Category Archives: Money

Is college worth it?

Lately, there have been tons of headlines touting the idea that rising unemployment, high tuition costs, and overcrowding in the post-college job market have made college degrees a poor value. Proponents of this theory believe that other career tracks — such as internships and entry-level positions that don’t require a degree — may be a smarter idea to get students into the work force faster without spending thousands of dollars.

I think this Time article does a pretty good job of dispelling this theory:

According to the Bureau of Labor Statistics, in 2010, the median weekly earnings for someone with some college but no degree were $712, compared to $1038 for a college graduate. That’s almost $17,000 over the course of a year and there is an even bigger divide for those with less education. College graduates are also more likely to be in jobs with better benefits, further widening the divide. Meanwhile, in 2010, the unemployment rate was 9.2 percent for those with only some college and more than 10 percent for those with just a high school degree, but it was 5.4 percent for college graduates. The economic gaps between college completers and those with less education are getting larger, too.

These statistics paint a pretty obvious picture. It appears that college graduates are not only less likely to face unemployment, but their salaries are thousands of dollars higher than non-college grads.

That doesn’t mean I don’t acknowledge that there’s a problem, though. As someone who personally made the foolish choice to unnecessarily borrow thousands for a college degree, I think college debt is a serious problem in this country.

That doesn’t mean I regret my decision to go to college. My college education opened doors for me. Not only did I learn valuable skills during my time at college, but I was able to find a job afterward that taught me even more valuable skills — and allowed me to support my husband and me while he earned a master’s degree, which is what allows him to pay our bills now. Do I regret the debt, though? You betcha.

You could argue that a college degree isn’t required for my freelance income. However, it’s unlikely I’d have the skills necessary to earn my freelance income without my degree and previous work experience. Not to mention, I don’t plan to be a stay-at-home mom indefinitely. When my youngest child starts school, I’ll be back in the job market. Depending on how many children we have, it could be a while, but I’m glad I won’t be starting college at that point like my mom did.

I think the question of whether college is “worth it” is silly. The more important question is whether college debt is “worth it.” And to me, the answer is no. The debt isn’t worth living beyond your means as a college student.

Skipping college isn’t the answer. The answer is skipping college debt (or at least as much of it as you can). Attend a state school or community college for all or part of your education. Apply for grants and scholarships. Work as much as you possibly can. Live frugally. Do not use student loans to subsidize your beer and pizza fund or buy expensive gadgets or a car you can’t afford. Work full time and attend school part time for longer than four years.

I’m not naive enough to claim that graduating with no debt is an option for everyone. I acknowledge that middle class students without a college nest egg often have limited options. As someone who attended a state school, worked two jobs in college, received financial help from parents, and still didn’t have enough to pay for tuition and living expenses, I understand that avoiding all debt may not be possible if you want to graduate in under a decade. But the point is to borrow as little as you possibly can — and the ideal is to borrow none.

If you’re a graduating senior, please trust me when I tell you — your first job will not pay you enough to make those student loans payments easy. But don’t feel discouraged enough to skip college all together. An education is absolutely worth the hard work required to pay for it — the debt, however, is not.

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The real cost of buying a home

If you’re planning to buy a house in the near future, then I’m sure you’ve heard this from a million people already, but I’ll tell you again: it ain’t cheap.

So what does it really cost? Well, you’re probably already saving 5-20% of your purchase price for a down payment and 1-3% for your closing costs. That’s not a small chunk of change. Unfortunately, that’s not all you’re going to need to save. Here are a few of the costs we encountered on our little home buying adventure.

Emergency fund

Up until now, you’ve probably had a landlord. If your heater stops working, you call the landlord, and they send someone to fix it on their dime. Roof leak? Call the landlord. Broken refrigerator? Call the landlord. Now that you’re a homeowner, the landlord is you. Don’t plan on spending every last cent of your savings account to move into your home. As a homeowner, access to an adequate emergency fund is more important than ever. Negotiating a home warranty into your purchase can relieve some of this responsibility for a year or so, but it won’t cover everything. Make sure you have some cash on hand to avoid getting in over your head.

Appliances – $500 and up. The sky is the limit if you want to get fancy Food Network appliances!

