All of the nitty gritty budget information is coming up, but first I just want to say that I . . . feel so good! I've been working on my Christmas giving (the donations that I want to make with the remainder of our holiday budget) & I've been loving it! I picked three names off of the giving tree at work, & tried to choose kids who were similar in age to my boys. The boys & I went shopping last night to purchase the items - a pillow pet & a beyblade. I loved their enthusiasm & excitement to help someone else. And, a friend posted on Facebook last night about a family in need, so I mailed a check. It was small, but it just made me feel so dang good inside. Sometimes I need these reminders of how lucky we are as a family, & how important it is to help others this time of year. The rest of the money will be sent to the local food bank!
As you might remember, I had all kinds of fabulous plans for the 2013 budget. Then, we had to come up with $16,000 in two weeks, and I was sent back to the drawing board.
Picture me here with a super grouchy look on my face.
After an appropriate period of feeling sad that my beautiful plan was blown to bits, I went back to work. The best part of setting the budget this year is that I dutifully tracked all of our expenses in 2012, & actually know how we spend money. This is a huge change from prior years, where I kept a rough list of what I wanted to spend in each category, but never actually tracked it. And, I'll let you in on a little secret - - there was a big difference between the two. :-)
2012 was a fabulous year, but it was also very expensive. We're buckling down in 2013, & have lots of areas for cutbacks. By bringing our monthly expenses inline with our ACTUAL monthly income (vs relying on bonuses & stock vests), we obviously are being more fiscally responsible, but when those bonuses/stock vests come, we can take those sizable chunks & use them to make big progress on our other priorities: mortgage pay downs, college funds, travel, & remodeling our house. It will definitely be a challenge, but worth it.
Rather than dumping the entire budget categorization into one post (there are 22), which I'm thinking will bore you silly, I thought it would be more fun (ha, budget fun :-)) to cover one topic per day in December, & cut to the chase today. If we follow the plan I'll be outlining for 2013 stick to our budget numbers, we'll be cutting just over $2000/month off of our standard expenses, not counting any potential changes to our refinances.
And, without further ado, here's the first budget category topic:
Home mortgage/interest rates:
We are hoping to make substantial cuts in our interest payments (via our mortgages) by refinancing. Rates are crazy low, & I think it will payoff, but we're working with a broker & running the numbers. Given our extensive investments in real estate, even a small rate change can make a huge difference over the life of the loan. Although this is not counted in the aforementioned $2K/month in cuts, we're hoping to be able to shave $700 or $800 off of our interest payments per month.
And, a little analysis of the "why" we're making changes to this budget category:
This one is easy. Who wants to spend extra money at the bank? Other categories will be infinitely more interesting & up for discussion. Our incentive - if we are able to secure lower rates across both properties, it's much more likely we can keep our vacation house.
Who wouldn't want to keep a house where this is right outside your door?
How is your 2013 budget planning coming? Are you ready? What areas are you planning on cutting or increasing?