I Can’t Ignore the Savings Monster

A number of weeks ago, I mused about the challenges of tackling all the money monsters at once: paying off debt; saving for emergencies; saving for retirement; saving for the kids post-secondary; putting away money for home repairs, etc.

This has really been on my mind. I compared it to a horse race. Imagine being at a horse race when the bell rings, and two horses come screaming out of the gates and the rest are just standing there in their stalls. Wouldn’t you stand up in your seats and yell “hey, what’s going on? This isn’t how it’s supposed to turn out!”

Now, I’m reading Gail Vaz-Oxlade’s book Debt-Free Forever. It’s been on my reading list since it came out a few months ago. I watch her show, ‘Til Debt do us Part religiously, and even watch re-runs incase I pick up one tiny tidbit of advice that I can use.

Last night I picked up the book. I’m almost done it this morning.

It’s more and more clear to me that I must back off my debt-reduction payments, and put a little bit of money into retirement savings, emergency savings, and home repair savings. According to Vaz-Oxlade, if you don’t have savings in your budget, your budget doesn’t balance. No excuses.

My budget has money put aside for both kids’ post-secondary needs. It may not be enough, but I’m a single parent, and there’s still another parent who has a fiscal responsibility to contribute. I’m happy with the amount I’m putting away for them at $250 a month, each. My youngest has almost $11,000 saved on an RESP. While it sounds like a good amount, it’s likely not enough because she’ll be 17 this year. Only one more year of high school left. Still, it’s better than a kick in the teeth.

The eldest has already completed one post-secondary stint, and is now brushing up on a few pre-requisites to pursue her new goal, which could spell another five years of school, starting in September 2011. Since she’s twenty-something, I’m going to be leaning on her pretty hard to earn and save for her own education as well. Yes, I’ll help, but she has to pull her own weight.

At 46, I can’t ignore my retirement needs any longer. I have some savings, and with the help of my financial dude, we’ve just re-jigged things a bit.

I’m in charge of my own cash flow. I drafted my budget, and I can re-draft it. Even if I contribute a pathetic amount, it must be at least $100 a month, and that expense must be fixed. Non-negotiable. Immovable. Carved-in-stone.

Once the debt is paid off, I can put more towards retirement and emergencies to bring-up the rear. Meanwhile, I’m convinced the cost is too great to focus solely on debt retirement, at the exclusivity of putting money away for me for the future. After all, it’s my future (and my kids) that I’m trying to make more stable. Why jeopardize my future self by not ensuring that I have enough to live on for the estimated 22 years I may live without working for a living?

So, as March comes to a close, I realize that I have learned a lot in the first three months of the year. I can live without a lot of stuff (that I don’t really need anyway), I can create a budget and stick to it, and I can change that budget when I realize I’ve been a dope and I need to have a more balanced view.

So what if the debt is paid off in 18 months instead of 12? The goal here is to pay off the debt and stay the hell out of it. How can I stay out of it if I don’t at least start to create a cushion for myself? Truth is, I can’t. I need to start now to create success for myself when the debt is gone.

Phew. It took a lot of whining for me to get to here! It truly is a journey.

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