Remembering to stop and refocus your priorities is important in order keep balance in your life. We have all had times when we became incredibly busy with one aspect of our lives. Sometimes its more than one thing pulling at our attention but you can’t loose sight of the things that aren’t getting attention that are truly important (like family). Recently for me I haven’t been posting on this site and to take it a step further I haven’t been focusing on my money as much as I have in the past. It doesn’t mean that because I was focusing my energies elsewhere that my finances went away.

Did I stop paying my bills when my focus was elsewhere? No - they still got paid. Did I splurge on expenses? No - though I’m sure I spent a bit more than I would have normally. If everything is going alright with one aspect of our lives like money and we pay less attention to them there’s a good chance nothing bad will happen. But there’s an equally good chance that nothing good will happen. I believe that its time for me to pause and refocus on my finances for a little bit.

My wife and I had decided to focus on reducing our debt with minimal success though the debts have creeped down a bit with our payments. By refocusing on my finances I’ll be able to put some effort back into this goal.

So rather than simply saying that I’ll be refocusing my efforts on my finances this weekend I plan to:

• Review all of my spending for the past couple months
• Set up a budget for the upcoming week (and post it)
• Get a lay of the land with my debts and assets
• Finally see what next steps need to be taken

Stay tuned!

The kitchen is also the reason that I have been mostly silent since we started the work. I decided to be the general contractor on this project as well as the homeowner getting the work done. I have to say that by doing this we probably saved a few thousand dollars. Unfortunately it also meant that I was doing a lot of the unskilled labor to save costs.

The net result:

• We have a real kitchen again
• We have about twice the storage and counter space
• We have a dishwasher
• Most importantly we increased the value of the house

This one project has cost us approximately $15,000-$17,000 but the increase in the value of our home is around $25-30,000. Although a great deal of effort went into the kitchen we also kept in mind the resale value of the house so there were no crazy designs or ideas - just functional additions.

I am glad that this project is now done - all that’s left now is moving things back into the kitchen which shouldn’t take away from my blogging anymore.

One of the things that my wife and I enjoy is a glass of wine or a beer in the evenings. The question is do we give up our evening glass of wine for the sake of saving a few extra dollars a week? If we were in a situation where we are not making ends meet and we’re barely able to pay our bills the answer to this question is quick and obvious, of course.

The question becomes a bit gray in my opinion when it isn’t a matter of necessity. My wife and I are in debt and we have decided to focus our energies and finances on paying this down. We are able to pay all of our bills without too much difficulty but at this rate it will take us a long time to pay down this debt. The question becomes how much do we decide to give up in order to speed this up?

Some authors and financial gurus will say that you need to do everything and give up everything in order to get financially ahead. Although in principle this is a great idea do you want to give up everything that you enjoy because it will save you a few extra dollars?

The reality is it’s a bit of a toss up; if your sin is enjoying a latte from Starbucks that costs you $5 a day over the course of a year this adds up to $1,825 which could be used for a great many other things that would be more enjoyable or beneficial. But if you really enjoy that latte it might make your day to day life less enjoyable. Can you go without the latte? Of course you can. The question is do you need to go without the latte if it’s really important to you?

I think a balance needs to be set, if you are about to give up everything or almost everything for the sake of a financial goal the frugality you’re undertaking should have a purpose. You are choosing to forgo your quality of life for the sake of a financial goal. With a specific goal in mind I am happy to make sacrifices but it’s a choice that everyone has to make. For the sake of our current financial goal we’ll give up some of our niceties but not necessarily all of them. The question that I am still grappling with is how many of them and to what extent because the goal is important to me but so is being able to enjoy my life.

Unfortunately I can’t speak for everyone but I know that I have become a lot better at purging unneeded things yet a few items have managed to move with me a couple times. Going back to David’s post there is a laptop that I bought and used a bit but not excessively that I have carted with me on three separate moves. The computer is now almost 9 years old yet I still keep it. Why you ask? Well it cost $1,800 at the time and I purchased it on a store credit card so in the end I paid over $3,000 for it. It’s not quite junk, yet, I can still use it but it holds little value to me now. Yet I keep it, how much other stuff that should be junk do I keep around?

I also got to thinking about all the stuff that I have purchased over the years and never used, some of it still has some value and use but why did I buy all this stuff? Well I think it has something to do with the consumer mentality that most North Americans get into as they grow up. The latest and greatest gadget comes out and we purchase it, without really determining if we need it.

There is nothing wrong with being a consumer if you can afford it (environmental issues aside), but I doubt that I am the only one that purchased a lot of my stuff with credit. Since starting this blog a while back I have become much more aware of my spending and as a result a lot less useless stuff has been purchased but I am not completely innocent. Now whenever I am about to purchase something that might end up being stuff I stop myself and think do I need this item or do I just want it? With our focus to repay our debt this questioning of purchases is going to increase.

As for that laptop, it’s still tucked away in the basement but it will be tossed when we clean the house in preparation for the kitchen renovation that’s coming up.

Here is my budget for this week:

This is definitely an increase from my typical budget. I have mixed a couple categories that were somewhat divided before. The biggest one is food, this upcoming week I expect that I will pay for the groceries and even if I don’t this is approximately what we’ve been spending for the three of us every week. This does include food and stuff for the baby.

Other than that I’ve allocated approximately $50 for alcohol which is an unnecessary expense but we have a long weekend coming up and it’s nice to have a beer or two when we get home from work and after the baby is asleep. I know that there is room for improvement in this budget but at the moment we are able to work this budget.

