Good morning all....
First....thanks for taking the time to read this; this forum has helped my family tremendously, and we've made huge strides towards getting off the consumer merry-go-round and making a bee-line for the smaller and smarter camp of the debt-free/financially secure.
We've been actually living on a budget (gasp!) for over a year now, and it's been really successful in helping us adjust to living within our means, making savings a non-negotiable expense, setting up an e-fund, projecting future expenses, and really forcing us to evaluate our financial priorities. Along the way, as happens to everyone, life throws curveballs every once in a while. We had to do major repairs on both cars (at the same time) that weren't expected, hubby had to take a few days off work due to injury (no work, no pay for him), water pump in the well failed, etc, etc. Whatever. It happens, and we muscled through it, without having to resort to credit, which I'm actually quite proud of, because two years ago it never would have even occurred to me to not pull out the credit card. :)
But...right now I'm a little nervous, because the e-fund is really low. Practically non-existant, in fact, and that scares the crap out of me, because if something happened right now, we'd have to dip into credit to fix whatever the problem is. We've also got around 10K of leftover pre-mustachian debt, which is sitting at 0% (balance transfers have worked great for us for maxing out the value of our debt payments), and we've been throwing everything spare at that great big zit, because it's driving us insane to have it there as a reminder of past spending habits.
So, I've spent some time with my trusty excel spreadsheet sheet and worked out a plan that, in theory, would get us debt-free (bar mortgage) and with a relatively decent e-fund by December 2013. Because the e-fund is more important to me (peace of mind) than getting rid of the debt (annoying but manageable) I've focused on that first. However, we got smacked by a couple of curveballs again in the last week and now I'm wondering if I've made the right decisions.
1. Our trailer has suffered four blown tires in the last month. The first two were old, so ok, but after the two brand new ones went as well, we took it apart and discovered the axle was damaged, as well as the bearings. We use this trailer extensively to collect free firewood for heating in the winter, which saves us over $3000 a year in electricity. We also use it for hauling bear, deer, and anything else hubby can shoot for meat. Sigh.
2. The jeep needs new u-bolts in the front suspension. Safety issue. Sigh.
3. I've been trying to sell my motorcycle since spring; there's been little interest, but I finally got someone who's ready to make an offer...if it's certifiable. It's not, although getting the parts to make it certifiable would not be expensive or difficult to replace. Sigh.
On the plus side, I had forgotten about some extra work I had done at work and was pleasantly surprised to find the pay stub on my desk the other day. I've also got an acting assignment coming up that'll produce a similar cheque in a few weekss time. It's large enough to make some of the repairs, but not all, not and still be able to put some into the e-fund.
So I guess my question is how would you divy up extra funds? I read with interest a post the other day from someone who now looks at pay raises as extra means to save. My first thought was to put the whole amount into the e-fund immediately, but hubby and I are both ex-professional mariners and planned maintenance of assets is entrenched in our psyche. There's just so much preventative maintenance that needs to be done around here (that we've been putting off due to lack of liquidity) that I'm afraid that if we don't start some of it, it'll cost us more in the long run. And in the case of the motorcycle, if I throw some money into getting it fixed, I could possibly end up a few thousand dollars ahead....but there's no guarantee because the market's dried up and it's the wrong time of year, and the money for parts could be more useful in the short term elsewhere.
I know this is a short-term problem, until we can no longer see the bottom of the e-fund barrel, as it were, but right now we need to find a balance to liquidity for unforseen problems vs problems that can be seen already...and may get bigger faster than we want. And I'm talking about non-safety related issues here....anything to do with safety gets dealt with right away. That's not something we're willing to risk the consequences of not dealing with immediately.
What's your balance? How would other mustachians approach this? TIA.... :)