These days, the housing market is full of foreclosure properties. Sure, you can get a great house for a low price, but often these homes don’t include appliances like a stove, refrigerator, dishwasher, washer or dryer. Sometimes if you’re buying from a seller instead of a bank, some or all of the kitchen appliances will be included. Sometimes they’re not. We saw several houses that didn’t include some or all of the appliances. In our case, we were lucky to buy a house with a stove and dishwasher. We already own our washer and dryer (bartered from a friend in North Carolina in exchange for moving help). But our home did not include a refrigerator, so we had to purchase one.

Sometimes a good deal can be found at secondhand or consignment shops. However, you are taking a risk that the appliance bought will be missing one or more vital parts. Luckily, no matter what brand — Kenmore, Electrolux, General Electric, Jenn-Air, KitchenAid, and others — it’s usually possible to find replacement parts inexpensively. You may even be able to get an old refrigerator running like new for only a few dollars.

Lawnmower – $200 – $5000

If you’re moving into your first home after living in apartments, you’ve never experienced the joy of yard maintenance. Now instead of cursing the landscapers for kicking up pollen and noisily mowing away outside a few times a month, that will be your job. We have almost an acre of land that’s quickly growing out of control, so we’ll have to buy a mower before we move in.

Window coverings – $200 and up

Some homeowners will leave things like blinds, curtains, or other window coverings that were custom-made for the home. Often they don’t. Because our house was recently remodeled and new windows were installed, there’s nothing covering them. Unless we want to give our neighbors a peep show, we’ve got to invest in some blinds. As much as I love our dramatic, custom windows, I learned the hard way that fancy windows are more expensive to cover. We had to order custom-cut blinds to fit our unique window sizes. If your windows are standard size, mini blinds can be a cheap option to cover your windows until you can save up for something fancier.

Propane – $500 – $1000 depending on the tank size

I’m a city girl, and I assumed that everyone in the world has access to a natural gas line in their homes, and they just receive a heating bill every month. Not so. If you’re moving into a house in the country, you may have a giant propane tank next to your house that needs to be filled. Rates are lower in the summer when demand is lower, and in our case, the first fill has to be paid upfront. After that we can get on a monthly “budget” plan to build a credit and cover the next fill-up.

Optional costs – Prices will vary.


If you hate the colors the previous owner chose or the paint needs a touch-up, be prepared to invest some money and elbow grease into repainting. Our house was completely repainted as part of the remodel. They’re not the colors I would have chosen, but it’s fresh paint and I don’t hate the colors, so we chose to leave the walls as they are for at least a year or two.


If you don’t repaint — or you choose a color much different from your previous home — you may discover that the decorations you bring no longer match your decor. You can always choose to add decorations a little at a time to reduce the upfront cost. If you don’t have the money to decorate right away, be prepared to live with bare walls for a little while.


The square footage of our new home is almost double that of our apartment. When you suddenly gain that much extra space, you realize just how much furniture it will take to fill it. We’ll have to live with an empty den for a while until we can find a nice used sofa or save enough to upgrade our living room furniture and move the old stuff into the den.

Thankfully, we’ve been saving for the past 5 years, so even though we underestimated the amount of cash we’d need to buy our house, we can afford the extra costs. Be sure you count on some extra costs if you’re planning to buy a home.

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Why I’d rather spend less than earn more

This post was originally published on May 13, 2009. Now that I’m a stay-at-home mom, this post is truer than ever for me. I needed a reminder of why my priority will always be finding ways to cut our spending instead of increasing our income. I thought I’d share it with you, too.

When you’re working to save money or get out of debt, there are two main ways to do it: spend less and earn more. When you’re struggling to make ends meet, the solution is to cut your spending or find a way to increase your income or some balance of both.

I’ve always favored the spend less approach on my blog and in my life. I’m not a big fan of Dave Ramsey’s advice to go to extreme measures to increase your income. I’d rather work hard to cut spending than pick up a second job or extra hours to increase our income. Here’s why:

My time is worth more than money.

If we took on night jobs or weekend jobs, we could speed up our debt repayment and savings. But at what cost? We’d lose our only real quality time together, our only time to relax and recharge. As I said yesterday, frugality is about improving my quality of life. Working nonstop isn’t what I think about when I think about my best life.

