When Your Financial Plan Takes A Detour It Doesn’t Imply Failure

They call it personal finance for a reason. Each individual plan, will at times need a tweak here and there depending on your circumstances.  Today I want to share with you how we have taken a detour, but for good reasons.  No plan is bad as long as you are reaching your financial goals in the process.

As most of you know, this Wednesday, we will be introduced to our new little man Noah.  This has caused us to re-evaluate our goals as it is related to our current place in our financial plan.

We have recently become debt free so we are currently on baby step 3 of our Total Money Makeover—saving $15,000 to fully fund our emergency fund.  We still fully intend to reach this same goal but have decided to take a detour to better serve our current needs.

We currently have $1300 in our ING Direct online savings account. (We had just over $1600 up until I got sick, and then we had to use some because I had to take off an entire week, which was completely unexpected.)  It’s why they call them emergencies and it is precisely why you need an emergency fund.  We used a little over $300 of our savings, but who cares?  We are still in great shape, and here’s the best part—we didn’t have to borrow a stinking dime to help us through our unexpected chain of events.

My wife, Mrs. Enemy of Debt Lite, (<~~I say that because I am the insanely motivated and extremely hardcore driven maniac) is taking off an entire 3 months after delivery.    We are very excited about this but it is part of why we needed to make some adjustments.  She will not get a full paycheck the entire time although it will be pretty close to full at the very beginning.  Each month the amount of pay declines until the third month, which is when she will need to use her accumulated leave of absence days.  She will run a little short on PTO time, meaning no pay at all eventually.  No problem!  Since we knew she would be taking the entire 3 months off we planned for this.

Aside from that I am taking off 4 weeks myself—from the middle of December to the middle of January.  The only difference is that I will not be paid at all.  I would like to point out that this is why we were so hyped and motivated to get our debt paid off before baby Noah’s arrival.  Not having debt gives you options, and I must say that I know a lot of people that would not financially be able to take off time like we have decided to do.  This is our balance.  We value being able to spend more time with each other, especially at such a wonderful moment in our life.  Being debt free, with no payments, is COMPLETELY AWESOME!

With that said, we have made a few tweaks to our plan to ensure that we do not experience financial trouble, just in case life decides that we are too happy. 

We have:

• $1300 in our emergency fund
• $750 in cash, some of which will be added to:
• our sinking fund that is located in a regular savings account which holds $150

We plan to keep $500 in cash on hand for liquidity purposes.  The regular savings account is simply a buffer to give us some additional security.  Thanks to my delivery job for making this possible as I had a record week.  I worked 4 days, 30 hours, and took somewhere around 84 deliveries for a total weekly bring home of $712.  Have you thought about ways of earning extra money?  Try delivering pizza!

On top of all that massive change, we have also decided to work as hard as we can to pay our mortgage payments through the end of January.  We have already started doing this, and hope to have December and January paid off by the end of November.  We are hoping that by doing this we will keep from having to use our current reserves which will eventually become a part of our emergency fund.  The only thing that will keep us from doing so, is if we have an emergency during this time.  All I can say is, two months of not having to pay any mortgage payments is going to feel great!  Ahhhh!!

I know how it feels to sometimes have to change your plan because something either falls through, or you forgot about something.  In the past I have beaten myself up pretty bad, but lately I have tried to adopt a more positive outlook to even the most negative of situations.  It doesn’t help to get overly stressed about something you cannot control.  The key is to take those lemons and make lemonade.

There are three reasons I wanted to share this with you.

I wanted to:

• encourage proper planning to increase preparedness.
• emphasize the flexibility that comes with being debt free.
• inspire you to find the balance in your life that will make this process worth it.

In conclusion, I want you to try and practice following the 3 A’s approach to handling any change in direction, not only when dealing with your finances, but change in general.

• Analyze
• Adjust
• Act

Also keep in mind the 5 P’s!

“Proper Planning Prevents Poor Performance” – Brian Tracy

Good luck and enjoy your lemonade!