I know it’s tempting to think, “Oh, boy! More money! Now I can buy that huge TV we’ve been side-eyeing!” or “DINNER OUT EVERY WEEK!” (Don’t tell me I’m the only one who falls prey to that.)
But this is what I’d do first (in my dreams):
- max out my Roth IRA ($5500 a year – that’s a lot of dough per month!)
- build up an emergency fund to 6 months of living expenses (that’s like more $ than I can even do the math on, for real)
- add to our Edward Jones investment account (which, right now, I just watch move up and down by small increments, because it simply doesn’t have much in it at the moment)
- build up L’s 529 account (I subscribe to the school of thought that says “plan for your own retirement first, since your kid can take out loans for college but you can’t take out loans for retirement” – but ideally, we’d be able to do both!)
Of course, we DO still have debt. So if we scored a higher paycheck in our current situation, my first step would be prioritizing the student loan debt. I would probably throw most of the money at the debt, but I’m starting to realize what a vicious cycle our family is trapped in – when something comes up (like an expensive car repair, or an unexpected registration cost for L’s dance class, etc.), we just end up putting it on the credit card, then using the next month’s extra money (left over from our budgeted items) to pay off the bill.
Not a healthy way to live.
So, starting last month, I set up an automatic transfer from our checking account to our savings account for $450 – not a lot, but enough to cover those payments that don’t happen monthly (auto insurance, etc.). Any interest we make on that account, I’m putting into the “emergency fund” category. Yeah, there’s like $1.50 in there.
I’m hoping that when we get our tax refund, we’re going to be able to even the score again on the credit cards and fluff up the savings account (to counteract any possible unexpected expenses, even though technically that money is set aside for known future expenses).
But I won’t deny that sometimes I lay in bed before I fall asleep, just imagining all the debt I’d pay off with extra income.* It might be a sickness, guys.
*I’ve been working towards a side-hustle (in addition to online surveys and selling clothes at consignment shops), but my one strongest lead doesn’t seem to be paying off. Time to find another plan of attack.