“Money, Money, Money, must be funny- in a rich man’s world.”
Any Abba fans? Their tunes are catchy!
Ever wonder how exactly the rich get their money? Is it luck, skill, inheritance or do the wealthy have money because of their hard work? I believe more than likely a person can become wealthy for many reasons, but they -stay- wealthy through hard work and determination, discipline, education, using the right financial tools and a little bit of bargain shopping too.
**My disclaimer- I am not an expert on money. I will forever be a student learning, growing and perfecting my life. But, I do have many years of experience and sacrifice proving that- I have indeed made a financial shift in our family’s life and future using these tips below.**
My Financial Backstory of Hitting Rock Bottom-
I’m sure our story is a familiar one. Back in 2012- my husband and I were college graduates- with over $10,000 in school loans looming over our heads. We had a loan on a modest car, I just had our second baby (hello doctor bills!) my breadwinner husband lost his job. We scrambled and gathered some savings, took out a loan and he started a new career that went sour three months later- we lost $5000. Our spirits were low, nearly losing almost everything, and then, on Christmas Eve we were sent to collections jobless and drowning in debt that was mostly created in a few short months. Living the “poor college student” lifestyle wasn’t enough, we didn’t have a savings account. We didn’t have a financial plan in place and we certainly didn’t anticipate losing a job. This is where I’d say we made- mistake number one.
With collections breathing down our necks and- did I mention we were weeks away from being homeless? Oh, right- that happened to. Shane took a low-paying job to make ends meet and both of us started donating plasma. It took until June- a full six months before I felt like I could breathe (collections were finally paid in full) and nearly a year from the date Shane lost his job before our home felt stable again. My husband and I vowed we would never put ourselves in that situation again because of our lack of game plan.
—-Living Frugally Isn’t Enough- You Need to Make Goals, You Must Create a Game Plan—
I split up the most important sections of a game plan in three sections: Financial Tools, Communication and Frugal Living.
With a new found commitment to educate ourselves to never put ourselves in that financial strain and stress again, I turned to books for answers. If you know me (Morgan)- you know I love books! I devoured every financial book I could get my hands on and found I loved the Rich Dad, Poor Dad series by Robert T. Kiyosaki. My husband loved the Total Money Makeover series by Dave Ramsey. But we didn’t stop reading with two books, we read a handful more that I’ll share the titles and authors below.
Remember: In all the books and tools I will share with you- each of these authors provide different starting points and routes to financial freedom. One way- is not the correct way, YOU get to decide which method is best for you and your family. But each have these routes require a conscious effort to make goals, follow through, self- awareness and discipline and the end result should be the same- less financial stress, more financial freedom.
- Track your monthly expenses- fixed bills and variable expenses.
- Eliminate debt.
- Create a budget.
- Create a 1-month Emergency Fund and then 3-6 months emergency fund.
- Pay yourself a portion of your income.
- Make a charitable donation.
- Talk about goals- small, medium and long-term financial goals.
- Create a budget (Listed twice on purpose!)
- Live a frugal, money-smart life.
- Look for ways to make money in other opportunities.
- Be consciously aware of your money and where it is going.
These are just some of the steps each of these books talks about- and they work! Oh my gosh you guys- they work!
Making Goals- a Specific Tool:
During 2012-2013 I bought the whole series of the Rich Dad Poor Dad books and my husband and I read the books, applied the principles and turned our life around. In twelve months we paid off the $12,000 in debt and finally had a savings account! Same crappy paying job, just lifestyle habits changed and doing things on the side to make money- we paid all of this debt off- IN THE SAME YEAR, my friends.
Yes, there was sacrifice, my husband and I both donated plasma for six months multiple times a week and said no to all the extra activities and trips- that was very hard. Yes, there was sacrifice and perhaps there were a few tears on my end… but there was nothing more satisfying than seeing a massive debt gradually dwindle away to nothing! To finally feel in control of our finances, to know exactly where every penny was going and create a safeguard for the next time an emergency occurred- we would be ready. The following year, we paid off our student loans, remained debt free and continued to build our emergency fund. Yahoo! I cannot recommend making the time to read financial books more- they can change your life.
For the full Financial Books list head to this Financial Booklist:
My Top Two Books:
- Rich Dad, Poor Dad series by Robert T. Kiyosaki- basically anything by him!
- Total Money Makeover series by Dave Ramsey
I love how Kiyosaki talks about finding margins where you can take away those “extra” expenses and look for ways to make money on the side- this is key to getting out of debt faster. Check out this book for more margin and saving ideas.. I highly suggest getting the Rich Dad Poor Dad series to have a tangible debt helper and because- it’s awesome. Just remember- there is sacrifice in the beginning, but the sooner you have those little debts no longer nagging the brain, the happier you will feel because you are free!
I am a firm believer in school, frankly, I love learning! When I discovered in 2017 a free eleven-week course on personal finance for self-reliance– I signed my husband and I up! I can not tell you the amount of information I learned in this class. I loved that the course came with a workbook- to write down all of my impressions, but also to write down actionable weekly-steps. As partners, we kept each other accountable each week. I highly suggest this course if you are interested in perfecting your personal finance or if you are just starting out. Such great information and available to anyone who is interested. Check out the free access site here.
