Monday, July 13, 2009

Can we live on one income?

When I started this blog I wanted to get a handle on our finances. I wanted us to be able to do whatever we chose when we had kids. I wanted to not worry about debt.

Since starting the blog I:
  • know how much we spend each month
  • have annualized our irregular bills
  • learned how to cut spending (in certain areas)
  • have started a starter Efund
  • have met some of our savings/debt goals

Along the way I've challenged our financial set up. A few weeks ago I decided it was time for another shake up. Starting in August we're going to use his checks to pay for everything. I should say pay for everything first. At the end of the month I'll track how much of my check was necessary.

This will do a few things. First, knowing how close (or how far short) his salary comes across time will give us a better idea of what we can afford to do when it's time to make changes. I also think seeing how far his salary goes will give my (commission based) husband a boost despite some other work issues. Finally, it's more reassuring to know how close we are, not just thinking it should work out.

So the latest revision of our money plan goes as follows:
  • His take home household money* goes to pay the bills first
  • My take home household money will hang out in our brick and mortar (b/m) savings for the rest of the month
  • Funds will be transferred from savings to checking where his check falls short
  • At the end of the month whatever is left in the b/m savings will head to ING to increase our Efund
  • Anything left in b/m checking will go to another ING account to balance out his low months. (I'm still thinking through the details)
Our debt snowball (my prior car payment + his current car payment) will continue. I've written the extra $325 into our monthly spending. But instead of sending any extra money to the car, it will be headed to our Efund. We've decided that even though we have some debt, we'd feel more secure with a larger Efund. Strictly looking at numbers (getting charged 4.15% vs earning 1.3%) this is not a great choice. Emotionally, it's a different story. So we're going to do what will make us feel secure.

The only other thing we have outstanding is the Lowes card. I paid half of what we owed last month in advance of the July due date. In the next few weeks it will be knocked out, so I didn't work it into the overall plan.

*this is 80% of his take home check

1 comment:

moneymonk said...

It's good u guys are paying attention to your money, however, why don't you just pay off the Lowe's card with savings?