The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
As the year is drawing to a close, I thought I would look back on my challenges for 2013. The challenges turned out to be not that bad. I’m sure when I wrote that post these items seemed more challenging, but life has a way of working itself out.
I had been worried about how I was going to pay off my son’s leftover medical bills. The $5,000 we had left over was on a credit card with an expiring 0% interest rate. This bill was effectively wiped out when I received my annual bonus this year. The bonus was larger than I was expecting and more than took care of the bill. This year we have even managed to eliminate my wife’s student loans. We had owed about $10,000 on her loans when the year started and have since paid them off. We still have 2 outstanding loan obligations, our mortgage and car loan. I am not concerned about paying either of them off anytime soon. Both of them have a reasonable interest rate, 3.75% for the house and 1.99% for the car. Since neither of them impacts our monthly spending adversely, I am happy to direct our cash flow to other important areas.
My concern here was helping my mother with her medical bills. What scared me the most about the bills was the uncertainty surrounding them. Without having any idea of what would be coming down the road and how much it might cost, I was nervous. In the end, it did not matter. After an unsuccessful round of chemotherapy, my mother choose to discontinue any further treatment. I was able to sneak down (she lived about 3-4 hours from me) and see her again before she passed in February. Since that time, the concern hasn’t been financial per se, but rather in closing out her estate. We filed the estate tax return and have closed everything down. I will detail what I have done with the inheritance in a later post. Even though mom had financial problems, there was still something leftover for her kids.
To begin 2013, I had hoped to find ways to trim my expenses down even further. I was hoping to keep everything more or less the same, just pay less for it. In the end, I didn’t find anything to save on, but I did free up some cash by paying off my wife’s student loans. That allowed me to create about $140 a month in extra cash flow. The extra money went to mainly shoring up the monthly budget. I had been under-budgeting the food expenses for several months. The extra cash allowed me to shore up that segment. I was also able to start setting aside some extra money for expenses associated with my kids. Now that my daughter is in kindergarten, more and more things seem to be popping up that cost money. Setting aside the extra cash will help me keep the budget in line.
In the end, I am going to end the year in a more stable position financially than when it started. This new stability has enabled me to take advantage of some things that I couldn’t before. I am enrolling in a health-care savings account next year and will be maxing out the contribution. That means I will be saving an additional $6,550 next year. Some of that will be spent on actual medical expenses, but I should be able to save at least half of that amount for future expenses. I had considered that option a few years ago, but not having at decent-sized emergency fund made me hesitant to take on the additional risk. How are your finances set to finish the year?