Finance Check-In

10

Sep

filed in

Finances

A finance check-in: We opened a high yield savings account with Ally a few weeks ago. There’s not much in it: a total of $64 at the moment. But, it’s better than nothing.

The savings plan is to get our main savings account up to $1,000 and then anything in excess of that will go into the Ally account for building our emergency savings fund. The target goal for the emergency fund is $23,000.

I’m still working on discipline with spending and not overpaying on debt payments such that we have to use credit cards for the rest of the month. It’s a work in progress. Right now, my immediate goal is to get to where we don’t use the credit cards at all anymore.

As I have said on Facebook, I did pay off my phone and the boys’ phones a couple of weeks ago. Our phone bill immediately dropped about $80, so that will mean good things for our monthly budget. In the meantime, no more Domino’s for the rest of the month.

I get all panicky about our debt load, but our front-end debt to income ratio (mortgage only) is 17%. Our overall DTI is 31%. Higher than I would like it to be, but we can definitely afford to pay our bills, even including the current debt.

I waver on this approach, but currently our plan is to make just over minimum payments on the credit cards and build up our savings as quickly as possible. This is pretty much the opposite approach we have taken over the years, throwing 100% of any excess at all debt, never actually saving for long.

Family has been incredibly generous with us over the years, but I am determined to be independent now.

Finance Check-In: Housing

Part of escaping the scarcity mindset is knowing that we don’t have to tap into our current equity to pay down our debts and build savings. After all, where would we live?

Our house is worth approximately $377,000. Today, we owe $218,624.94. That’s some healthy equity.

I keep looking at Realtor.com at houses in the county or adjacent counties in the $200k range. But, it all mostly comes back to location/ housing quality. None of the boys want us to move. My family doesn’t want us to move. Even my realtor friend doesn’t want us to move.

I know it is scarcity mindset that keeps me wanting to cash in that equity. I do love our house, way even more now than when we bought it because we have done so much to it to make it more to my tastes. Me, the girl who is afraid of literally her own shadow, is in no way, shape, or form afraid of anything in this house. But, the me who never has money for long keeps thinking we could do an awful lot with that $130k or so that would be left after realtor fees, whether it was a downpayment on another cheaper place or paying off debt/establishing savings.

And, I’ll admit: there’s a tiny portion of my brain that feels like I don’t deserve to live in a grand house such as ours. That’s the depressed, Knob Hill part of my brain lashing out. I’m working on it.

That’s all for the finance check-in for now.

Love, Caroline

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