businesses which are mostly web based… and Netflix is a very inexpensive form of entertainment
  • YMCA membership- we could live without this one but it provides S a break in the day with the babies and supports a healthier lifestyle for us so we're sticking with it
My full time salary does NOT cover the one time expenses (my professional membership fees, some medical expenses we are expecting to have for the boys, etc) or anything beyond the minimum debt payments.  There are some additional sources of income I'm expecting this year including a end of year bonus, some reimbursements from taxes/ insurance paid in Massachusetts, and the sale of baby items which will hopefully cover the one-time expenses.  Plus my side businesses on Etsy are becoming more and more stable and bringing in a little extra cash each month.  S hopes to have his business up and running by the end of the year but may end up getting a small part time job to bring in a little cash and also get some adult socialization time.

In short, our plan for the rest of 2014 is to hold steady on our monthly expenses living off of my full time salary and whatever we can hustle up each month will go to savings to cover one time expenses and extra debt payments.  I can't say I'm feeling great that the debt reduction has taken such a backseat to just getting the bills paid but I do feel better than I have in months about where our finances stand.