Finding our financial way again

The Forum’s Financial Fix-up chose us? Shocked, I vaguely recalled filling out the online application on a lark several months prior. I’d never even thought about it again and never mentioned it to my family. We had started seriously working on our financial goals over the summer. We had been on the same page financially for most of our 20-year marriage. We read Larry Burkett’s Financial Planning books early in our marriage and stayed debt free, lived on a budget, saved and invested, and gave to those in need. However, in 2006, we decided to make a career change. Nathan went back to school. The resulting three year re-tooling time took a toll on our finances and wiped out our savings.

Now with Nathan in his new career, we were a two-income family, making more money than we ever had before, but we still felt broke. We didn’t seem to be getting back on our feet financially and were living month to month. The resulting stress was causing relational tension between us. I also had a lot of internal stress. I didn’t feel like we were living out our values. Dave Ramsey says that the flow of money in a family represents the value system under which that family operates. Our checkbook said we liked STUFF. We were caught up in consumerism and were not focusing on giving or saving….two things that we thought were important to us! Booker T. Washington said, “The happiest people in the world are those who do the most for others.” I knew what that felt like……but we weren’t giving at the level we could or wanted to.

We decided it was time to act! We spent the summer studying Dave Ramsey’s “Financial Peace University” and applying the principles. First we quickly saved up a $1,000 emergency fund. Then we stopped using our credit cards (that was an interesting step…I’ll blog more about it later) and brought all of our transactions current. We did a two month expense log where we analyzed where every dollar was spent for two months. Based on this information, we constructed our “budget.” Since the word budget sounded like straitjacket to Nathan, we decided to call it our cash flow plan and made sure we had a “blow” category with weekly “play money” included. We implemented a cash envelope system for the frequently used categories like groceries, gas, household and haircuts. We started a “sinking funds” savings account for the categories that are used more infrequently such as annual insurance payments, clothing, vacation, and gifts.

Our GOALS: This is what we are currently working on….

1. Get out of Debt…. When we started our car loan was at $7,500. We’ve paid it down to $3,600….half way there. We are putting every spare dollar towards this goal and are determined to have it paid off by summer!

2. Save 3-6 months expenses in a liquid emergency fund……when the car loan is paid off, we will roll that payment into this goal along with any other discretionary funds. We will be there by Dec. 2012!

3. Save 15% of our income in retirement funds. We are on our way and so thankful for the Forum Financial Fix-up to help us stay focused and intense in reaching our goals.

Thanks for taking this journey with us. We’d love to hear your comments, ideas and stories along the way. We hope that our story can encourage you as well!

Nathan and Brenda Richman

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