In either December or January we will make our last contribution toward my daughter's college education. We've been lucky--for tuition, room, board and books we've paid about $24,000 for four years. This has been a planned expense but one I'm glad is about done.
Her tuition isn't cheap either, and next year she is off to high school, which is twice the cost. Guess what her sister's tuition will be used for next year?
My husband and I took a second honeymoon this summer. It was our first childless vacation in a long time, and the earlier ones were just weekend getaways. As trips to New York go, it wasn't bad expense-wise but between airfare, hotel, food and attractions, we spent almost $2,000. It wasn't part of any long term plan but we didn't borrow money for it.
We bought college girl a car this fall. She's been nervous about driving and we thought it would be good for her to have a year of practice in a small town where you can leave your house without getting onto a four lane road. This was a planned expense, though (of course) it ended up costing us more than expected.
Not long after we bought my daughter's car, my son wrecked his. My husband was driving a fifteen year old car, so we gave that to my son and my husband got a new (to him) car. It was a 2016 and only had 8,000 miles on it, and we got it for less than book value. It was an unexpected expense and we decided to only pay half down and finance the rest. Our credit union financed the balance at 1.45% for three years. Hopefully our investments will earn more than that.
Doesn't that look like fun? Our other big unexpected expense this year has been my teeth. I have one tooth in which I had already invested a couple of thousand dollars in root canals (yes, plural) over the years that finally let me know it was done. I had it extracted and will be getting an implant. Another tooth needed a root canal and I had a wisdom tooth that I had a choice between pulling or having a root canal and crown. I decided that $200 was better than $2,000.
Of course with all those cars Allstate gets a good chunk of change from us as well. Hopefully college girl will get a real job this summer and can take over her own bills.
One thing this year reminded me is that we have to be prepared for the unexpected. Without our planning and our saving, any of the items on this list could have resulted in loans, either to us or to our kids. One thing we are trying to do as parents is to push them out of the nest with no debt or real need to acquire it. Our parents were able to do it for us, and I know what a blessing that was. My post-college roommate struggled to make her car payment every month, and while my car was much older and looked like something my Dad might drive, not making that payment gave me the freedom to save.
Another thing this year showed me is the power of passive income and compounding. Despite all those expenses (all of which, except for the cars were paid from current income), our savings grew by almost 8% this year. Admittedly, part of the reason is that the market was down at the beginnig of the year, but over the years we have amassed substantial savings/investments and a year like this where we have to use them makes me confident that the money really will grow enought to support us in retirement.
Have you had any major expenses this year? Were they expected or unexpected?
Dental and medical expenses are the worst. As usual, our medical expenses were high, but our only other major outlay was a badly needed new front door and storm door.
ReplyDeleteManaging finances is such a great skill, and it sounds like you have really been doing it well. It is a shame that your son wrecked his car, but what a great opportunity for your husband to get a new one. It may be pre-owned, but it is certainly young enough to be almost completely new! What an amazing find.
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