Can Saving and Debt Co-Exist?

I love spreadsheets.  We have our budget on a spreadsheet with various categories and calculations.  We also have our debts allocated in a spreadsheet with interest calculations and amortization.  I also monitor our investment growth in a spreadsheet.

I like reviewing spreadsheet and manipulating them. 

However, I'm starting to think spreadsheets may not be a good thing.  Can you obsess over a spreadsheet?

I'm constantly flip-flopping between saving money for future expenditures and paying down our debt.  One month, I love making a trade and watching our savings balance grow.  The next, I'm pissed off about our debt level and want to make a double debt payment.  It's a vicious cycle.

I'm content with our plan to save money and pay down debt.  I just wish I could do both more.  We have a pretty substantial amount of investment funds available to us and we also have $5k in an emergency fund.  Our debt payments aren't outrageous right now, mostly because the student loan debt doesn't have a minimum payment due to deferment period.  Our debt to income ratio is about 34%, which is a bit high.

Is this why Dave Ramsey screams about paying off debt first and then saving.  The simplicity of the action.  Perhaps.  However, the accountant in me also understands that my interest rates are low and that the student loan and mortgage interest is tax deductible, which helps alleviate some burden.  However, I still get angry about those debt balances - especially when I look at my spreadsheets!!

Where is the middle ground?  I have a son on the way and desperately want my wife to stay at home.  However, I worry with our debt levels that that is not possible.  On the other hand, without saving more money we may not be able to put 20% down on our dream home, which would be worse.

Perhaps I should get a 2nd job....

December Net Worth Review

Well, 2012 is over and done with and 2013 brings about the year of "Little Guy" in our household as we prepare for the February birth of our son!  We're very excited and also very excited to get crackin on some debt reduction and Net Worth boostin!!  Here we go!!

 

Cash - $20,050 (+$2,915)

Investments - $98,075 (+$10,619)
Home Value - $197,000 ($0)
Personal Assets - $51,401 (+$509)
Less: Liabilities - $188,522 (+$823)

Here's how it breaks down:

Assets -

Cash - A nice increase to our cash balance that was caused by a SERIOUS Christmas gift of $5k from Gram and Pap S.  Amazing how fortunate the Prof and I are.  However, we did make a tuition payment of $3.6k for the Spring semester.  So, we still had a nice increase without those two items, however, the first item will help us pay future tuition and pay down current student loans.  Also, I'm looking into 529 Plans for the little guy.  So, it's nice to have the liquidity.

Investments - This increase is a bit deceiving.  I've added a Pension Fund of $6.7k that the Professor has which I did not know existed.  I guess its a mandatory thing for all teachers at her Charter School.  So, that was a nice bump.  Otherwise, the Fiscal Cliff didn't really happen, which saved our investments and we made our usually $2k contribution into House Fund.

Personal Assets - No change here other than the car values inexplicably going up!  I can't explain it, but I'm sure it will go down more often than not.

Liabilities -
Mortgage - $132,244 - So, we added about $1.7k to our Mortgage Loan this past month as we closed on the refinance loan.  The actual loan is $132k, but because its a Home Equity Loan, the interest is calculated daily and reflected on the website.  Frustrating because I see the balance go up every day, however, I'm okay because we'll be paying this down faster with the 20 yr term.  Plus, I used the small amount left over to pay down a student loan.
Student Loans - $33,089 - As I said, we made an additional $126 payment this month, which was almost all principal.   

Acura Loan - $23,190 - Second payment in the books.  I'll be making extra payment on both of these items in January as part of the Christmas gift utilized.
Total Joint Net Worth - $178,004!! 

We accomplished our 2012 goal of $170,000!!!  Amazing!  The increase is largely attributable to the new Pension Fund account and the extra Christmas gift.  However, with those two things, we still saw an increase of $2k even though the mortgage went up.  With the baby on the way, we've discussed getting more aggressive with the student loans - so we may see more head-way there.  But, for now, I'd like to wait and make sure we have a healthy, happy baby until doing anything major to our current savings/debt ratio.