YOLO

I had a short but very disappointing conversation with my brother in law the other day. It all started with us borrowing his van to test drive because we're considering replacing our SUV for a van. When we dropped off the car, he said that I should get a van but I sighed and said it was too expensive. A new (to us) car means car payments and we don't have enough in our savings to pay it all off. Although, I wouldn't mind a small manageable car payment that we can pay off in a short time. It's still a big purchase involving lots of $$$ and we like to sit on it first. 
 He encouraged and said "life is short, don't deprive yourself of what you want."
 This part makes sense, we don't know if we'll still be here tomorrow and we need to make every moment count.
He then goes on and said that THEY SPEND EVERY DOLLAR THEY MAKE!!!! THEY HAVE NO SAVINGS AND HE'S OK WITH IT.
 That's when I became horrified. Are you serious!?!? That's is the most obscured thing I ever heard.  How can anyone with a mortgage, wife and 3 teenage kids say that? He's the breadwinner and they're all depending on him. He went on and tried to justify that he's behavior is ok simply because he wants to live his life in the moment.  I felt that he was encouraging me to do the same, I guess it would make his decisions normal if everyone is doing it. He went on and repeat with a wave that he has no life insurance, no savings, no NOTHING!
"I can't live like that,  I want to save money because I want to retire early." I replied
"55?" he asked.  I said, "No, 50, I don't want to work forever." He looked at me incredulous, as if my plan is naive and unattainable and said "I'm 50."
"What happens if you get sick?" I questioned. He nonchalantly shrugged and replied " I don't know, I don't care, if it happens it happens."
At this point, I was very irked by his irresponsible way of thinking. I retort, "if you get sick and can't work, you're going to loose your house, your car,  what's going to happen to your kids?" He shrugged again and said he only has enough 2-3 payments, I wasn't sure if he meant for his cars or mortgage, neither way, it's equally disturbing.
I went on and told him that I save money because I want to make sure we have a good future, I buy life insurance because if anything were to happen to me, my daughter and husband is financially ok. I told him that just because I budget and live below my means, doesn't mean I'm depriving myself.  I carry designer purses (I'm a purse girl), I buy my daughter what ever she needs, I go out and eat when ever I want. Our conversation was cut short because we had to leave.

But that conversation occupied my thoughts for the rest of the night. My husband and I always speculated that his sister and brother in law live paycheck to paycheck. After all, 3 kids, two cars and a mortgage ain't cheap. But, what shocked me the most was his admission that this is all intentional. I did catch a glimpse of uncertainty on his face when I questioned him on the possibility of him not being able to provide for his family. Perhaps, he's awaken to the fact that his ways are not sustainable. I felt like deep down, he knows he messed up, and perhaps the reason why he hasn't made any changes is because he's not sure how.  They've continuously inflate their lifestyle as their income grew, they've gotten used to having certain luxuries. So now, not having the newest model of iPhone or driving a car he really wanted might feel like deprivation. 

In someways, I completely understand his approach to life. I, too, came from a third world country. The things we didn't have was not easily comprehend by someone who had toilets in their house that flushes. We had to go the an community outhouse to do our business. Yeeep, super gross. But, it was life, it was all we had. I believe my brother in law felt that he's come from nothing and worked hard to be where he is, he deserves a gas guzzling truck because he wants it, he deserve  to buy all his kids iPads, and his wife a designer purse. But he's completely ignoring something else he deserves, STABILITY. He and his wife make a decent living. If they would budget a little, they'll be able to save for their future or a catastrophic event. They can take care of themselves when they're not longer are able to work. They don't have to be in the mercy of the government, hoping that they're benefits won't be cut. And if they try, they can even shave a few years off of their mortgage payments. What a nice gift it is to oneself, to rid yourself if your biggest debt a few years early.  

Unlike my family, money isn't discussed openly in my husband's side of the family. What I desperately wanted my brother in law to know is that it's not too late to change. Life is about the pursue of happiness, but happiness isn't necessarily derived from your purchases. If anything happens to him, those iPads and countless amount of toys he bought the kids isn't going to pay the bills. It's his  savings and life insurance that will pay for his mortgage, food and clothing. For the sake of his children,I hope he'll change his ways and set a good example. 

What We Did With Our Tax Returns

Let me begin by saying how important it is to have a good accountant who knows her shit. It truly makes a different.  I thought, since I only have a regular 9-5:45 job, my taxes should be cookie cutter simple. Twice in a roll, my return was a measly $1000 give or take a few dollars. My husband on the other hand was getting 2x as much as me. I thought, it wouldn't hurt to give his accountant a try. Last year, we filed jointly for the first time and our return blew me away. I mean, there are several factors to be considered and I can't really compare apples to apples when we file jointly versus married but filing separately. But I do believe his accountant is more knowledgeable than mine and thus able to get us a bigger return. Mine  was someone younger than me just starting out. **No offense to all the accountant just starting out, we need you. 

This year, our return was a little higher than last year, mostly due to the birth of our daughter, I made less because I took a 2 month maternity leave and I'd increased my 401k contributions. 

Last year, with our returns, we're able to pay off a small student loan my husband had. We sold my car and used proceeds with the left over tax return to buy a newer car. It feel so good to own a car outright. 

This year, we used the money and pay off our credit cards immediately. We had higher than normal credit card balances this month because we just celebrated my daughter's first birthday. We moved and needed some furniture for our new place. And, my husband took his car in for a 105k mile tune up... that was over $1000. If you take care of your car, your car will take care of you, I guess.

We still have some money left over for my husband to pay off his car, this move would make us debt free, with the exception of my mortgages. But he rather that we use this money to add to our savings. At first, I wanted his car loan paid off, this would save us $200 per month. But then, if we don't redirect that $200 else where immediately, we're bound to find ways to spend it. We thought it would be easier to keep our finances the same and keep the money to boost our savings. 

We didn't do anything "exciting" but paying off our debt is pretty exhilarating. Having a little bit of cushion in the bank really helps us sleep better at night.