Financial Close Calls
Author: Michelle
Description: Financial Close Calls. Changing My Financial Focus from Debt To Savings
Date: 2014-04-21T10:00:00+00:00

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# Financial Close Calls-Changing My Financial Focus From Debt to Savings

posted on 21 April, 2014

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Let’s start from the beginning. About two weeks ago I woke up on a Sunday morning needing to visit the bathroom (hey, we all do this). I step inside my bathroom and my feet sleep in what I can only describe as an alarming amount of water. I turn on the light and see a drip coming from a pipe in the ceiling that is located above my toilet.

My first thought-WTF? I was very tired and confused. It’s not the way a homeowner wants to wake up. My second thought, oh sh$t this is going to be expensive as there is WATER, COMING DOWN FROM MY CEILING. I’m not going to lie. I started to freak out. How much was this going to cost? I’ve just spent so much time trying to stabilize my finances, cut down costs, and make more money and now a slow drip from the ceiling is going to derail everything!

## I Felt Like Crying

The thing is I’ve spent the last couple of months fixing things in my home. I have done the following:

- Changed the shower handles-(there was mold in them). Handles: $10. Cost to put them in: $145. But, I also had my kitchen cabinets fixed as well. So labor far exceeded the cost of fixing the issues. I will be attending Home Depot Classes soon.

- Had a leak under the kitchen sink fixed-Then discovered that I had to order a new kitchen faucet because the old one was stripped and leaking. Cost for new faucet: $65. I had a gift certificate from Home Depot that I kept for 7 years (ahem) I used it and the faucet only cost me $35. Not including the cost of having someone come in and put the faucet in.

- Fixed my oven–The thingie that allows the gas to turn on had broken and that needed to be replaced. Cost: $185. We discovered that there was also a loose wire inside the stove. That was also fixed.

- Painted my crazy bathroom and bedroom–Cost: around $65 for all of the paint. I had some paint leftover from before.

## Additional Items

- Replacing the carpet-I have disgusting carpet in my bedroom. It’s well over 8 years old (easily) and is ruined after the leak that I had behind my washer and dryer. That’s ok because I hate carpet. $895

- Replacing the Shower Nozzle–It’s an old fashioned nozzle/pipe and I can’t remove it. So, I’m having a plumber come in and fix it. The Shower head is disgusting!! I hate it. It has hard water and mineral stains so it’s hard to feel like you’re getting clean when the nozzle looks the way that it does. I’m having this done this Saturday.

- Replacing the Kitchen Faucet–Also being done on this Saturday.

- Replacing my Bedroom Windows-They don’t open. That’s stupid. First quote was $1200. I just can’t imagine that 2 windows would cost that much. I will be getting other quotes in the next couple of weeks.

The point of the above lists is to point out that there is a cost to owning a home and I have been VERY, VERY fortunate, that this has been the most expensive year owning my home in since I purchased it in 2007. I knew that there was the potential for leaks, etc. it’s just super frustrating that the year where I’m trying to really get my life in order all of these other things come up.

## It’s Murphy’s Law

So, I called the plumber and we set a time for him to come in on Monday. I leave work early on Monday and met up with the plumber. He was a bear of a man, grizzled and maybe he’d had one or two drinks before meeting me. I trusted him implicitly. He walked into my bathroom, looked at the ceiling. Shown a light at it, tilted his head and said magical words to me.

“It’s not your problem. It’s the unit above’s problem.”

HALLELUJAH!! I wanted to dance, to sing, to clap, or to dance. Luckily, the fix for my neighbors would only cost around $125 but it was one less thing to deal with.

(Has this happened to you?)

The other issue that came up in all of this is I need to slow down

my debt repayment and amp up my savings.

I’ve spent a lot of time working on cutting costs, paying off debt, and getting organized. I even prioritized savings and am proud to say that I have more money saved at this point in time than I have in many years. The thing is-it’s not enough. If that plumbing issue had been mine, I would have needed the ceiling of my bathroom ripped open, a pipe replaced, and the ceiling put back re-installed. That work probably would have been in the thousands of dollars. It would have taken my entire savings and I probably would have needed to charge some of the cost for fixing the plumbing.

I clearly need to save more. So, I’ve decided to shift from extreme debt repayment to a more balanced process of savings and debt repayment for the next 4 months. It will look like this:

- Shift back to the Snowball method* of debt repayment. I like the snowball method of debt repayment and that was the method that I used to pay off most of my debts last year. *Focusing on one debt at a time paying as much as you can on that debt. Once that debt is finished add those payments to the next debt (increase your repayment).

- Recently I’ve thrown large amounts at several debts. Instead, I’ll focus on one debt at a time and increase the payment on other debts so that they will continue to decrease.

- Create Clear Savings Goals-I think I need to save for 2 different things. One is an emergency savings account. I currently have about a month of emergency savings but clearly need more. I think that my goal for that will be 3 months of expenses. So, I need to save 2 months worth of expenses from now until the end of Summer. God forbid if I lost my job I would also have a substantial payout from all of my vacation time. That payout would bump my savings to 5 months of expenses. The second savings goal is a home savings account. It has been stated that home owners need about 1% of their purchase cost in a savings account. If I were to take out the cost for the carpet and the windows I would be at 1% of my purchase amount.

