Living with credit

How a big new bill has me adjusting our family budget

Dawn Papandrea

In my past life, I always thought of my credit cards as my backup plan if I really wanted something (or needed to pay a bill) when I didn’t have the cash. I grew up with the mindset that everyone has debt, and that it’s an inevitable part of life, so you may as well use it to enjoy nice things.

That probably explains why I carried around a good chunk of debt and paid high interest on it for more than a decade.

Having finally paid off my credit card debt, I now use plastic strategically and very rarely revolve a balance. In the back of my mind, though, I still kind of think of my credit cards as these big, open lines of credit that could come in handy should I ever need them.

A new bill threatens return to my old debt days

That’s why after recently going through the high school selection process with my son, I’m starting to worry about the big, fat tuition bill that will be added to our plate beginning in August.

After much deliberation, we decided on a private school that is perfect for him rather than the free local public school. We’re confident it will be a worthwhile investment and help prepare him to earn big college scholarships down the line (fingers crossed!).

We crunched all the numbers and will be able to make the added expense work financially, but not without a few sacrifices. What concerns me is the extra financial pressure might make me fall off the no-balance wagon.

If there’s a tight month, will the family and I really buckle down, or will I just whip out the plastic because it’s quick and easy, and I can worry about it later?

As a reformed credit card abuser, I don’t ever want to go back to where I was, which is why I’m giving some serious thought about the dangers this new financial burden may present. Luckily, I do have time on my side to get a financial plan in place to deal with the increased costs.

4 ways we are adjusting our family budget

Here’s a look at my four-point game plan so far:

1. Break it down into manageable payments.

I have the option to pay tuition for the entire school year at once, or split it in two, four or 10 payments. My goal is to try to do it in two lump sums.

Because my summer vacation money is already set aside, I have the rest of spring and summer to save up for the first tuition installment due in August. The second installment would be due in January.

By tackling it this way, I won’t have to worry about it month to month, which can be stressful since my unsteady income as a freelance writer means I sometimes get paid after the bills come due.

By paying for school just a couple of times per year, I’ll be able to earmark large project income toward tuition.

2. Consider better backup plans.

I don’t want to rely on credit cards as I did in the past, but if I do get into a bind, there are other routes I can take.

For example, I can dip into my emergency fund for an interest-free loan – I just have to make sure I replace what I borrow.

Or, I can draw from my son’s 529 college savings account since the new tax law now allows using 529 funds for private K-12 tuition.

I will try not to borrow from my son’s 529 account, as I’d rather him have all of the funds for college, but it’s there if we need it.

3. Start practicing our slimmed-down budget now.

Sure, I have until August, but I don’t want to feel the pain of a new expense all at once.

As such, I’ve already said no to a fundraising dinner I normally would have attended without thinking twice – a $150-plus savings.

Likewise, when the brochure for the basketball camp my younger son attended last summer arrived in the mail, he said he didn’t want to go, and I didn’t push the issue. Before, I might have just signed him up without asking – that’s another $250 saved.

We also scaled back our annual Super Bowl party this year, opting for a low-cost homemade menu and asking guests to bring a dish, rather than catering it.

4. Be a more aggressive financial negotiator.

Even though I find it awkward to ask clients for raises, or tend to second-guess myself when drawing up a project proposal, I’ve realized you don’t get what you don’t ask for.

Asking for higher rates was a resolution of mine anyway, but now I have even more incentive to do it.

I’m sure once the next school year is in full swing, we’ll adjust to the new expense, just as we once adapted to going from cheap rent to a big mortgage, and from being a couple to becoming parents.

We’ll make our adjusted budget work like we always do because it’s for our son and it’s important. And if all goes according to plan, we’ll make ends meet without the help of our credit cards.

See related: 7 things you never budget for (but need to), Boost savings with temporary budget cuts

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