Tag Archives: Set Backs

Darn it! Time to think about an EF (emergency fund)

Quick blog: Over the last couple weekends, I have (once again) increased my bad-debt-to-income ratio. Up 2%.

This is due to a few factors:

  • school tuition due of $795 – so perhaps this is good debt, but I included it in my increase because it was charged on my CC with 12% interest and not charged against a student loan at 3.25% – 6%. So, in my book this fits in the mediocre category.
  • Then, a series of mishaps equalling $595 – which, should have been covered under an emergency fund if I had one larger than $75 in it. We went over budget this week by $115 ish (don’t take the husband grocery shopping because he thinks money is expendable), the pump blew out in the pond, etc…

And then coming up this month I still have school shopping for 2 kids (one is a teenager). But, I have a plan of attack – it will momentarily increase my percentage, but quickly decrease because I am working overtime at work to cover that bill. Overtime, I am hoping will continue a bit more to knock down some of these bills…like the $1390 or 2% increase that I occured.

So, even though I knew this was going to be a bumpy ride…one, I feel guilty for bringing up 2%…it may not be all that bad when the overtime check comes in to clear up and set me back down to 80% (or lower). 80%??? ghastly!

But, the lesson to my family is… it is probably very wise to build an emergency fund of, at least, $2000. Any idea how to do this while trying to snowball the debt down???

Millionaire Next Door? I think Not! (yet)…Long Way to Go…someday.

So, I was pondering while I was at work and it HIT me that I will be turning 36 in just short of 2 months.

Made me think… what should my net worth be at this age? I have no property. A $10K 403(b). Nada. How far am I from being ‘wealthy’? Found a calculator based on the Millionaire’s Next Door algorithm. I am definitely not an Accumulator of Wealth (yet).

In fact I am in the pit of doom. Okay, perhaps a bit melodramatic. But see for yourself. It made me kind of depressed. See:

There is 1 of 3 catagories you will fall in:
UAW: Under Accumulator of Wealth
AAW: Average Accumulator of Wealth
PAW: Prodigious Accumulator of Wealth

I am clearly a UAW to the max!
Actually, if I bought a house, I wouldn’t be so far off. And that is where my financial realizations bum me out. With California’s skyrocketing foreclosure rates, this makes it prime time for me to buy. Decent houses in my neighborhood: during the house buying boom the houses were worth: $400K. But now, they are only worth $159K! If my finances were in order and I had at least $5K saved up – I WOULD BE ABLE TO BUY MYSELF A HOUSE! And I would be $58K short to being a AAW.

But, “to every downfall there is opportunity waiting”. What is my opportunity? My opportunity is now realizing what goals I need to set for myself. Pay off the debt. Save, save, save. And eventually, buy that house.

That is the whole reason I am writing this blog. To prove to myself that I can work with my family to get out of debt; to build a financially stable life; to take a vacation; to retire comfortably; to teach my kids about money and give them the proper tools/knowledge to not make the same money mistakes I made, etc…

I remind myself that I have come a LONG way from my roots: being raised on the Welfare system, raised around drugs, having no financial knowledge, being raised in foster home(s), being victim to abusive relationships, being unstable, being flighty, irresponsible, etc…

I played victim & woke up realizing ‘playing victim’ is not the answer. “Take hold, Christine. You are responsible for your own actions, your own future.” I did. I am taking hold tight with the reigns. If we’re going to do this, lets do it right!

Within these past 5 years I have:

Obtained my Associate Degree in Biology
Obtained a fantastic job in a Research Cancer Hospital
Held down this job for 5 years
Increased my salary from $13K to $65K
My children are stable
1 year until my Bachelor’s Degee is finished

I have done a hell of a lot in 5 years! So, I want to do a hell of alot in the next 5 years.

Bow to the calculator of wisdom. What category do you fall in? And what is your realized goal?