Being short on time can cost money.

When you’re constantly rushing around, you’re more likely to cling to convenience. From picking up take out at the end of a night shift to paying more in childcare to cover your long hours to skipping money-saving habits like menu planning and coupon clipping because you don’t have time, rushing around can get expensive.

Higher income leads to more spending.

Obviously, the point of frugality is to avoid increasing expenses as income increases. But the harder you’re working to bring in that extra income, the harder it can be to tell yourself, “No.”

Even if you can avoid spending money on unnecessary things, there are some natural upgrades that come along with a better income: home ownership, vacations, little luxuries. If you put more of your focus on earning than saving, it’s likely that those little upgrades will add up to a lot of extra spending. By focusing on saving instead of earning, we’re living comfortably without being tempted to splurge to much. As our income naturally increases and we continue to spend less than we make, we’ll find a way to fit these upgrades into our budget.

What about you? Would you rather spend less or earn more?

First steps for first-time homebuyers

After the dust had settled from our move to southern Indiana in January, I dramatically said I was never moving again. “My grandchildren will visit me in this apartment!” I said.

The truth is, I was just sick of packing up and moving after doing it 3 times in 9 months. Now that we’ve had a chance to settle down and get to know our new area, I’m starting to feel the house hunting itch again.

Obviously, when it comes to homebuying, the more cash you have on hand, the better. Our original plan to stay in this apartment for two years would allow us to amass a larger down payment — possibly even 20%. On the other hand, interest rates are starting to creep up again as the economy rebounds. Buying sooner rather than later would allow us to lock in a sub-5% interest rate for the life of our mortgage, which could net us big money in the long run. There are also many bank-owned houses on the market right now selling for far cheaper than they’re worth.

Even without a full 20% down payment, we could easily find a really nice house and end up paying less per month than rent.

I’ve said before, though, that alone is not a good reason to buy a house. Just because your mortgage could be lower than your rent doesn’t mean you should buy. We’ve been happy renters for the past few years for a number of reasons. Now that we’re ready to settle down in this area for the next 5-10 years (at least), we’re ready to consider buying a home. The question is whether it will be in 2012 or 2013.

We have another 9 months left on our current lease, so I’m preparing now to begin the process. Here are the first steps we’re taking:

Learn about the costs of homebuying, and save save save!

I’ve spent a lot of time learning about the homebuying process to determine the real cost of buying a house. First-time homebuyers often qualify for FHA loans with attractive interest rates and a paltry minimum down payment of 3.5%. Even conventional loans only require a 5% down payment. It can be easy to assume that all you need to buy a home is a good credit score and a few thousand dollars. Not true.

There are a ton of additional costs, including closing costs (which can range from $1,000-$5,000 or more), points if you want to lower your interest rate, inspection fees, and other miscellaneous costs. A good rule of thumb is to assume you’ll need at least $5,000 in addition to your down payment to close the deal. This guide to homebuying taught me a lot about the associated costs and process in really simple language.

Obtain your credit reports and credit scores to clean up errors and fix problems.

We already use Credit Karma to monitor our credit scores throughout the year (it’s free, but not 100% accurate, so we’ll probably end up paying for credit scores from one of the credit reporting agencies). We also check our credit reports every year using You’re entitled to a free copy of your credit report once each calendar year. Our scores are both in the mid-700s, and everything looks as it should on our credit reports, so we shouldn’t have any problems there.

Get prequalified for a loan to determine a realistic price range.

Some people recommend that this step come later, but I think it’s important to do it in the early stages. You need to know what you can afford right now with your current salary and cash on hand. Once you’ve got a range, you can do some preliminary price checking. If it doesn’t look like you can afford the type of house you want, it’s best to wait and save for a higher down payment.

Don’t settle for a cheaper house just because you can afford it now! Buying a house is one of the biggest commitments you will make (especially in this market). It’s better to wait and get what you really want than be unhappy in a house you don’t love just for the sake of owning one.

There’s a big difference between being preapproved for a loan and being prequalified. When you’re prequalified, a bank gives you an estimate of how much they’d be willing to loan you based on your credit history, salary, and cash on hand. They take your word for it, and do not verify any information at this point, so it’s best to be completely honest to get an accurate estimate of your borrowing power. Don’t forget to factor in property tax rates, home owner’s insurance, and PMI (if you aren’t putting a full 20% down) when estimating your monthly payment.

