For a while now, I've thought of myself as a *pretty* responsible person when it comes to finances. Not perfect, but doing ok.
Late night money guy
Back in school, I would drive who was then my girlfriend back to her dorm for the night and I just happened to be driving back late enough to catch this one money guy I'd never heard of, but who was talking about "Financial Peace". Boring financial talk or crazy Art Bell? Fine, I'll take the late-night money guy.
I've since discovered I'm hardly the first person to discover the talents and teachings of Dave Ramsey. I've also learned I'm not the only person to benefit from his radical idea of cutting up your credit cards, either.
Cut up the plastic
So, ok. Step one complete. No credit card debt.
I'm quite fortunate that I was in the car bored out of my skull that night to the point that I considered listening to an AM Financial Talk show, as it got the message to me at a fairly early age, right at the point that the average person begins to commit in earnest to the lifelong "Credit card-as-lifestyle" process.
It's funny. I'm guessing that it happens to everyone - where a forgettable or minor occurrence ends up being a major course-of-life altering thing in retrospect. Listening to those shows while driving home late at night joins a very elite list of those types of events.
Anyway, after a while, I decided to make a plan to pay off the credit cards and promptly cut them up. I stayed "credit-clean" for years after that.
Moving up
Fast forward through those years, and I've graduated from college, cycled through a few jobs, got married, and the like. Things were good. I was doing fairly well financially and career-wise, as was my wife, and we were easily able to put money in the bank for an emergency fund.
Now, most recently, we made the decision that we were tiring of life in a rental unit (and more accurately for me, tired of paying someone else's mortgage, and we bought a house.
Moving out
Suddenly, we're finding ourselves in a situation where it's getting harder and harder to do the right things, and for the first time in a while, we need to make some real priorities in what we do with our cash. Before, we would simply try to life frugally, and if something happened that caused us to spend more than is typical, well, we contribute less to the savings account.
That's not a possibility for us any more, as the house took over the money that we were socking away in savings every month. We're not living paycheck-to-paycheck per se, as we're contributing to retirement accounts and never carry credit card debt, but since we're treating these as mandatory, the net effect is probably only a couple dollars at the end of the month in terms of wiggle-room.
The dirty deed
So what does that mean? We're going to need to sit down and redo our budget, and then we're going to have to cut back. Next post I'll write about that process and what we find.
