Earlier this year, we finally fully combined our finances to try to join forces and pay down all our debt. We had quite a bit of credit card debt so we were going to mostly focus on paying those down. We set budgets that were strict but accounted for just about everything we normally spend money on: regular bills, birthday/christmas/wedding/baby gifts, insurance & registration, Halloween party, travel, pet expenses, etc. We also each have our weekly allowances to spend on eating out or whatever we want. The plan was to finish paying off the credit cards by the end of this year and have made a pretty good dent in the vehicle amounts too and then within about 2 years from now, have no car payments, no boat payments and no credit card debt. That would leave us with a lot more in our monthly budgets to save up for things we want to do, put towards 401k accounts, pay down our mortgage or whatever else we wanted to use it for (kids maybe?).
Then in March, Ryan convinced me that we should get a new boat (
http://www.quiltedaffair.com/1/post/2013/03/happy-st-pattys-day.html). We talked about it a lot and here's how we decided to get a new boat:
- Our Bayliner worked well for us to go wakeboarding and tubing but it wasn't set up for fishing at all - the tower made it hard to move from the front of the boat to the back and the boat was too small to ever go in the ocean
- The Bayliner had an inboard/outboard motor and was requiring a LOT of maintenance - so much so that Ryan barely even wanted to take the boat out at all
- We had been casually browsing for boats that would meet my wakeboarding expectations AND Ryan's fishing expectations and had a VERY hard time finding one until we found the Starcraft
- As far as our monthly budget was concerned, the new boat payment would be $100/month more than the Bayliner and to get there, Ryan cut $100/month out of his expenses
In addition to the monthly cost, I knew we would want to spend money on the new boat for accessories and such so we agreed to use our Tax Refund to buy those things without impacting our credit cards or monthly budgets. We were doing pretty well - there were of course more things we wanted to get for the boat but we were using our tax refund money wisely and hadn't gone over at all. The trouble started with our upcoming Scalloping Trip:
Last year we went scalloping (http://www.quiltedaffair.com/1/post/2012/09/happy-labor-day.html) over on the west coast of Florida and we are planning to go again this year for fourth of July and we will need to bring our boat (like last year) because the boat rental places out there won't let you go in the bay where the scallops are. When we bought the new boat we chose not to buy a trailer since we would VERY rarely want to drive it somewhere and the trailers are REALLY expensive. So, when I planned out the expenses of the scalloping trip I included $350 to rent a boat trailer for the week. But...Ryan recently decided he would rather buy an inexpensive used trailer instead. I told him we could use a little bit of the boat money and/or the $350 we had planned on trailer rental. He found a trailer on Craigslist that he said was in good condition for only $300 (i think). I agreed that was a good deal and he went down and bought it (so there we used up the money for renting a trailer). Then after he picks it up he tells me it needs new axles which will total $500 more. Yikes! But...when he ordered the axles it ended up being $900...super yikes! But we still had our tax refund money so there went the rest of that (at least it didn't go on a credit card or anything). Ryan did a LOT of hard work replacing the axles and getting everything ready for the new boat. And when he went to put the old wheels on the new axles, guess what? They don't fit! So now we will need new wheels too. AAAAAAHHHH!
My budget! Where will that money come from?? Sadly, I think it means it will have to come out of the money we normally put towards credit cards which will mean we won't get them paid off by the end of the year. I was SUPER depressed about this - it is so hard to stick to a budget but knowing I only had to have this really strict budget until the end of the year when we paid off the credit cards made it so much easier. ***SIGH***
In the meantime, we were planning on using a friend's truck to tow the boat on our scalloping trip (one of our friends coming scalloping has a big enough truck). But as Ryan thought about it more and more, he wanted to have a vehicle capable of towing the boat anytime we needed - especially since we would now have a trailer to tow it on. We talked about it and agreed he would look for a truck that would have a similar or smaller monthly payment and a similar or smaller total loan balance to the amount remaining on his car (~$8k). He looked at a bunch of different vehicles and then last Sunday we finally went and looked at some. Most of the ones we looked at were more like $10k but that was still not too much more expensive than his escape (especially if he put some cash down from his allowance/savings). What we didn't account for was that Ryan ended up being upside down on the value of the escape, the taxes were more than we expected, AND because the used trucks have so many miles and are so old, the banks were only willing to do loans with a short term and a high interest rate ( = expensive monthly payment). By the time we got out the door, we ended up owing double what he owed on the Escape and the monthly payment is double what the Escape was too. Only good thing about the high payment is that it's only a 3 year loan so it will only be one year later than when we would have paid off the escape.
I knew it would be difficult for both of us to combine our finances and work through finances together since we see them differently. Fortunately we have been able to talk through things and come to an agreement - sometimes I still am unhappy with the effects of these agreements but I still agreed to it. Ryan and I aren't buying things the other one said "no way" to. I think the hardest part for us is how different our spending and saving profiles are. Here's what it's like:
- Spends small amounts frequently on things like clothes, home decor, etc. but makes large purchases
- Thinks spending for a rainy day is VERY important and tries to save as much as possible
- Very focused on our "total debt", not just our monthly payments. I want to know when we'll be "debt free" or close. Being free of most our debts would allow much greater flexibility for things like if we had kids, if one of us wanted to stay home, if Ryan came up with an awesome business idea and needed to take a few months off to launch it, if we want to retire before we're 75, etc.
- Goes months without spending ANY money on little extras or unnecessary "stuff" but makes a large purchase around once a year
- Thinks saving is important but frequently uses saved up money to make large purchases
- More focused on the total monthly payments and what we can afford right now, than paying down or paying off all our bills. but we do both agree that the credit cards HAVE to get paid off
So most likely, I worry too much about finances and Ryan worries too little - like most other things, we balance each other out nicely. Well thanks for letting me vent my budget concerns to you guys, what are your favorite budget tips? One my mom shared was that they try to never have more than one car payment at a time (so if one of them has a new car & payment, the other has to wait to get a new car until that one is paid off). Do you guys have any cool tips that have been working for you?
Finally, let's end on a happy note. Ryan was able to find a truck that is very good value for what we paid, clean and comfortable inside and exactly what he wanted. he's so happy with his new truck and I'm happy he got what he wanted to drive :)