Whenever we used to have cleaners come to the house, DH and I would first rally the troops. “You’ve got to clean your rooms. The cleaners are coming.” This command would be met with complaints of, “I hate it when the cleaners come!” and “Why do we have to clean for the cleaners?” Picking up mess to make way for scrubbing, vacuuming, mopping, and dusting is relatively easy, of course, compared with the hard work that follows it. But it’s annoying.
Annoying Financial Messes
I found that our efforts to navigate the budget for June, with the goal of paying $4,000 off Debt #1, were frustrated by annoying messes. Our first mess had to do with credit cards. There are certain expenses that we are set up to pay with our VISA, and while we have decided (under the influence of Ramsey) not to use credit cards for impulse shopping or for anything remotely discretionary, we do use them for gas, phone, internet, and any medical or dental bills that will be reimbursed through my work’s insurance plan.
We have always been very good about paying off our VISA when it comes due, with only the odd slip up. But now, we’re committed to doing even better. Now we transfer money to our VISA account the same day we use the card. So if we buy $48.17 worth of gas for the car in the morning, we transfer $48.17 to our VISA account that evening. When our next credit card bill comes in, it will be at zero. A noble plan, I think.
We knew that our VISA bill would come in at the end of June, and that it would cover purchases made from the middle of May until the middle of June. So we budgeted $500 to cover any messy credit card debt from the previous month. Smart thinking! Only it didn’t cover it. Our May VISA debt amounted to $700. Our debt repayment had to be lowered by $200. Not too big a deal, but a bit deflating.
A second annoyance involved our bank account. Our bank account is one in which we have opted to maintain a balance of $1,500 to avoid paying banking fees. On the rare occasion when we’ve dipped below $1,500 – even once during a given month – the fees have kicked in for the whole month with a vengeance.
It’s a system that worked in the past, but it doesn’t work now. Ramsey’s first baby step out of debt is to save $1,000 for emergencies. I was considering our untouchable $1,500 minimum balance as our emergency fund – but such a fund cannot be untouchable. So when DH found an account without banking fees, I thought that it was to make the $1,500 available for such cases. It was no small deal switching accounts. It required us to track down everyone who does automatic deposits and withdrawals to and from our old account – insurance, employers, utilities – and to send the paper work, faxes, and e-mails necessary to get them working with our new account. It was like tidying up a mess to make way for the cleaning. It was annoying.
Starting Off With An Emergency (and bad communication)
Now to develop that house-cleaning analogy, suppose that you have diligently done away with the mess, and an emergency happens. You’re emptying the dishwasher and two plates slip out of your hands to smash on the kitchen floor. All activity must be suspended until the shattered glass is dealt with. Children and pets are at a safe distance; bare feet are shod; Spouse #1 gingerly sweeps up the shards while Spouse #2 gets the heavy duty paper bag to put them in so that they don’t pierce the garbage bag. But where are the paper bags? It turns out Spouse #1 used them for something else and thought that Spouse #2 knew about it. Oh, oh. Communication lapse.
We had an emergency in June. Our first month on a budget and we had an emergency! Our van, a 1999 Dodge Caravan with over 200,000 kilometers, which has been paid off for years, and for which we have enormous respect, needed suspension work. Shocks and struts (don’t ask me what those are) and wheel alignment came to over $1,300. No problem, right? We had that $1,500 all ready to go. But DH had used it to pay a tax bill. I didn’t know that. So again, our debt repayment was hacked. Ugh.
For the month of June, we had hoped to pay a whopping $4,000 off of Debt #1. But in dealing with financial mess, an emergency, and a lapse in communication, we could only manage $2,500. I’m surprised at how disappointed I am. But I really do think that our efforts in June will set us up for a better July. So on to next month’s budget.