Preapproval is a more official step that you’ll take when you’re ready to start house hunting. The bank will verify your financial information, and make an official offer. A preapproval letter is often necessary when making a bid on a house, because it shows the owners that you’re a serious buyer and you can afford the home. Most preapprovals carry deadlines with them, so it’s best to wait until you’re ready to buy before taking that step.

Over the weekend, I used Lending Tree and Mortgage Match to get prequalifications. This confirmed that we qualify for the price range I’d already estimated based on online calculators. I won’t be finding a lender online when it’s time for preapproval, but now I have an estimate of my price range.

Do preliminary research on houses (and neighborhoods!) in your range.

We’re not 100% sure we’ll be buying in 9 months, and even if we were we wouldn’t start searching for another few months, but we spent some time this weekend driving around looking at houses that are on the market in our price range. It’s unlikely that any of these houses will be available when we’re ready to buy, but window shopping will give you a feel for the market.

It is really surprising how deceptive listing photos can be! Several houses looked really nice in pictures, but weren’t so nice up close. Or they were in sort of a scuzzy neighborhood. Again, if you start looking at houses in your price range, and they don’t look like houses you’d actually want to buy in desirable neighborhoods, it might be best to wait and save some more.

Find a buyer’s agent.

This step can actually come first if you want. A buyer’s agent can help you wade through the details, find listings in your price range, take care of the dirty work, and advise you when it’s time to make an offer. It won’t cost you a penny, because their commission is paid by the seller after the deal is done. So there’s no reason not to use an agent! Just be aware that they are salespeople, and they can be pushy. If you’re not seriously ready to start looking, you might want to wait to contact an agent to avoid the barrage of emails and phone calls pushing you to “BUY NOW!”

We’ve now taken all of these steps, and things are looking pretty good that we might actually be able to buy a home at the end of this year. We have the money to cover the down payment and most of the closing costs now. All that’s left is to ramp up our savings so we can pad our emergency fund so buying a house won’t completely clean us out.

Our plan now is to start seriously looking at houses at the end of this summer. I’ll keep you posted!

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How much are you really spending?

At the beginning of this year, Tony was hired for a full-time teaching position, and our income doubled. That sounds like we’re making a lot more than we really are considering the fact that Tony was seriously underpaid as an adjunct professor. But for us, it’s a lot of money, and it’s finally enough to cover all expenses, save a good bit of money, and treat ourselves every now and then.

Along with the income increase, our goals increased, too. Now that we can afford to fund our savings account again, we’re working toward the lofty goal of saving for a down payment and other necessary costs that go with buying a house. We’ve set a tentative deadline for two years.

Aside from buying our car — an admittedly huge expense — and an increase in rent, we haven’t increased our major living expenses at all. We budgeted carefully for the car payment and the increase in rent, and these increases were offset a bit by a reduction in health insurance premiums, so those two things don’t affect our monthly savings allotment anyway.

One thing I’ve noticed, though, is that big expenses aren’t what really affects my budget. I always think carefully before adding a big expense. We carefully looked at our budget before adding a car payment to it, and we thoroughly discussed how much we could afford in rent before signing our lease. I know what to expect when I add a big expense. What gets me though, is the hundreds of tiny little purchases I make throughout the year. The amount is so small that I don’t give a second thought to swiping my debit card, but at the end of the month (or year), it adds up to a significant chunk.

For example, if you buy a soda from a vending machine every day on your lunch break at work, it doesn’t seem like a big deal. It’s just 50 cents a day. But that adds up to $2.50 a week, $10 a month, and $120 a year. Is a soda a day really worth $120 a year to you? If the answer is yes, then great! But most of the time, when I really think about purchases like this, it’s not worth the money to me.

My biggest vices?

