This post will probably sound like I’m bragging, but I’m not. Instead, I’m realizing how wonderful it is to have breathing room in the budget. To be able to pay for things and not worry about it.
Two examples from last week:
My husband was driving home from the hardware store the other day and pulled his car charger out of the lighter socket. The socket came with it! So, to the shop we went. He also needed his 90,ooo mile service, and they discovered the lighter had blown a fuse. The bill came to $544. We put it on our Goodyear card to take advantage of the six months same as cash deal, because we like to do that when we can, but we could have paid cash for the bill right then. It was nice to have a choice.
We realized that we’d surpassed our emergency fund goal without meaning to. So, we took a look at the budget. We also discovered that we won’t need to dip into the fund to pay upcoming insurance and property tax bills. So, now we can start contributing to Roth IRA plans! It is so nice to have that cushion.
The Beauty of the Cash Surplus
We’re still pretty frugal, but we like having a surplus. It gives us freedom. Now, we’re not likely to run off to Paris for the weekend because we can, but it does allow us to buy living room rugs without worrying about how we’ll pay for it or saving up for months. When my husband finally decides which iPod he wants to replace his dead seven-year-old iPod, we can just buy it.
How We Got Here
It didn’t happen overnight. We started by paying down $40,000 in debt. We still have a hefty pile of student loan debt, but that’s amortized over 30 years and we prefer to focus on retirement savings instead of paying down low-interest loans that can be deferred if necessary.
It also required a change in habits. My husband is less likely to buy stuff than he used to be. I bake less than I used to. We don’t go out very often (partly because we have very little interest in most of the movies that come out these days, and partly because dining out is hard for me, and partly because we’re so busy doing house stuff!)
Tax credits (like the homebuyer credit) and tax refunds helped boost our emergency fund and windfalls helped pay off that debt. We’ve streamlined expenses where we can.
Finally, we got there through income growth. Our income has grown by 600% from the year we got married when we were both grad students and I was only working part time. That’s no doubt the largest contributor to our surplus, but we wouldn’t have it if we’d let our spending increase with our income. Instead of applying for the largest mortgage we were told we could afford, we opted for something we knew we could comfortably afford. Instead of going on a spending spree when we moved in, we shopped carefully and found a good mix of high-quality affordable pieces that will last a while. Instead of rushing out to landscape the front and back yards, we did it over time.
We still budget our expenses each month to make sure we can cover them and plan for large purchases, but I haven’t run out our costs recently to see where we need to cut. I should, I’m sure there are areas where expenses have crept up, but I’m not as worried about it as I used to be. And that’s the real joy of having breathing room in the budget – peace of mind. You can’t buy that.