Question for my Readers

How do you handle items in your budget that are unnecessary but fall into the quality of life category? For example having a beer or some wine with dinner, unnecessary but if you enjoy something like this being forced to remove it becomes an issue of quality of life.

Is Budgeting Keeping You Poor?
Credit Cards Don’t Suck, You Suck!
Lifestyle Infation

How did we do it?

Its easy - All it takes is a little research and a phone call

Step 1 - Either:
Call your credit card provider and ask them or
Check your providers website - they probably list their credit card options - find the lowest rate one

Step 2 - Call and Change your card type

Its that easy and the impact is huge.

The impact for Me

The impact can be significant depending on your credit card provider and what interest rates they offer you. My wife and I both recently changed our credit cards to low interest ones and here’s the impact that my credit card will see:

At 19.75% with a $5000 balance my monthly interest is $80.65 (about $1022 per year)
At my new rate of 9.15% with a $5000 balance my monthly interest is $37.36 (about $448 per year)

With a simple phone call I was able to reduce my yearly interest payments by almost $575 per year which over the long haul makes a huge difference. If I keep my payments exactly the same then all the difference goes directly to my principle. Using my credit card as an example if I hadn’t made the switch and I paid $100 per month, which is about my minimum payment after a year I would have a balance of roughly $4722 which isn’t all that great considering I paid out $1200 in payments. With my new rate of 9.15% with the same $100 monthly payments my balance after a year will be $4147.

By lowering the interest rate on your consumer card you can very easily cut years off your repayment time which is exactly what my wife and I are looking to do.

_{Photo by The Shifted Librarian}

When I started this blog almost two and a half years ago I was in debt and I wanted to make money and live the ‘easy life’. A lot has happened since that time, I’ve gotten married, moved into a new house, changed jobs three times and most importantly had a baby. My life now is different than it was when I started this blog. Unfortunately there are a few things that have not changed, I’m still in debt. My wife and I are still in debt. The good thing is that we’re not drowning in our debt with a mortgage that we can’t afford like a lot of people are. With the arrival of the new one we now know that our lives are forever changed and our lifestyle has to change along with it.

We see our friends who managed to come out of their twenties with little to no debt and with the economic times being tough they’re able to take advantage of the great deals that are out there. Cars selling at huge discounts, houses that are priced reasonably or even purchased at a huge discount. My wife and I got to thinking about our debt and our lives. The reality is that our debt is holding us back. We would be in a great situation if we weren’t carrying any debt. Unfortunately that’s something that we are carrying (along with a wiggly baby from time to time)

The Conclusion

We have decided to focus our efforts on our debt… to some extent, but that is a completely separate post. We are going to start attacking our debt as much as humanly possible; we’re tired of looking at our budgets each month and realizing that we’ve got enough to get bye but only barely. I am now 32 and its time to get rid of the debt.

The Plan

The plan is pretty simple, one debt at a time. My wife and I have kept a significant part of our debts and finances for that matter separate (again this is another post) but we’re going to start budgeting together and tackling our debt together, one credit card and one debt at a time. We are going to start with one of my wife’s credit cards and take it from there. We have both come to the realization that if we were debt free we would be so much better off and now is the time to strive to achieve this.

From personal experience I saw my parents get into debt trouble when I was a teenager and slowly claw their way out around the time I was starting working. I didn’t learn from their mistakes I just managed to repeat them but I did learn one thing (although partially on my own) unless there is a good reason to carry debt it’s a bad thing. By focusing our efforts we’ll be able to get rid of one debt at a time quicker.

Over the past couple months I have been posting very little partially because of being incredibly busy and partially from being in my own little world. Blogging about getting out of debt has helped other bloggers and I think it will help me. I know it will take a little time to find my rhythm but I saw the great strides that Trish from Blogging away debt made and I think its time to focus on my debt before starting to focus on getting the one million that I would like to have.

Here is my budget for this week:

My goal with this weeks budget is to start getting back on track. Its similar to previous weeks although the alcohol cagetory is currently empty. Although this is a bit of wishful thinking we had a BBQ over the weekend and the net result was that we ended up with some extra so the goal for the week is to use this up rather than buying more. My goal will be to not to spend any extra in this category.

The other categories are pretty similar to what they’ve been in the past. I am writing this a bit late since I already spent 20 on eating out for lunch but I rarely do anything for lunch and thought it would be a good way to socialize with coworkers. Not the best way to spend my money I know but there are times when spending a little bit of money can go a long way.

I am also going to do something a little different this week in that if I can meet this weeks budget I am going to buy myself a new book. I have been eyeing Leo Babauta’s The Power of Less and if I can meet my goal of $195 then I will buy myself the book to read. This little reward might be counter intuitive but I want to reinforce budgeting in myself and this week I’ll make it simple (or at least plan to) and make it harder from here on in.

This last month I managed to post only once to the blog even though a lot has happened. There were a couple times where I wanted to post something but life got busy and other times where I was being introspective and didn’t want to force a post. For me posting on the site has always been something that I enjoy and I didn’t want to force myself to write something for the sake of posting.

One of the things I noticed in the month pretty much absent of posts is that I did miss it. My writing on this site has been tied directly to what is happening in my life; during the times that I am incredibly busy I tend not to write and when I manage to have some time freed up I write a bit more frequently. Realizing that I do in fact enjoy writing on the site and want it to be successful I am going to have to make a few changes and one of them is the consistency.

The battle to get things done has been one I have always struggled with and I have finally gotten David Allen’s Getting things done and I have been reading it. Knowing that I want to continue this site and grow it I believe that in the process of becoming more organized I will be able to bring some consistency back to this site. For those of you you’ve missed my sporadic posts - I’m sorry the plan is to make them much more regular.