  • Starbucks beverages – At $4 each, the expense adds up quickly even if I only indulge 2 or 3 times a month.
  • Movie rentals at the local video rental store – Sometimes we run out and rent a movie if it’s not available on Netflix Instant Play or Redbox. This is mostly TV shows or older movies. We pay $2-$3 a pop a few times a month for the convenience of watching something now, but if we just put it in our mail queue and wait, we wouldn’t have to pay extra at all.
  • Cute baby clothes on the clearance rack – I’m guilty of paying as much as $5.50 for a pair of pajamas just because they’re cute. Yes, it’s clearance, but he really doesn’t need any more clothing. Even if he did, I could get a much better deal at a consignment store.

A few dollars here and there doesn’t seem like a big deal at the time. We’re making more money, we can afford it, right? But these purchases add up. All together, if I buy 4 Starbucks beverages, rent two movies, and buy one outfit, that’s $25 a month I could have been saving toward our house. That adds up to $600 over the next two years that could go toward a house. The $25 isn’t the problem; the problem is that I spend $25 without even thinking about it.

This isn’t to say that I believe in total deprivation. You guys know that I’m all about budgeting for life’s little luxuries. The point is, it’s important to budget for these things. You wouldn’t drop $600 without thinking seriously about it, so why should this be any different?

Sit down and think about the little mindless purchases you make. How much are you really willing to spend when you think about it?

I enjoy treating myself to the occasional Starbucks beverage, but $16 a month seems like too much. If I limit myself to one per month, that’s only $4 a month. That’s much more reasonable to me. Even better, I could cash in MyPoints or Swagbucks (referral link) on Starbucks gift cards and get them for free.

When I really think about those movie rentals, I remind myself that I’m already paying $120 a year to rent through Netflix. I’m not willing to spend any more than that for entertainment, so I should really skip those stops at the video rental store and just wait for the things we want to watch to come in the mail.

And Judah is going to look cute in whatever he wears, whether I pay the clearance retail price or a fraction of that at a consignment store. So I should stay away from the clearance racks and be more strategic in my clothing purchases for him by shopping consignment sales and setting a seasonal budget for how much I can spend to keep him clothed.

It’s important to be mindful about every penny you spend, whether it’s several thousand dollars for a car or a few dollars for a coffee. Every penny counts, and if you’re wasting money on things that don’t really matter to you, it’s easy to sabotage your goals for the things that do matter.

Photo by alancleaver

How much is laziness costing you?

I’ve mentioned before that Tony and I use a credit card to purchase all of our gas. We pay the bill off every month before it accrues any interest, and we get 5% cash back on all fuel purchases. Since we’re not paying interest, the 5% cash back is basically free money, and keeping an active credit line is important for building and maintaining a good credit score. It’s win-win.

The credit card is through BP, and we only get 5% cash back on BP purchases, so 99% of the time we buy gas at BP. We only buy at another gas station if the cost per gallon is less than we pay per gallon with the 5% discount. Makes sense, right?

At the beginning of December, we started seeing signs at BP gas stations for a new rewards program. Fill up five times, and you receive a $10 gift card. Since we fill up at BP 99% of the time, it should have been a no brainer for us. Enrolling in their loyalty program would net us up to three $10 gift cards for 15 fill-ups in addition to our 5% cash back.

The only catch? You have to print a receipt and take it inside to the cashier to get credit for filling up.

I’m ashamed to admit that we didn’t start participating in the program until last week. It’s the end of January, and we’ve only gotten credit for two tanks of gas even though we did more driving in the month of December than we’ve ever done in a single month. We probably could have already received the $30 worth of gift cards considering all the gas we used last month with holiday travel throughout the state and the move.

The truth is, I saw the signs every time I filled up, and the only reason I didn’t take advantage of the promotion was laziness. It was cold, I didn’t want to drag the baby into the gas station, I was in a hurry and didn’t want to go inside. It was easier to pay at the pump and get on my way, so that’s what I did. But it cost me. We easily would have filled up 15 times in three months, but we probably won’t fill up enough in the next six weeks to receive all three of the $10 gift cards we could have gotten.

Granted, in the weeks after a newborn arrives, I think it’s easy for even the most frugal person to be lazy about saving money. But it’s unlike me to turn down any offer for free money, and that’s basically what I did by putting off participating in this promotion.

