atTENding to Our Finances in 2010 April update

It's the end of April, so it's time to update our financial goals, which I posted at the beginning of the year.

As you may recall from last month, I reported that my husband had lost his job at the end of February.  He had received several months' notice before the job ended, though, and he started looking for a job as soon as he received the news.  We were fortunate in that he was able to find and start a good job just a few weeks after his previous job ended, though he had been looking for several months.

And, we were fortunate in that his previous job gave him severance pay.  We lived off that money for the weeks that we were without a paycheck.  Now that he is being paid again, we were able to put the rest of the money toward our goals.

And the good news is, we were able to complete two of our goals!

So here is where we are:

• Save up and pay cash for the expenses of my daughter's bat mitzvah by July 2010.  Completed in April 2010.
• Save up a proper emergency fund by December 2010.  We have 2-3 months of living expenses saved now.  We'd like to increase this, but we are satisfied with this amount for now.  Completed in April 2010.
•  Once those two goals are finished, pay off our home equity line.  No action on this goal.  We did pay the interest accrued on the loan. 

So now, our big challenge is to pay off our home equity line of credit.  I don't want to get into exact numbers, because it might be a huge accomplishment for one family to pay off a certain amount, whereas for another family that amount might be incredibly easy.  Suffice it to say that the amount we owe is about 25% of my husband's yearly salary.  The interest rate is very low as of now, even lower than our mortgage.  But the interest rate is variable, so it could rise in the future.

How did we get this debt?  Part of it is from a car we bought in 2005, although some of that has been paid off.  And some is from the private school tuition we paid in the past for my eldest daughter (she now goes to public school).  And another part of it is from two years ago, when we neglected to save for our yearly property taxes (they aren't escrowed with our mortgage).

Why don't we just use our emergency fund money to pay down this debt?  Certainly that is what Dave Ramsey would recommend.  But having just survived a job loss, I feel better in having that money in the bank.  Also, the emergency fund money would pay down only a portion of debt. If an emergency came, we'd still have a large debt, plus almost no money in the bank.  It's possible that when we pay down the debt enough that using the emergency fund would pay it off completely, we may do that.

How are you doing on your 2010 financial goals? Post them (or a link to your blog) in the comments.

Check out more financial goals at Saving on a Shoestring @ Cha-Ching on a Shoestring and Coupon Teacher.