Monday, April 18, 2011

This I believe (the financial sermon)

This morning at breakfast, D, N and I were talking about our Disney trip.  I don't know how it came up, but D said something to N about how a lot of kids never get to go to Disney World.  She asked how come, and I replied that some people can't afford a trip like that.

And then she asked, "Are we rich?," to which I responded, "No."
She then asked, "Are we poor?," to which I replied, "No, we're in the middle."

But I didn't tell her that we are probably in the upper middle.
That most people have far more debt than we have.
That we are able to save quite a bit of D's paycheck.
At some point, though, I will tell her and G and M these things and much more about our personal finance.

I will tell them how D and I lived at home and went to local colleges.  That going to college wasn't always fun, but we knew that a college degree would give us far more options than if we didn't.

That once we graduated we continued living with our parents to save money.  That it kinda sucked not being able to come and go as we would have done if we had our own place, but that you can't have it all at the exact same time.  There are always sacrifices.

I will tell them how we could have gotten married much sooner than we did but we chose not to because we both wanted D to finish his master's degree, and we wanted him to pay off his car so we would enter our marriage with only a mortgage as debt.

We had a small wedding that we paid for ourselves (my parents paid for the reception and had enough left over from what they'd budgeted that they bought us our dining room suite and our washer/dryer as wedding presents.)

We purchased a small home and lived with handed-down furniture for many years until we could purchase new furniture with cash.  We did not go into debt to get the best of everything when we were just starting out.  Almost 14 years later, we still don't buy the best of everything whenever we get the urge to get something.

We didn't have children for over 6 years.  During that time we both worked full-time and lived off D's salary; we saved every penny I made.  Even though we weren't sure we wanted children, I knew if I had them I wanted to stay home with them.  My mother told me and D to live off one salary from the get-go if me staying home at some point was in the "plan."  

With my saved earnings, I paid for my master's degree, we traveled, and we bought a larger home four years after getting married.  We also saved enough in cds that should something happen to D's job if I was staying home with children, we could make our house payment for 3 years.  (We actually had more saved but we took a little out of cds to purchase a larger car as our family expanded.  Seven years later we still have these cds, just in case.)

I did not make a lot of money, mind you.  When D and I got married, I was making about $17,000 working at an electronic publishing company.  And after that I was a teacher, so I made maybe $25,000. But saving $17,000 for a couple years adds quite quickly.  We still saved some of D's paycheck as well, so that if and when I stayed at home we would still have savings.

I will tell my kids how the first thing I do when D gets paid is transfer money into our various savings accounts and then I pay our bills and whatever left over is what I have for groceries and clothing and whatnot.  Savings comes first.  

I will tell my kids that we pay off our credit cards every month.  And if we thought we couldn't pay it off within a month, it wouldn't get bought.

I will tell my kids that I started an additional savings account for medical expenses because health insurance costs are ridiculous, an FSA doesn't go very far when you have a family of 5, and we don't spend the money in the health account on anything but health.  Even if I would love to be able to buy all the kids' clothes from Gymboree or Janie & Jack.

We also don't spend money in the home/car repair account on anything but home/car repairs.  The money in the Christmas account is only spent on Christmas.  The money that I'm setting aside for G's preschool will only go to G's preschool.

We live below our means.  We don't get every new thing out there.  We don't have a Wi.  We don't have cable or satellite television.  We don't have new cars.  We don't take a vacation every year.  The only reason D has a smart phone is because he is on call for his job, and his employer pays the monthly bill.  We don't shop at boutiques.  We have an almost 14 year old refrigerator that will only be replaced when it dies in a big heap on our kitchen floor.

We value education and saving and caring for our family's needs more than anything else.

Has luck played a part in all this?
We were lucky to have parents who supported our educations and made their own sacrifices so that we could attend college.
We were lucky to not have to deal with catastrophes beyond our control---like serious and expensive medical conditions.
We were lucky that D happened to go into a field of study that pays well.

But there were and are a heck of a lot of choices we made and continue to make because we want security more than we want stuff or the prestige that goes with having certain stuff or the short-lived thrill that goes along with getting new stuff.

(And despite all this, I also know that there are a heck of a lot of people who weren't raised as we were to value education by parents who provided a secure, loving home; people who are working in nursing homes and in hospitals and at fast-foot restaurants (doing the jobs no one really wants to do) and are still poor, who don't feed off the system and cannot get by.  Which is why even though I financially feel like a Republican, my heart feels like a Democrat.  And so that's the way the wind blows my sails.)

1 comment:

Kelsey said...

You're an inspiration to me in this department Carrie! I feel like we do pretty well at being smart with our money but we could do better. Your kids will really appreciate this when they are a little older.