A plan

Hubby and I sat down a couple of days ago and realized that we were going to have to make our summer plans quite soon. We are getting our tax return and that’s what’s going to pay for our little end-of-summer vacation and a couple of weeks of summer camp for the kids. I know that we have debt, but Hubby and I agree that we don’t want to totally stop living our lives while we pay it off. The tax return will more than pay for what we have planned and we’ll have some left over. (Yes, we get big tax returns; I’m lowering our exemptions in an attempt to fix that but, for now, why not use it to our advantage?)

 

I am using the Start Late, Finish Rich plan and paying off the bills while starting a savings plan. We’ll pay the credit card off a little later, but not too much, and we’ll have savings to show at the end of it all. (Of course, we’re planning on spending a chunk of that savings on a trip to Universal Studios – HARRY POTTER!! – in a couple of years, but we’ll still have some after that.) Yes, we have the next 3 years planned out as far as vacations and spending and debt are concerned.

 

We haven’t ever really taken family vacations. Our vacations have consisted of visiting family who live out of state. While that’s amazing and I truly miss my parents, the kids are old enough now that we want to take family vacations with them as well. These are the years they’ll really remember when they get older. So we’re going to use the tax returns for the next couple of years to pay for trips. Before they are old enough that they don’t want to be seen with us anymore and while they’re still young enough to find magic in the experience. And we’ll still get to see my parents.

 

I know this seems extravagant, but I realized through doing a couple of the exercises in the Finish Rich books that our main focus is on spending quality time with the family. It’s hard to do that if you’re always spending every spare cent on debt. So, I’m finding ways of financing these trips from savings and tax returns (that we won’t miss if we don’t see in our regular pay) so we can have the memories without the debt. We enjoy our dinners out, and going to the movies occasionally, and having date night, and going places with the kids. That is the main focus of our attention and what we want most right now. We are saving for retirement at a steady clip and about to increase that amount because Hubby is getting a raise. That raise is going to go straight to retirement and we’ll never miss it. What we want most out of our money is to use it to make memories. For that, you need to have some available. And, I’ve calculated our new budget without our disability pay. That’s where the money for debt repayment and savings is coming from. It’s even getting deposited in a different bank. We’ll never miss it.

 

That’s one thing that my favorite personal finance books have gotten really right. They realize that money isn’t just about debt and investing, that it’s a personal, emotional thing, too. They advise, before anything else, you figure out your priorities. Why do you want this money? Security. OK, but what does security mean to you? Is it having enough to retire in a year? Is it having an emergency fund? Is it having a paid off mortgage? All of the above? Something else? Control. Does that mean that you control the money exclusively? (Not advised)(But maybe you need your own funds that you are not accountable to anyone for, like an allowance each paycheck) Does it mean that you have enough that you can start your own business and be your own boss? You need to figure out, not only what you want from your money, but what that want means for you specifically. Everyone’s definitions are different and therefore everyone’s plans have to be different. No matter what, you need to do that first though so that you know where your money needs to go and what it needs to do for you.

 

In our case, that means paying off debt so that we can have more money to use to do more with the family. More vacations and camps and maybe some actual travel. But, we want to be able to have some fun while that’s happening. So, we will pay the debt off a little slower and go on vacations in the meantime, without going into more debt. That’s the key. We can do this intelligently while still getting out of debt. But, that’s our priority right now. Not missing out on the kids’ childhoods because of our debt. We will make free or cheap memories as well – museums and parks and the like, gardening and volunteering as well. But we want to give them those spectacular childhood memories if we can. It’s going to take some doing, but I think we can.

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