I see this type of thing all the time from less frugal people, too. Sometimes it’s easier to pay twice as much for an item at a gas station when you need it than it is to go to the grocery store where prices are much lower. Millions of people would rather pay higher prices for groceries across the board than clip coupons and hunt for deals. Many people spend hundreds of dollars a month on takeout because it’s easier than cooking every night.

Laziness is a harsh word, and I don’t think it applies in all cases. When time is limited, I think it makes sense to value your time over the money you could save sometimes. But my point is, how often do we choose the easy way when just a little bit of effort could save us a lot of money? If you’re taking the easy way out most of the time, you could be costing yourself a fortune.

It’s a question I’m asking myself a lot lately as we adjust to earning a higher income than we’re used to. I don’t want to be lazy about our finances. When you have a little extra money, it’s tempting to take the easy way out, but I’d rather work a little harder to save even a few dollars if that means building our savings and reaching our goals faster.

So it’s confession time: how often do you let laziness keep you from saving money? Think about it, and consider just how much you could save if you made a little extra effort in those situations the majority of the time. It could mean paying off your debt sooner, building your savings faster, going out to dinner once a month, or even taking a vacation once a year. When you make the extra effort to save most of the time, those dollars and cents add up quickly.

Are babies expensive?

Throughout my pregnancy, everyone who gave me advice agreed on a lot of things. I’d love the baby instantly. He’d grow too fast. He’d be worth all of the discomfort of pregnancy. (They were all right.)

There was one thing they couldn’t agree on, though. Half of them said to prepare myself because babies are SO expensive. The other half told me babies don’t cost much at all.

I was really curious to see who was right. Two months into parenthood, and I can see where the disagreement comes from. The answer: it depends.

Baby expenses begin long before the baby is born. We needed a car seat, somewhere for baby to sleep (we chose a bassinet for the first few weeks and a crib for later), clothes for the baby to wear, and diapers for the baby to, well, you know. The rest of the baby stuff is optional, but nice to have.

While it’s possible to buy secondhand, shop around for deals, or accept hand-me-downs (we did all three of those things), the truth is that the initial startup costs for baby can be steep. Thankfully, we have a huge support group of family and friends who gifted us with everything we needed.

Once the baby’s born, formula can be one of the biggest monthly expenses. If your baby doesn’t have special dietary concerns, off-brand formulas can provide the same nutrition for a fraction of the price. The cheapest option is breastfeeding (it’s basically free if you do it exclusively), and I’m incredibly grateful that it’s working out well for us so we can avoid the expense of formula.

Diapers are another huge monthly expense. Newborns use 8-12 diapers a day, so the costs really do add up. Buying diapers on deep discount and using coupons can cut the cost tremendously. So can cloth diapering. By hunting for deals, buying seconds (slightly imperfect but new diapers), and sticking with the economical prefolds and covers system of cloth diapering, I built a stash that will last throughout my baby’s diapering years for under $300. That works out to about $10 a month if the baby spends 2 and a half years in diapers. That number drops even lower if you use your diapers for a second or third child.

Our generous friends and family provided us with enough new clothing and hand-me-downs from Judah’s cousins to keep him clothed for the next year. He has enough outfits in each size that I can get away with doing just one load of his laundry every week. He wears the same things all the time, but that’s okay with me. When he grows out of the clothes we have for him, we can shop garage sales, thrift stores, and clearance racks to keep clothing costs down. Until he’s old enough to complain about it, he’ll be wearing the same handful of outfits every week.

These are just the expenses that you can control, though. The biggest expense for us (and one that we unfortunately can’t do anything about) is health insurance. When my husband and I were both covered by individual policies, the cost to add our son was going to be astronomical — $400 a month added to the $500 we were already paying to insure the two of us. My husband’s new job offers family insurance for about half that, which is a relief. But our health care costs are much higher as a family of three than they were as a family of two.

Later we’ll see changes in our food costs as Judah starts eating solid foods. There will also be education expenses and recreational costs as he gets older.

These expenses that you can’t control are the reason why it’s so important to save money on the expenses that you can control. Cutting costs where ever you can will make it easier to afford the expenses you can’t change.

