Wednesday, August 5, 2009

Personal economics

There is something really intoxicatingly empowering about budgeting. Maybe it's because we're a married couple of an econ prof and a math teacher. Setting up budgets makes us so happy.

We've had some super-expensive years. Out-of-pocket baby expenses ($7500 between 2 babies), other medical bills ($16,000 last year!), dental bills, tuition through the roof for both of us, car repairs, a few moves, etc. We'd scrambled so much to be debt-free through it all that our "whatever-savings" took some hits. Okay, a lot of hits. Our only focus was on cash-flow and not owing anyone anything. We've always been nerdy about retirement, so we never lowered our 401ks. But it was time to just have some "fill in the blank" savings again. Not tagged for college expenses or retirement. Just Savings. That was a luxury that didn't make sense last year.

We had a date to IHOP to re-organize our finances about a month ago. Set up a real budget. Set some lofty savings goals. Decided to cut back where we could and just focus on building up net worth again. This is the first year where we've had standard employment, with no weird gaps (for maternity leave, Steve schooling, etc). And, I presume, no strange medical expenses or babies? ;)

It feels really good to be a cheapo! This is a natural state for both of us, I think. We took the boys to the library last weekend and had them pick out movies for Sunday movie day. We got some 99-cent pizza dough at TJ's for when Steve gets a pizza craving late at night. I'm making more food from scratch and we're lowering our food budget WAY down. Just being cognizant of the necessities is saving so much money and it's painless. I love it!

Steve and I are feeling really excited by this new phase, where we can be in the amassing mode instead of the "outflow" mode. Feeling like there's control over finances seems to filter into other areas, as well. Instead of feeling like deprivation, it's about taking back ownership of resources. And if Jack has another $880 dental bill, it will be nice to just write a check from savings instead of pulling out of cashflow that month. :)

We're apparently trendy, as I'm teaching 4 econ courses right now...and nearly every student is talking about changes that they're making. And feeling good about them! If nothing else positive comes from the downward climb of the economy, this is certainly one of them. People seem more empowered to look for other options in their lives.

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