Currently in America, the average debt is $67,900. This debt does include mortgage debt, which isn’t an uncommon debt to have. While it is common, my family and I are currently on a mission to erase all debt, including our mortgage from our lives. In less than 2 years we have been able to get wise with our finances and create over an extra $1,000 a month while gradually working less and less. I’m going to share the strategies our family of 5 used to make this happen and what you can do to get started saving.
*This post contains affiliate links. For more information see my disclosures.
Before starting any new venture when it comes to life or money, it is absolutely crucial that you know what your goals are when starting. There is a great home, fitness and financial planner out there to help you conquer all these goals. First and foremost, ask yourself what you really want from your life and use those reasons as constant reminders to help keep you on track. Things like early retirement, college fund for the kids or dreams of traveling more can be great reminders when you feel like penny pinching is too tough. Check out my post, The Minimalist Diet to read about how I do this in every aspect of my life.
We live in a world where the bigger is better belief has taken over. The day my husband and I realized that this way of living quickly has a way of becoming a bottom-less pit was the day our lives finally changed for the better. Of course, it wasn’t just a single day that gave us this big realization. It all started the day we moved into our “big house.” That big house started to feel emptier every day and our family drifted further and further apart. If you want you can read our full downsizing story here.
At the time I was making some pretty serious cash as a photographer with my own in-home studio yet somehow money never seemed to stick around. I would scroll through our bank account at the end of the month and find that most of our money was going to small, seemingly insignificant purchases like Taco Bell or clearance section “must haves.” Money was just way too easy to waste and we were doing plenty of it. There were definitely well intended decisions. When I would photograph a wedding, I would often use the money and put it toward my student loans or a credit card. While I did this with good intentions, I also did it without any strategy or ultimate goal in mind. If I had, I would have been able to easily dig us out of debt in a few months. If student loans are a struggle for you or you are currently a student, iGrad is a great program designed to set young people up with long lasting financial success.
Feeling lost in our home and finances, we decided to start living below our means. That meant putting our home on the market, finding out how much we qualified for in the purchase of a new home, and then start looking for houses way below that price range. Unfortunately, we weren’t in our “big house” for very long so we didn’t acquire much equity but after downsizing we were able to cut off $600 from our monthly payments.
When we made the downsize we also made the conscious decision that this additional $600 a month would not be wasted on meaningless spending, but instead put to good use and saved. If you are terrible at saving, check out my post all about the benefits of sinking funds when it comes to small saving for big things. For additional help and ideas, Brightpeak Financial also has a great, and totally free course that will give you tips and tricks in saving $5oo in one week!
Another way to start cutting back is by looking at the things you are already spending money on, things like:
Personally, our family never had cable and have relied on Netflix to entertain us at 10% of the cost of cable! Recently we have evaluated our gym membership as well and realized we are able to save between $30 and $70 a month just be changing up our gym.
We have also started using sinking funds in order to set aside money for going out to eat and ensuring we have the funds for holidays, birthdays and car maintenance.
Grocery shopping is getting easier and easier to find many ways besides couponing to help lower your grocery bill; places like Target are starting to offer 5% discounts off your purchases with things like the Target debit card. On top of this there are apps out there like Ibotta that actually give you cash back for your purchases. Click here to read my full overview of Ibotta.
Get realistic with your budget. We used to budget our house, car payment and bills and that was it. Now we take the time to break down our finances even further by budgeting how much we will spend on gas, groceries, fun money and our sinking funds. On top of budgeting for bills, food, gas and all those necessities, we are finally setting aside 10% of our earnings into a savings account each month and hoping to make that number larger in the near future.
Of all the things I have written here, this one is the most crucial. If you have debt, I don’t have to tell you how much it can weigh you down. I’m also not going to pretend that paying off debt is easy, but it is worth it. Tom and I attacked our debt with everything we had a little over a year ago and were able to pay off $6,000 of debt in only six month. See how we did it here. After leaving our big house, I also left my photography business. In order to pay off our debt, I was taking small, part time jobs while still homeschooling our kids. I turned down girls nights with friends, said no to vacations, stopped buying anything that we didn’t need and put all my energy into watching that debt disappear. In order to do this, you may definitely need to get some extra cash on hand.
If you are a one income family, homeschooling, stay at home parenting or all of the above, earning extra cash can seem crazy difficult. I want you to know, sometimes it is, but there are a lot of ways that can be pretty stress free. Here are some of the things I have done (or that some friends have done) in the last 2 years in order to earn a little extra income or even avoid unnecessary spending:
Use your talents is huge! This day and age is so easy to find something you love and turn it into a profit. Things like buying old, used furniture, fixing it up and selling it for a profit. Photography. If you are a talented photographer or have a great camera, start offering your services to friends and family or try selling stock photos online. You can sell crafts on Etsy, become a nanny, dog sit, or even start a blog! (wink, wink)
The topic of earning/saving extra money has become a huge interest of mine. Not because I’m greedy, but because I let money control my life for so long and yet now it seems that there were so many ways I could have been getting more (and spending what I already had way more wisely!) The book You Are a Badass at Making Money: Master the Mindset of Wealthtotally flipped my perspective on money within the first chapter. It made me realize that wanting money isn’t greedy…it’s necessary. If I want to provide for my kids I need money, if I want to take trips with my husband, I need money, if I want to go back to school, I need money. It’s simply the way the world works. In fact, one of my biggest motivators for getting good with my finances was because I wanted to be able to give more freely to other people.
Another great money motivator for me has been the one and only Chip Gaines; while I haven’t read his new book, Capital Gaines: Smart Things I Learned Doing Stupid Stuff, I was amazed after reading The Magnolia Story at all the fun, quirky ways he has found to earn money. I highly recommend giving that one a read!
Keep those goals in mind! Whatever it is that you are hoping to achieve in your life; for yourself or for others. Trust me, I know how tough budgeting is. Remember you are not depriving yourself of anything, but instead are giving yourself ultimate freedom to do more of the things you want in life without being a slave to money. Don’t forget to check out some of my recommended resources.
$5 Meal Plan – The $5 meal plan was created by a busy mother of 4 for other busy mother’s out there. Get access to healthy meal plans that take all the guess work out of what to make for your family!
BeFrugal – Be Frugal is an online resources for the best coupons around. In stores, online or in restaurants.
IBotta – IBotta is a totally free app that pays you $10 just for signing up. With this app you can get paid for the things you already plan on buying!
Linqia – Linqia is a great way to start working with brands. You fill out your profile and the brands come to you!
Love and Money – Online courses to help couples and family get finances together in order to stay together!
Paperless Home – The paperless home guides you step by step through how to start creating a home where all of your most important information can always be in one place and always at your finger tips!
Simplify + Planner – Abby Lawson from Just a Girl and Her Blog has a great and inexpensive planner to help you get intentionally organized. Starting a blog can be very overwhelming and getting a little organized can go a long way.