Back in February, I put myself on a strict budget for all variable expenses- food, car, entertainment, pets, clothes, etc. I'm going to get my Line of Credit (LoC) paid off in two years if it kills me. Then, if I find that I can maintain it, I'm thinking about keeping to that same budget and paying off the house that much faster.
Since I started living off the strict budget, I haven't always spent the full budgeted amount. I'm actually surprised and pretty darned impressed with how much I've got left over, but I'm not sure what I should do with the extra.
Should I:
- Spend it like fun money - it's my reward for staying within budget
- Set it aside until I have enough for a Murphy Bed. ***
- Put it on the LoC and leave it there
- Put it on the LoC until I go to Italy, and then take it back as fun money for the trip
- Add it into savings for the Italy trip. (I've saved up enough for flights, hotels, food but not a lot of extras.)
- Put it into a different savings account without earmarking what it's for
*** I told myself when I committed to this budget that I wouldn't do any fixes or changes to the house unless they addressed structural or safety issues. However, my spare room - where I work all day - is jam packed and a Murphy bed would make things a lot more comfortable. It's a want, not a need, but I know a skilled carpenter who is looking for work and willing to give me a deal.
I've already made up my mind, but I'll wait until I hear what you say before I tell you.
I did a similar thing a few years ago. After I paid off the LOC, I put the surplus on my car payment. I had it paid off early and then splurged on a "treat".
ReplyDeleteGood for you, Kim. My car is paid for, so I've just got the LoC and then the mortgage - which is pretty much expenses from fixing the house. I don't know if I want to wait that long for a treat, though. Two years, I might be able to hold out. Having only done this for a month and a half, that seems like a very long time.
ReplyDeleteItaly. Save it all for Italy.
ReplyDeleteItaly!
ReplyDeleteI say use it for the Murphy bed. It will improve your daily living conditions, and will be a daily reminder of your ability to reduce spending. Thus encouraging you to continue on your path toward financial health...
ReplyDeleteItalia, Italia, Italia!
ReplyDeleteItaly.
ReplyDeleteI vote Italy as well. How fun would it be to finally get to Italy and not have money to play with?
ReplyDeleteYou're a smart bunch of ladies. I had planned to put that money into a different savings account, in case something came up in the future that I hadn't planned. I also hadn't ruled out the Murphy bed entirely. However, after spending most of the day yesterday talking with travel agents, looking online and making plans with my aunt, I think this trip is going to cost more than we'd originally planned. Not only will my extra $500 be going into the Italy fund, I'm going to be working pretty hard over the next couple of months to add some more to it.
ReplyDeleteI got so excited when I saw Murphy bed that I didn't see anything else you posted. I have always longed for a Murphy Bed - go with that!!! so I can live vicariously :D
ReplyDelete