Monday, November 21, 2011

on saving

i tried to write a post about parenting tonight but it was just not coming together, so instead we'll go with the default topic of this blog, finance.  inspired by a friend who  paid off her home in her twenties (on one income!), james and i are on a rapid plan of paying off our house as fast as possible (while still contributing to our 401k match, kids' college funds, giving, etc.).  we've made budget the first 3 months, which is very encouraging.  i love going to the bank and asking them to put x dollars toward a "principal only payment."  i equally love reworking amortization tables every few months to see how quickly we can pay off our house if we add extra.  and i love my frugal husband who is committed to sacrifice monthly spending money and all possible bonuses this year to put toward the house.  yes, i am a nerd...but a nerd who will love not having a house payment in a few years if we stay on track.  oh the freedom!
we acknowledge that it's not up to us to stay on track and are thankful for a God who is the ultimate provider.  he has given james and me great educations and jobs, and we know they could easily be taken away.  we are trying to be good stewards and rid ourselves of all debt (i think it is interesting that most people assume debt = credit card debt, school loans, even car loans, but very few people call a home loan debt).  we are blessed to have wise friends and family who support and guide us in our financial decisions and we can talk openly to about money.

suzie ortman preaches open dialogue about finances with our spouses, children, etc. and i think it is so crucial to have someone to go to for financial advise (besides a bank loan officer, real estate agent, or anyone else who might have an incentivized biase).  james and i keep an excel budget on our computer of all of our transactions during the month broken into categories so we can see exactly where our money is going and plan our long term goals every few months.  we also bounce our financial ideas off our parents and very close trusted friends for input.

this article in smart money  emphasizes the importance of social support when it comes to money.  "In the U.S. this principle lies behind the success of Weight Watchers, with its group weigh-ins, and Alcoholics Anonymous, with its group confessions. But it's not a principle that most of us apply to our money: Saving is a private matter, and one that gets neglected. The consequences of our spending are firmly in the public view: a spacious home, a luxury car with the name of the kids' fancy school plastered on the bumper. But the consequences of our failure to save -- a loan rejection, an uncertain retirement, letters from a debt collector -- are much more discreet. This behind-closed-doors effect lets many people talk a good game about their financial responsibilities, while shirking them in practice, says Bob Pozen, a senior lecturer at Harvard Business School: "People say they want to save, but they don't."

i hope we can all start to shed the walls of keeping finance a taboo subject.  i think one of the reasons money is the biggest cause of divorce is because people are so afraid to talk about the subject.  while we don't need to tell others how much we make, how much we have in savings, etc. we can all do ourselves a favor and enlist others to help keep us accountable for our financial decisions, especially those who have more experience and wisdom than ourselves.  love you all!


marcia truitt said...

What a great thought: we need to let others hold us accountable for our financial goals. It's true, it really is hard to talk about this with others because it seems SO private and yet it affects so much of our lives.

While Cade and I agree 100% with what you are James are on path to do, we are working towards paying off our home at a slightly slower pace. This is because I stopped working full time when Eva was born so I could be at home with her. I am not judging you at all for continuing to work full time, I am just so thankful that I can be with her at home and still bring in some income at the same time. But like you said, we make sacrifices in certain areas for our goals.

Diet DP Loving Mom said...

Since becoming a single mom, finances mean so much more now on a single income. I didn't do so great this year (no debt, but no saving either). One step at a time right? I have my 2012 budget put together and hope to save as much as possible so that I can retire, vacation, and some time buy a home again. But I agree we are so hush hush about money.

kacie said...

amen silvy! all good points. since i am in banking i get to talk to more people than most about their finances, but on a personal level, i definitely try to keep ours quiet! mostly because i'm ashamed of what it looks like.

Erin said...

Thanks for posting. I always enjoy your finance related posts. (Although Paxton and Parker are soooo cute.)

Cameron and I have just started talking about our budget again. I guess the move and starting new jobs sort of threw us off. We've also got to save for the summer, since I only get 8 paychecks, and I'm selfishly not working this summer. You are motivating me to be more frugal. :)

Tima Murrell said...

Just found your blog. My husband and I paid off our house a couple of years ago. It is a huge blessing and a wonderful feeling. Will be praying for you. Keep up the good work and the trust in God.
Merry Christmas!

Jenny Clements said...

I just saw a commercial filled with pictures of you and James at your wedding! That was really cool!