Couple Money

Changing Our Financial Strategy

counting the coins

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We changed the plan because after looking at our financial priorities, I realized the original plan didn't quite match what we wanted to accomplish. I wanted to go ahead and explain why we changed the game plan and what we're going to do now.

The Original Plan

I can't believe how quickly the year is going. If you remember in January we had three financial goals for 2011:

The original plan included putting 50% or more of windfalls (like a tax refund) towards the student loan principal.

Savings More Important Than Debt Reduction (For Now)

While paying down the student loan a bit faster would be great, I think for our family's situation it would be better to meet our savings goals first. I realized that paying down the student loan would be an emotionally satisfying goal, but it wouldn't necessarily be the best move for us.

Something that surprised me as I was looking around at different personal finance writers and bloggers was Dave's Ramsey's take on preparing for a baby.

If you're not familiar with him, Dave's approach involves being 100% committed to while in the debt elimination phase. He calls it gazelle intensity and for some it means getting down to the basics until all your non-mortgage debt is paid off. The exceptions to that rule is when you're expecting a baby or a job loss.

Here's his explanation:

When a couple finds out that they are going to be parents, they often wonder if they should stop the debt snowball to save up for the baby. The answer is yes. Save as much money as you can in case something happens and you need the money immediately. Once everyone is healthy and home from the hospital, you can take that saved-up money and put it toward paying off debt if you didn’t need it for the baby.

I think it's reasonable and fits our circumstances. I think it'll be a few months once the baby's born to figure out our new monthly budget. I'm curious, though – how long did it take you to adjust your budget? Was it a big change for the family?

New Financial Strategy

While it's not a huge change in our goals, it does mean we've adjusted the plan. Here's how we'll focus for our goals:

Thoughts on Changing the Plan

Adjusting financial goal posts and strategies happens time to time for us. How about you? Have you ever changed your financial strategy or goals? Was it hard to do or did the switch come about easily?

Photo Credit: Marion Doss

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