The State of Our Finances (part 1 of 4)

One of the purposes of my blogging is to motivate myself to pay off our debts.  However, I have no intentions of making this solely a “get out of debt” blog.  I do not feel that I am in any position to offer advice to anyone.  Sure, I’m frugal in some ways, but I can be quite profligate in others.  I fully believe in enjoying life here and now, but I also strongly believe in making a better future for me and my family by making wise financial decisions.

Over the next several posts, I will lay out our income, debts, assets, and budget so that you get the “lay of the land” as we continue our climb out of our debt bog.

Income

The husband and I both have fairly good incomes.  Together we make around $100k per year, sometimes a little more, sometimes a little less.  I am a salaried employee and my 2012 salary is exactly $50,033.  Henry is an hourly worker with the option of getting over time, so his income varies.  His yearly take-home pay over our 7 years of marriage has fluctuted from $42,000 to $76,000 depending on the job/positions he has held.  Currently, he is on track to make about $48-50,000 this year.

My take-home pay is a little higher than his because health, life, and dental insurance are all provided through his job and come out of his paycheck.  Makes sense that since he is in the health care profession, that he should have great insurance.   We both contribute to retirement at a rate of 13% of our pre-tax income.  Our savings all come out of my paychecks at a rate of 25% of my post-tax income, with an additional $200 per month auto-drafted from our checking account.

You Want me to Do What?

Since our marriage in 2005, we have always had joint finances.  For the first several months after we married, I struggled to find a job.  During that time, Henry was the bread winner and I was a very bored housewife!  I was horrible at finances and was in debt when we married, yet because of my free time, Henry wanted me to take over the family finances.  Of the two of us, I was the most irresponsible with money, and yet, my taking over the bill paying turned out to be the best thing that could have happened to our finances. Because I was not contributing to the income at all, I was painfully conscious of the fact that Henry worked hard to support us.  He never, ever made me feel that way, it was a self-imposed burden. However, it made me conscious of how every penny was spent.  We struggled on one income, and I did my best to make it work, all while trying to pay off the credit card I had stupidly almost maxed out prior to our marriage. 

Good Intentions Really Do Pave the Way to Hell

That was the start of our desire to be debt free, but it didn’t last.  I had been thinking about law school for several years, and finally in the Spring of 2006 I applied.  I was accepted and that fall I took out my first $10,000 in student loans.  I was convinced I would be making bucket loads of cash after graduation, so taking our student loans seemed totally feasible to me.  Little did I know that in my state (note:  we live in the mid-south), the average income for a lawyer was $41,000 per year.  Yeah, I was uniformed and naive.

In my next post, I will discuss our debts and how we incurred them.

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