Mould developing on our stucco finish? Yikes! Motivations to save . . .
DH = Dear Husband
Recap & our numbers
It’s the first Saturday of a new month – time for an update. To recap the whole story, DH and I have been on a journey out of debt since June of 2012 when our total debts added up to $257,000:
- $21,000 in consumer debt
- $81,000 debt for DH’s home business
- $155,000 for our mortgage
We’d paid off the last of our consumer debt by the end of 2012. We paid off the last of our business debt in June of 2015. Following the steps outlined in Dave Ramsey’s The Total Money Makeover, we started a two-pronged approach once we were debt-free except for the mortgage:
- We increased our savings, with an initial goal of building up a big emergency fund to see us through 3-6 months of loss of income.
- We started to pay down the mortgage as aggressively as possible.
Our mortgage now sits at $112,308.
Our emergency fund is 91% full. (DH does not want me to share dollar amounts when it comes to our assets.)
What if . . . ?
The next big milestone we’ll reach in our debt-reduction is to break the six-figure barrier. It will be a sweet moment when we go below $100,000. And here’s the temptation: we could do it now – by putting most of our emergency fund savings against the mortgage.
My history with savings
Saving has always been a challenge for me. In my discretionary account, I have set several savings goals for myself, but I have not achieved one of them. If I have any amount of money in my pocket, my purse, or my bank account, my compulsion is to spend it – despite the best of intentions. It has been this way since I was a teenager who spent all of her allowance – well before month’s end. “There’s a hole in your pocket,” a friend told me when I was a university student. “Money won’t stay in it.”
The big step forward I’ve made in terms of savings has been that since June of 2012, DH and I have not once used debt to pay for anything. Whether it was a new roof, a big vet bill, or home renovations, we have saved up for each big expense and paid for it outright. That is not something we EVER did before we started tackling our debts. But even now that I’m on track in many ways, when there is no specific goal – when I’m saving just to save “because it’s a good thing to do,” I don’t follow through.
Good thing I’ve had a pension plan to invest in all of these years! I’m going to have a decent retirement income – not because of my own wisdom, but because of dumb luck. I had absolutely no appreciation for the Teachers’ Pension Plan when I started out in my career, financial head deeply stuck in the sand. It did not motivate my job choice. Nevertheless, with no say in the matter, I’ve been investing in it steadily all these years, and it will serve us well.
Why we’re following through with savings now
We’ve made great progress in our plan to save up an emergency fund for 2 reasons. And now we’ve got a third reason too:
- The concept of “emergency” isn’t vague for us. We know what “loss of income” is like. For six years, DH was underemployed/unemployed after the high-tech bust a decade and a half ago. He’s been running a successful home business for six years now, but there are no guarantees. Injury, illness, a shift in the industry . . . It’s not inconceivable that he might suffer a second “loss of income.” We really are motivated to have a 6-months buffer in case that happens.
- We have some big ticket item expenses on the horizon. Our van is 17 years old – and it looks it. We have enormous respect for that ’99 Dodge Caravan, and we’ll drive it until it breathes its last. Hopefully, it’s got another 17 years to go, but more likely, it will give out any day now. We plan not go into debt to replace it when that time comes, so even when our emergency fund is at 100%, we’ll have a motivation to keep on saving. Our furnace and A/C are turning 18 years old this year. They’ll need to be replaced soon too.
- Our house was built in 1998, and most of the houses on our street as well as an adjacent street were built within a year or two before or after it. The builder offered the option of a stucco finish on the outside, and we, like many others, chose it. About 5 years ago, some home owners started to notice a growing mould on the stucco finish. Apparently, the builder took the quick-and-easy route when it came to preparing for it, and the mould is a result. As far as I know, two owners have refinished their stucco. I know that one of them paid about $60,000 for it – and that was for a house that is smaller than ours. Ugh! Someone has sent around a flyer stirring up the idea of a lawsuit against the builder. Who knows what we’re in for? Whatever it is, we want to be ready for it.
Blessing in disguise?
Sometimes, we’re able to recognize a blessing in disguise, and I’m seeing one here. Our impending but not-yet-urgent needs to replace vehicle, furnace, A/C, and possibly stucco finish (YIKES!) are keeping us on our toes. And I in particular am in need of this kind of motivation to follow through on that very basic of financial fitness practices: saving.
Do you find it challenge to follow through with savings? What makes you more likely to follow through? Your comments are welcome.
Thanks for reading our report for March ’16! Please check out my weekly posts at Fruclassity.