How Do You Allocate Your Money?

[jasperandchar]

In your situation I don't believe you should be contributing to an emergency fund as you are currently if I dare say "an emergency" as is again just my 2 cents and not meaning to offend I've lived one as well so I can speak from experience.

It's great that you and your spouse/partner are able to have these open discussions as many families are torn apart or divorce/separate because of the financial crisis' in their lives. Your kids would rather you focus on their future in due time if and when that is a possibility and remain together than focus on them in a sense of having a roof over their heads, food in their bellies and parents that truly love them by putting their family first rather than a college/university education at a cost that is currently not feasible.

Here's a thought you and your dh should come up with a mantra, have it visible and repeat over and over until it's ingrained in your minds and it's a constant reminder of what can be and what will be...

Also make a 5 year plan just for fun and a road map of the future that lies ahead, include milestones to keep momentum and keep it visible.

As a parent of 2 boys ages 12 & 14, they were made aware of some of the financial realities not the grim side but included in the future plans of our financial journey. Some things were no included in our shopping trips and now my kids are very financial prudent in choosing how to spend their own money. Money does not come easy but it sure can be spent quickly.

[maggiespice]

But not to have an Emergency fund would not only be foolish, but irresponsible, no? (For example, a situation came up this year with my extended family and let me tell you those that did not have an Emergency fund that they could draw on, let's just say it wasn't good. I do have so I was not put in the position that some of my other family members were in........)

[jasperandchar]

But not to have an Emergency fund would not only be foolish, but irresponsible, no? (For example, a situation came up this year with my extended family and let me tell you those that did not have an Emergency fund that they could draw on, let's just say it wasn't good. I do have so I was not put in the position that some of my other family members were in........)

Everyone is entitled to their opinion. Emergency funds are not something that my parents or further more even grandparents had, it's all about priorities and cashflow. Many people may have emergency funds but if you ask them what they are for, you will get very different answers. Some may say to include a serious car repair expense but then others may have a car repair fund, etc....the list can go on and on. I believe an emergency fund is "generally" created for crisis's such as job losses but again everyone uses their emergency fund for various things....again just my 2 cents.

[wimbly11]

Everyone is raising some amazing points here! So on Friday DH called the CC company. We asked for a lower interest rate. We ended up getting a LOC from the CC company to cover the CC and another loan and the interest rate is dropping 10%! This is going to save us immense interest and we will be putting way more on the principal and will be able to pay this off so much faster. We were so happy!!

Weve re decided for the moment to contribute everything we can do our debt. We have some in savings to fall back on, but if we take the CC payment and what we were paying on this other loan we can get rid of this is about a year and a half. Before we were looking at three years for just the CC at our current rate! That will leave a personL family loan ( no interest) that we will pay off then. I'm feeling like s can breathe a little better at the moment. Once that happens we will start focusing on our RRSPs, education funds and an emergency fund.

[jasperandchar]

Everyone is raising some amazing points here! So on Friday DH called the CC company. We asked for a lower interest rate. We ended up getting a LOC from the CC company to cover the CC and another loan and the interest rate is dropping 10%! This is going to save us immense interest and we will be putting way more on the principal and will be able to pay this off so much faster. We were so happy!!

Weve re decided for the moment to contribute everything we can do our debt. We have some in savings to fall back on, but if we take the CC payment and what we were paying on this other loan we can get rid of this is about a year and a half. Before we were looking at three years for just the CC at our current rate! That will leave a personL family loan ( no interest) that we will pay off then. I'm feeling like s can breathe a little better at the moment. Once that happens we will start focusing on our RRSPs, education funds and an emergency fund.

A big heartfelt congratulations to you and your family. Glad to hear you have made immense progress in such a short while.

All things will fall into place in time, I'm sure you will both sleep so much better with such a weight lifted off your shoulders.

Just a piece of advice, perhaps see if your bank would be willing to offer you a loc with a lower rate, great news all around

[jasperandchar]

@wimbly11 not meaning to high jack your thread but I thought you might want to read comments for a thread I created inspired by many comments on your thread re" emergency funds, as we all have different opinions of what an emergency is.

Just created the thread so it may take a while to get some comments

http://forum.smartcanucks.ca/406240-...rgency-canada/

[lilo0003]

Wimby: this is great news. The early years of a family are tough but it gets better. Financially the darkest time for us was before we had our second child and DH was working contract. It was a lot of work but we survived and learned a lot about our relationship. now that little one is about to turn 12 and we honestly only worry about funding our retirement and the kids RESPs. But I would not change that period of our lives for all the lessons we learned.

[wimbly11]

Thanks everyone. I finally feel like there's a solid plan that won't take five years to accomplish

[super807]

Everyone is raising some amazing points here! So on Friday DH called the CC company. We asked for a lower interest rate. We ended up getting a LOC from the CC company to cover the CC and another loan and the interest rate is dropping 10%! This is going to save us immense interest and we will be putting way more on the principal and will be able to pay this off so much faster. We were so happy!!

Weve re decided for the moment to contribute everything we can do our debt. We have some in savings to fall back on, but if we take the CC payment and what we were paying on this other loan we can get rid of this is about a year and a half. Before we were looking at three years for just the CC at our current rate! That will leave a personL family loan ( no interest) that we will pay off then. I'm feeling like s can breathe a little better at the moment. Once that happens we will start focusing on our RRSPs, education funds and an emergency fund.

This is great to hear. Paying off that debt sooner will save you money and worry.

One word of caution: From your statement, it seems as though you may now have a larger amount of credit at your disposal than before your dh called cc company (from the line of credit and extra loan). Be very careful with that, as when things start to feel less like a crisis, or if you encounter other difficulties, you could end up getting into a larger amount of debt than you are in at the moment. I think that part of staying out of consumer debt comes from a shift in mindset that brings you to a point of only spending money you have, not using credit as an extra bank.

[wimbly11]

We have definitely already changed our thinking months ago. We still had lots of room on the CC but had stopped using it completely. Whereas before we were using it every month. I know we won't dip into this extra credit because we have really dedicated ourselves to this process