Decisions ….

Do other personal finance enthusiasts ever find themselves in a quandary like this? We have all our money in and out planned out for the next year – which debts we’ll pay off, how much we’ll be able to save for a house and what expenses we know we’ll have along the way. We keep a billpaying account that automatically deducts a set amount from our main account each week. Then as the bill falls due, we pay for the item. It’s different to an emergency fund because we constantly access the money, and also because often we still have to jiggle a bit (pay that bill this week, then pay that bill a few weeks later, depending on the current balance). We have also learnt to add costs like Christmas presents/food, family birthday gifts and clothing to the bill-paying account formulation, because otherwise we have to figure out how to pay for them from the tiny amount we leave for miscellaneous/fun each week. So anyway, we realised this week that my husband was going to get cash back in his tax return this year. That hasn’t happened for a long time … usually we owe them money! The question is, what do we do with it? I know  you are screaming that we should put it towards our debt, and I am inclined to agree, but then I think … may be we should buy some clothes. And I’m not trying to convince myself, out clothing situation is dire … my husband has two pairs of shoes, one of which is falling apart. We haven’t bought new clothes for ages and it really is starting to show. My husband needs to look pretty professional now he is in upper-middle management, and he also has so few casual shirts that he tends to wear old work T-shirts on the weekend (he says they’re comfortable). Meanwhile, I need to look decent when I turn up to the hospital (I’m a medical student), and none of my clothes look quite right at the moment. Maybe we should devote a little cash to fixing our clothing crisis?? It’s really hard for me to say that because the $800 would make a huge difference to our debt level and/or our savings. However I’m acutely aware that as soon as our debt is paid off (in about a year) we will hopefully buy a house, and until I start work as an intern six months later (18 months’ time), we won’t have a spare dollar once the mortgage on that is paid.  And I also know that when you’re on a budget as strict as ours, and its nt going to change any time soon, you need to let loose occasionally. I guess we’ll make the decision when the money actually arrives. In the meantime, we should just enjoy the fact we’re getting any money back at all!

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