Money Monday: Working the Program



It was a little like Christmas last Monday.

It was payday and unfortunately, (or fortunately) we had followed FPU's philosophy of allocating our budget down to zero. Although we did what we were supposed to do, taking your checking account down to zero is not really a good idea (or easy on the ol' ticker either).

Because we haven't had enough time to create any "sinking funds" yet for various envelope items -- thereby creating "savings" of sorts in our checking account for various envelopes -- we had the classic, "more month than money."

To be completely honest here (and I feel like we should be), we cheated a bit last month. We did a Ramsey no-no and used a credit card to float us one day until payday. We were out of milk and some other essentials. We are supposed to eventually cut up our card(s) -- and we will. This has shown us how easy it is to fall back into bad habits. In hindsight, we should have at least used our emergency fund (although it wasn't completely funded then) to tide us over. It's funny how now that we have one for the first time ever, I feel reluctant to tap into it.

So, there you go. Full disclosure.

Anyhow...back to Christmas.

After feeling like we were in a financial desert for the last 10 days or so (although we have been able to utilize a lot of what we already had which was great), it was fabulous to have plenty of money once again -- if only for another couple of weeks.

I've spent the last few days since then shopping up a storm stocking our pantry, fridge and outside freezer. I also went on a monster shopping spree at Target and bought household items, some groceries, and some apparel and cosmetic items that were fully budgeted for. And that's a great feeling -- to be able to enjoy the shopping process knowing that you are fully and totally spending within your allotted envelope/budget.

And actually, it's even better to be able to save more (and sometimes purchase more) by using coupons. I'm not sure if I've mentioned that I am a couponer yet, but I am! Spending a few hours a month by printing, clipping and organizing coupons and matching them up with local deals has saved our family a lot of money. With food prices on the rise, it's made it possible for us to buy the groceries we need and some of what we want.

On that huge shopping trip, I scored some major deals on my purchases. I was able to get all our apparel items either on sale or was able to use a coupon. But as I turned into the women's clothing department to look for a sweater for myself (completely in the budgeted envelope mind you), the most amazing sweater caught my eye.

It was gorgeous. I loved the colors, the cut, how soft it was...everything! I tried it on and looked in the mirror and was instantly in sweater love. Then I looked at the price tag. Although Target clothing is extremely affordable, this Mossimo sweater shrug was not on sale. It was a hearty $29.99, which may not be a lot to you, but to a bargain shopper, it's almost outrageous. I looked at my $4 off coupon and applied the discount an got stuck on the price. So, I put it back.

But I continued to stand there.

And then I thought about the last time I had ever bought something in a store that wasn't on clearance or on some sort of sale or promotion. I couldn't remember that far back. I started reasoning with myself. The coupon would be good for another couple of weeks. Potentially I could wait, hope the sweater would go on sale, and that they would have my size.

But, what if they didn't?

Could I take that chance with the object of my affection?

I thought about it and how much I had in my clothing envelope and decided to buy it. After all, what's the point of saving and putting money aside if you can't buy something you love at full price every once in awhile. (And the funny thing is that it wasn't technically full price because of the $4 coupon -- I'm just so trained to use the coupon on a sale item, that it feels like full price when I'm not!)

Enjoying my super soft new sweater

It just goes to show that you can splurge when you're working the program. You just have to make sure you have the funds allocated in your envelope.

Another fun thing last week was that my new, shiny Libman mop arrived just as the rep from their company promised. I just love free stuff!


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Now onto last night's lesson, "Clause and Effect: The Role of Insurance in Your Financial Plan."

I'm just going to admit that I didn't go into this lesson completely excited. It's really hard to work up some enthusiasm to listen to facts and information on life insurance, health insurance, disability insurance...you get the idea.

However, I know it's really important to be in "the know" on this subject and to also have what we need to survive a catastrophic event. I also know of friends and family who have lost a spouse or had an elderly parent's stay in a nursing home eat up all of their savings. But, it's much like many other things in our lives...we don't really think it will happen to us. So, we gamble so to speak.

However, Ramsey makes the point that it's dangerous (and irresponsible) to gamble with your life...and it's worse to gamble with those whom you would leave behind to pay off that debt.

So, he recommends these basic insurances:

1. Homeowner's or Renter's Insurance - annually assess if you have enough (and not more) than you need
2. Auto Insurance - carry adequate liability and consider dropping collision on older cars
3. Health Insurance - he recommends using a HSA (Health Savings Acct) if you can and it makes sense
4. Disability Insurance - he highly recommends this to replace income lost due to injury or illness
5. Long-term care insurance - for the nursing home stay, hospice or in-home care
6. Identity Theft Protection - without this, you can spend an estimated 600 hrs trying to prove you're you
7. Life Insurance - buy term, not a cash value plan -- "self-insure" with your savings after the term expires

There is so much more to this then what I've listed above, but I don't have the space, and I don't think you have the inclination to read it all anyway. I would highly recommend this class (and the entire course) as a way  to educate yourself to what's really essential.

At the very least, Ramsey urged us to dig out that life insurance policy (that hopefully we all have) and really look at it to see if it's enough. He recommends buying a policy that is 10 times your current salary. That way once it is paid out and if invested at 10-12%, the annual interest would replace your lost income.

And being a stay-at-home mom, I liked this, "a stay-at-home mom brings enormous economic value to a home. If something were to happen to her, dad would need the money to replace part of what mom does."

Boo-ya!

So, make sure that you cover us moms enough to hire a cleaning lady, or as Ramsey said, "Mary Poppins!"

The other recommendation to have done yesterday is to get that disability insurance and he recommends a site called Zander to browse your insurance needs.

So...that's that. None of us want to think about dying and leaving behind a family. But none of us want to think about leaving behind a family that will struggle and suffer with the knowledge that we didn't properly plan for them either.

Bite the bullet and dive in to the somewhat dull waters of insurance.

You (and your family) will be glad you did.


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Related Posts About Our Financial Peace Journey (in order):
http://www.mosaicmomma.net/2011/10/financial-peace.html
http://www.mosaicmomma.net/2011/10/my-god-wink.html
http://www.mosaicmomma.net/2011/10/peace-like-river.html
http://www.mosaicmomma.net/2011/10/introducingmoney-monday.html
http://www.mosaicmomma.net/2011/10/introducingmoney-monday-part-two.html
http://www.mosaicmomma.net/2011/10/money-monday-making-tough-decisions.html
http://www.mosaicmomma.net/2011/10/money-monday-utilizing-what-youve-got.html

For more info on Financial Peace, visit:
http://www.daveramsey.com/fpu/preview/


For info on Inzolo -- an online and mobile "envelope system," tool, visit:
www.inzolo.com

For more info on The Blessed Life, visit:
http://theblessedlife.com/

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