Financial Blindness

I’ve thought for a while that I’m pretty good with my finances. I watch my spending, balance my credit card statements and pay it off in full every month, have been paying down my student loans, keep track of our spending on the computer and live within my means. Part-way through Gail Vaz-Oxlade’s Debt-Free Forever (picked up at the library yesterday) I realized that I have some major financial blind spots: things I thought I knew, thought I did, but suddenly realize I don’t do at all. Here are some I’m planning to do.1. Actually save money. I “save” – don’t spend – but that money still doesn’t go anywhere to grow for the future. I’m going to start regular RRSP contributions and set up an RESP for baby with regular contributions.
2. Make our wills. It’s on my list – now I’ll do it.
3. Actually watch the pennies and dollars. And put them towards something: investments or debt reduction.
4. Make a budget – don’t just track where the money’s gone. Honestly, I’m still not sure if this will happen. I run a rough budget in my head. But since we really don’t spend a lot on fun or variable expenses (or so I think!) my main plan of attack is just don’t buy unless it’s essential. But that brings me to two others:
5. Have a shopping list. And stick with it. Strictly. Hmm. Interesting idea.
6. Watch the big purchases! That seems to be where our spending gets wonky. These purchases include a flat-screen tv (second hand – so we could watch Netflix and relax and avoid renting movies or going to the movies – sadly we can’t get it to work BUT that was the idea); a king-size mattress (also second hand – don’t cringe – with sheets, and totally worth it, significantly improved our quality of life); a sofa/fold-out bed for the back room (yes, second-hand, $50, M bought it and I like it) and the upcoming planned purchase of a camera (you guessed it; second-hand, mainly for me, and yes I view it as essential because we want good pictures of baby and our camera doesn’t take quality pics. And I miss photography). Throw these into a monthly budget regularly and our expenses jump up. For instance, with the new/old piano, we want to tune it and recover the keys (the white part is gone from about 15-20 of them). Legitimate expense, but it’s just one more expense and we need to decide if that is what we want to do with our money.

I’m also planning to look at our spending again and see what we can chop; to make a table of all regular withdrawals from our bank and deposits so we can track flow; and finally, the big one, the one that drives me crazy but that we as a family can’t seem to get together to do: MAKE A PAYMENT ON THE B***** HOUSE LOAN!!! The money we save to pay off that loan is useless if we DON’T MAKE A PAYMENT!!! In the same way that my restricted spending is meaningless if I don’t convert the actual dollars saved into a long-term savings vehicle like and RESP, TFSA, RRSP or other investment.

Debt-free: we want to be there. We just need some more hard work to make it happen. It’s a lifestyle choice for us, for baby, for family.

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