This whole experience reminds me we need to constantly make adjustments as our situation changes. The ability to take a step back and make an unemotional adjustment instead of one made during a stressful situation is a great way to stay ahead of potentially stressful situations such as a leaking pipe. I really lucked out this time but I don’t want to go into debt paying on maintenance issues that I should be budgeting for in the first place.

I feel really proud of the progress that I’ve made so far and look forward to increasing my savings.

## Have You Had Financial Close Calls Similar To These?

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#### Michelle

I am an obsessive foodie, but not self-righteous with it, love travel, meeting new people, helping you look good, and am freaked out by people who don't enjoying reading...something! Grab a Perrier, read my blog, feel free to drop me a line! Hope to hear from you soon.

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### Comments

1. Tonya@Budget and the Beach says

   21 April, 2014 at 7:42 am

   Well as a renter that’s the only advantage. Glad it wasn’t your problem to fix. I want to throw large amounts at my car loan, but since my savings took a huge hit from taxes, I’ll build up my e-fund to 10k and then tackle the car loan. I’m throwing any extra money I make over my projected income at savings, despite the fact that I really want to buy some new clothes and a few other items I want to update. Gahhhh! 🙁

   Reply

   - Michelle says

     21 April, 2014 at 7:41 pm

     That is a huge plus when renting. Someone else has to deal with the crap that comes up. I just received my new faucet that I have to have installed over the weekend. I’ve officially had a handyman in my home at least 4 out of the last 5 Saturdays in a row. This is what happens when you delay getting stuff done. I want to throw extra cash at stuff but things keep coming up. Sigh 🙁 We will get it done!

     Reply

2. Sher@FatGuySkinnyWallet says

   21 April, 2014 at 12:04 pm

   I am SO glad that leak wasn’t your problem! I am doing a happy dance with you! :-). I think it’s important to be flexible with a savings/debt repayment plan as our needs or situations change. It sounds good, and I am a fan of emergency savings ;-). I look forward to seeing how these changes pan out for you over the next few months!

   Reply

   - Michelle says

     21 April, 2014 at 7:48 pm

     Sheriann, I was so freaking happy too! Every day that saw that stupid leak I became more or more anxious about the whole thing. My neighbors were also happy that they only had to pay $125 bucks to get it fixed but it could have been a big ordeal. There is another plumbing issue that I’m concerned about, but that’s for next month. At least it’s not a leak! I just want more in my savings before I continue tackling the debt.

     Reply

3. Dear Debt says

   22 April, 2014 at 1:06 am

   Ugh what a pain. Glad it’s getting fixed. I like what you said about always adjusting our financial situation. I recently upped my retirement and savings because I realized I should be putting a little more in there and not just wait 3 or 4 years until I’m debt free. It does feel more balanced, even though I’m putting the majority of money to debt.

   Reply

   - Michelle says

     22 April, 2014 at 3:15 pm

     I have been saving more which is saying something as the American savings rate is so low. So, I was feeling pretty good about things…until this. I just knew that if I had to pay for this I was screwed. So, I’m upping my side-hustle (as soon as rest up a little bit). Then, I’m upping my retirement investing, regular savings, and paying more on my mortgage. So, my plan is to work hard and set money aside. I feel really good about this adjustment.

     Reply

4. Laura / No More Spending says

   22 April, 2014 at 5:38 am

   I’m also happy you didn’t have to pay out to fix anything! The cost of small repairs really add up. In my second life I’m going to be a plumber! 🙂

   Reply

   - Michelle says

     22 April, 2014 at 3:18 pm

     If I were a plumber I would be rich. We have another plumbing issue in the building, but i don’t have the mental energy to deal with it. I’m just so freaking happy that I don’t have to pay for it. Now, I’m going to schedule the Handyman to put the damn faucet in for the 2 time in 7 years.

     Reply

5. Victoria says

   22 April, 2014 at 1:59 pm

   I’m desperate to clear my debt but am very concerned I have no savings as it will inevitably mean i’ll have to use my credit card in an emergency. However, the interest rates for savings in the UK is so poor that paying off debts is financially better. I’m glad your plumbing issues wasn’t too serious.

   Reply

   - Michelle says

     22 April, 2014 at 3:21 pm

     I want to get rid of my debt so badly. But, it I continue with so little saved I would end up charging things anyway. It’s always good to pay off debt as fast as possible. I just feel like I need to make an adjustment for the next 4 months so that I feel a little more secure going further into the process. We will get rid of our debts! I have faith in us 🙂

     Reply

6. anna says

   22 April, 2014 at 6:25 pm

   What a relief to hear that the leak wasn’t your problem, though I would have freaked out, too. That’s also great to hear that the loose wire was found in your oven – kind of scary! We’ve had a couple of savings readjustments this year, but more so transferring from one big goal area to another. I like your strategies, Michelle!

   Reply

   - Michelle says

     24 April, 2014 at 9:51 pm

     My neighbors might have to call the plumber in again. I think there is still a tiny leak. I just want to focus on savings. I’ve figured out how to reps debt and focus on that, but I haven’t gotten as aggressive with savings as I need to be. That starts now!

     Reply

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