I'm really not sure how people do it. How are those financially savvy people able to put money away in one million different places? I feel like I'm supposed to have a just-in-case fund for cars, health, and household appliances, on top of the equally as necessary college fund, retirement fund, vacation fund, and savings fund.
We do not have any of these! Well, not really. The one good thing I feel like we have is a tax-sheltered annuity inside of our life insurance policy. Don't ask me what this means because I don't even know that! I just have heard it can be a good thing to have.
We are definitely going to have to start a college fund for the offspring ASAP. Oh, and add a braces fund to that!
And what if you ever want to remodel your home? Or buy a new mattress? Not gonna happen for us. Almost every dollar of our checks is spoken for, and what's not goes to gas and groceries. Oy.
So what this means for us is that when the car needs something major done, or crazy neighbors come a-knockin' for mula, or Eric has to go to the ER with a stupid high fever, then we start accruing even more monthly bills and debt. Darn you, vicious cycle!!
Please comment if you have tips!
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I totally know that you mean by this! Josh and I are still trying to figure it out as we go along. Here are some things that have helped us:
ReplyDelete1. Budget
put together a budget every month of all of your incoming funds, as well as out going. If it's coming up as a deficit, figure out which items you can cut out to make some breathing room.
2. Savings
you definitely need to start saving, even if it's just one fund. If your budget works out that you have money left over every month, put half of it into savings - even if it's just putting $20 away (I've been there, but it helps to build the habit of doing it every month). And this is a very important step - Never take money out of it, unless A. It's an emergency and B. You intend to put in back in at some point. This is something that I have to remind Josh of quite often. There's no sense in having a savings account if you deplete in every month.
3. Retirement
Start thinking about opening a retirement fund. As teachers a lot of companies will give you discounts (TIAACref for example). Also, ask your secretary / treasurer if an IRA fund is available. I don't know about schools, but a lot of companies will match what you put into it, so instead of having to put in 13% of your paycheck, you'll only need to put in 6.5%, so it's worth asking.
I hope that this was helpful and didn't come across as preachy - it was not meant to be preachy. If you'd like help with anything let me know and if you have questions feel free to email me!
I love this post, mainly because it reminds me of us PERFECTLY :)
ReplyDeletePhil's Chevy is out of commission for the time being (something wrong with the ignition, guess who can't afford to get it fixed?) and last night my little KIA that I just bought's battery died. I about had a panic attack. How are we going to get around? We can barely function with one car! Luckily our friend was right there to jump it. Phew! We sat down when we got home and laid out the next seven months. Sometimes you need a near catastrophe to get the ball rolling.
Manda's post is right on the money (no pun intended, hehe). Our plan is to put all money he makes teaching lessons into savings. The next seven months are devoted to "recovery". We have a lot of ground to make up on our loans, etc. But a retirement plan is definitely in the works as well. Can you believe we are at that age already? AH! I bet it's even worse thinking about BRACES and COLLEGE FUNDS.
In all seriousness, you will never be that textbook money savvy person, because nobody is! Make a realistic initial goal (start a rainy day fun, put 10 bucks in a week, something like that). Baby steps :) LOVE YOU!