Priorities - Money 101

There is a fabulous series of educational articles called Money 101 on the CNN site.  I stumbled across them when I was Googling money tips. I really want to stop this vicious cycle we're in, and I know I don't have the knowledge of how to do it myself.

The first step in this series is setting priorities. I knew we had some goals we wanted to reach, but they just felt like words on paper... completely unattainable, even the easier ones.  Stuff just always seemed to happen and we never reached them. Well, this lesson helped me understand the goals, which ones were realistic and which weren't, as well as deciding which ones were really the MOST important to us. They have a great tool where you enter a different goal into each field, up to 15, then it goes through several pages of giving you a choice between just two of them, and you have to select which of those two is most important. In the end, it finally gives you the list in order of how you ranked them compared to each other.

I did the list and then sent it to my husband in an email, and he did it last night. It was interesting to see how they were different. Like I had contributing to his 401k as #3, he listed it as last. When I asked why on earth he wanted to wait so long to start that (yeah yeah we're already 40 and should have been contributing for years.  I know I know)... and he said it was because his company was not matching contributions yet.  It had stopped when they had to file bankruptcy and had not started matching again, and no one was sure they were going to. My company doesn't even have a 401k, so that method of savings is not really going to be an option for us.  Since it won't be matched, we need to find a better way to save our money rather than just giving it to his company to use.

Another difference was I had paying off the cash advances as the first thing since they are costing us $240 a month in fees.  (just typing that makes me cringe.)  He had it as number 2.  His first thing was getting old medical bills paid off.  He said he was very upset when he went to his urologist for his annual appointment to have the growth on his kidney checked on, and they said the doctor would not see him until his previous bill had been paid.  Hubby would have paid it right then, but they didn't have it anymore, it had been sent to collections. He was not happy with me when that happened. He leaves all the bill paying to me, and basically washes his hands of it, so I would rather not take ALL the fault,... but yeah it's my fault.

I seem to have a serious issue with medical bills. I never really used to.  The few times we went to a Dr. the insurance usually covered everything but the copay and I'd pay then at the window. So, never an issue... until the ONE year we decided not to get health insurance because it was so expensive and we had barely used it the last few years...  that would OF COURSE be the year he had a heart attack. By the end of that year we had accumulated nearly $200,000 in medical bills. The hospital charity took care of $93,000 of it, but the rest was up to us.  So yeah by the end of that year I'd been billed and billed again and then basically harassed over the medical bills.  Just the Wings Air Rescue ride to the Cardiac Hospital was $11,000. Needless to say, we had to file for bankruptcy.   Anyway, that's a long story to tell you, I kind of have a psychosis about medical bills? Like maybe I feel like they are never able to be paid, even though most are under $20, some under $10.

 SO, I am redoing the budget for the 3rd time now. We're going to pay off the more important medical bills which come to just about $630 and one of the cash advances... then the following month we'll pay off the other 3 cash advances then pay the rest of the medical bills (another $260 or so).

That priorities tool really helped Hubby and I be able to talk about bills and goals and what's important to us.  Like one of the things was to get him a really nice smart phone with a good data plan so he can view websites and email and texts etc at work on his breaks, plus it would be a GPS when needed (and he needs it!).  Hubby doesn't list that very high on his list, but I do. I want him to feel more confident and successful, and I know when he had his previous phone he really loved it. He hates his Blackberry and our 14 yr old is constantly stealing it anyway.  He feels it's not important and he's not worth having money spent on him when there are other bills.  But I've given in on two of them, I'm getting this priority.

The rest of them, we're kind of the same on. The credit cards need to get paid off and we need a new vehicle, and we need to get $500 into an emergency fund, then build it to $1000, and eventually have 4 months of his salary in a savings account earning a good interest but we can still access it for emergencies (mainly if he or I get laid off).

Paying off the house early is not high on his list, and I know it's not necessary as long as we're on time every month. Also, buying a piece of land and moving the trailer to the land... he doesn't want to do that until all the kids are out of school. That's 10 years from now.  It's one of those goals we can always come back to in a few years' time and see how we feel about it then.  Who knows, maybe we'll find a great deal on land, or maybe we'll find an offer to trade in this house for a newer one set up on land already.  I like the idea of having our house paid off so that's not constantly over my head... but I guess it's what most of America does, so I'll learn to deal with it.

So, here's  the new revised list of our priorities: (the scores are irrelevant here, they're leftover from the first list and I didn't remove them)

1.
pay off most of old medical bills 
100
2.
Pay off cash advances 
92.3
3.
put $500 in emergency fund
84.6
4.
pay off cancelled credit cards    
76.9
5.
Get CPC a Droid with unlimited plan
69.2
6.
Pay off rent to own items
61.5
7.
Build emergency fund to $1000
53.8
8.
Buy a newer more reliable vehicle
46.2
9.
Put $1000+ into CDs
38.5
10.
Build 4 months of my salary in savings
24.4
11.
Build 4 months of husband's salary in savings
21.8
12.
Start an IRA or other retirement fund.
15.4
13.
Pay off house in 3 years instead of 6
9
14.
Buy land to move mobile home to after it's paid off
6.4

 So, sitting here in front of me on my desk are the medical bills we're going to be paying off first.  I'm oddly excited about it.  There are so many envelopes and they constitute probably 2/3 of the bills in my bill basket. Some of them I had 4 and 5 copies of... isn't that terrible?

I think my ultimate goal would be to be able to pay all our bills the day they come in the mail, and actually have the money available to pay them. That's pretty much how my Mom did it... it just took me 20 years to catch on.

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