My point is this: if you’re pregnant or want to get pregnant, how expensive (or inexpensive) your baby will be is entirely up to you. Like so many other expenses, the choices you make will affect your budget. If you buy everything brand new, pay full price for diapers and formula, and fill your baby’s closet with more clothing than he needs, the costs can be astronomical. But with a little careful planning and frugal know-how, your baby’s first year doesn’t have to affect your monthly budget that much at all.

Goals for 2011

I’m surrounded by boxes once again, and in two days, we’ll move for the third time in eight months. It’s a stressful way to start the new year, but it’s really a great thing for our family. After eight months of frugal survival mode, we’ll finally be making enough to start building our savings instead of depleting it.

In addition to paid time off and a decent salary, we finally have employer-provided health insurance again after 8 months of COBRA and private insurance (Hallelujah!).

As I’ve written before, though, I actually find it harder to reach my goals when we’re living comfortably. A tight budget keeps me accountable and forces me to live frugally. More money means more temptation to spend frivolously. While this is more money than we’ve ever made, it’s still a very modest salary by today’s standards, and we’re going to have to stay focused if we want to stretch it to reach all of our goals.

To keep ourselves on track, I’m taking a break from packing to list our goals for this year and beyond.

1. Continue to live frugally.

Over the past eight months, we’ve had no choice but to live frugally. There wasn’t enough money available to go out to eat or buy things we didn’t need. Now that we’re earning more money, the temptation to spend will be greater, and we’ll have to stay committed to our frugal lifestyle.

2. Save at least 25% of our income.

The last year that we lived in North Carolina, we were saving about 30% of our total income. We’ll actually be earning more now than we did then, but we have loftier goals so saving will be a little more challenging.

3. Rebuild our emergency fund.

This is savings priority #1. Three moves, four months with no income at all, and four months earning less than we needed to pay our meager expenses have depleted our emergency fund to practically nothing.

4. Buy a second car.

We currently share a tiny economy car. It has served us well for the past four years, but now that we have a child, it’s a little cramped. In North Carolina, I drove the car to work and Tony was able to take public transportation to work and class. Now that we’re living in a city without reliable public transportation (and we’re living about 15 minutes from Tony’s job), sharing a car will be a little more difficult. So we’d like to invest in a second car so Judah and I aren’t stuck at home all day.

5. Buy a home.

We’re definitely renting for the first year in our new city — and likely the second year as well. But now that it looks like we’ll be settling down for a few years, I want to start making plans to become homeowners. That means meeting with a mortgage broker to find out what we need to do to get our credit in order and ramping up our savings for a down payment.

6. Pay off our student loans.

Becoming debt free is still pretty low on my list of priorities. I do plan to increase our monthly payments on these debts, but I’d like to wait until we’re homeowners to really buckle down and pay them off.

7. Increase retirement savings.

As part of his benefits package, Tony’s employer will be matching his retirement savings up to a percentage. We both have Roth IRA savings accounts as well. I will continue to put money earned through freelancing and other money-making projects into my account. We’ll also decide how much of Tony’s salary to contribute to his employer-provided account tax free.

8. Open a college savings account for Judah.

We likely won’t be too aggressive about saving for Judah’s college fund at this point, but I’d like to get the account in place so his grandparents can contribute if they’d like and we can put some money away when it’s available.

I’m so excited to finally have a bit of money to work with, but it’s not going to go far considering all of our goals. We’re going to have to be extremely focused. Stay tuned to see how we do!

Photo by dmachiavello

I love saving money, but not as much as I love sleeping

I’ve never been a big fan of Black Friday. I don’t like crowds, and I don’t particularly like to shop. I do love saving money, but I can usually find pretty good deals throughout the year if I look hard enough. Maybe I could save a little more on some things on Black Friday, but honestly, the inconvenience isn’t worth it for me.

Last night, after a fantastic Thanksgiving Day with my family, Tony and I drove home. We slept until 8 a.m. (pretty late for us these days). Our new recliner was delivered around 10 a.m. We chose a recliner instead of a glider for late night feedings, because I think it will be useful for longer than a glider.

Today I’ll be decorating for Christmas. I usually wait until the first weekend in December, but I’d like to get it done now just in case I have the baby in the next week. Beyond that, we have nothing planned. It’s 33 degrees outside, and we’re staying home all day watching movies and staying warm.

No Black Friday deal is better than that.

Photo by andrewb47