As much as I like learning, there is still so much I do not know. Summer of 2019 my husband and I decided to talk to an official financial adviser about retirement and possibly investing on our own. (Yuck! Now I sound old!!) We did our homework and met with someone we trusted to help set up a large game plan for our family. Never have I felt so intimidated and sick and possibly excited, but mostly overwhelmed by numbers in my life! To layout our life for the next fifty years and see what that looks like. Could we afford to pay for our kids’ college in ten years or weddings, service missions? Make small goals like- when we would buy a new (to us) car. What about retirement! When should that happen? How much we would need to survive on retirement…phew it was a rough stare down the face in mortality, however, I walked out of the room- yes exhausted, but also a little pleased. We were on the right track thanks to all of the amazing books and actions we have taken thus far. But, we can always improve too!
Step Two: Communication
Even with all the right tools in your tool belt, or cards in the wallet- you have to remember your teammate. There are couples that have separate bank accounts, we do not. There have been times where one spouse made a purchase that has set us back all because of the lack of communication between partners. Just because you both know what the right thing is to do- don’t forget you have to continue to keep each other in line. Talk about your expenses, talk about the small and the big expenses through family council, set a budget together that you are comfortable with and stick to it!
If you and your spouse are looking for some excellent communication resources and easy to use apps- check out Tiffaynee’s future post coming here. She gives lots of ways you can improve your communication skills. It is essential to get on the same spending page too!
This year Shane and I did something we’ve never done before- talked about our entire year and a half of financial AND vacation goals. Phew! It was quite the meeting talking about all of the time off, financial goals we are trying to reach, expenses we know are coming, while also planning how we will play on the trips we’ve planned. Yes, it was intimidating to put a number on those goals, but it was also so exciting. Put into perspective what daily money we could cut back on to make sure those long-term goals happen!
Long-term family council meeting can feel intimidating, start small. Start by meeting with your spouse at the beginning of the month or even the start of the week. Make a game plan for financial goals you would like to meet to make sure you stay on target.
While in spouse counseling talk about the monthly budget. Our budget is set for our fixed variables, but there are other expenses that vary. When making your monthly budget, take into consideration the last three months of spending. But also, remember your personal goals, long term and short term goals. Personally, in our budget every paycheck we contribute a percentage to our church, as well as a percentage to ourselves. We also put a portion away for trips, as well as an emergency fund. When we first started- our goal was to have an emergency fund that pays the bills for a month and now we are working on our three-six month emergency fund.
Again, with all of these tips, I refer to this fantastic program here. This system taught us a wonderful way of creating a budget that works, and doesn’t I don’t feel restricted by money as I thought I would. Instead, when I follow a budget I feel in control with my spending and know that I am making a difference for my future- which is exciting if my future is budgeting for a trip!
One of my favorite Youtube/Instagram fugal living woman to follow is Malea, from The Malea Show. She has a fantastic youtube channel constantly sharing information about living with less, saving money and the link here is all about the easy budgeting trick she uses for her family. Excellent info on this video and other videos I highly suggest!
Step Third: Frugal Living
The definition of frugal is: sparing or economical with regard to money or food. In other words- be careful with your spending habits. By this point one should have assessed what little things/services they can live without for a season. Now, here’s the daily- task to maintain that budget and living frugally. If your family is just like mine- you probably discovered a large chunk of your budget goes toward the food bill and the many starving mouths.
Cutting Down on the Grocery Budget:
Meal Planning and Grocery Pick Up:
The last three years as my family has grown and kids are eating so much food (I’m terrified of the teenage years!), I’ve cracked down on the meal planning! If you need more ideas on how to meal plan for two weeks or longer on a budget- check out this post. I go into depth with my frugal meal planning and process. But in essence, the steps are simple:
- Don’t go grocery shopping on an empty stomach.
- Shop the sales.
- Take inventory of items in the fridge, freezer, and pantry.
- Make a 2-week menu.
- Make a grocery list.
- Stick to the grocery list.
- Utilize the grocery pick-up feature (if you aren’t sold on this concept yet- check out this post.) and you’ll cut out spontaneous choices too!
The title explains itself, you pay your bills, but don’t buy anything else. Literally do not buy: food, presents, go out to eat, nothing. See how far your frugality can take you!
Invest in Non-perishable foods and/or food storage items.
Again, if you are taking inventory of your food and are well aware of the items of food your family eats the most of- you can stock up on those items when they are on sale. There are also other products you can purchase that have over a couple of years shelf life. For more of our longer-term food storage products of choice- that you will actually use- head to this post here.
Handling Christmas and Gift-giving on a Budget like a Boss:
Everyone has their own traditions and way of giving gifts. Some love giving or receiving gift cards, while others find gift cards offensive and impersonal. Truly, you can never please everyone. Do what is best for your family! In the meantime, here are some tips!
- Communicate with your family/spouse about the holiday/birthday season. See if there is something they would like and arrange a way for everyone to go in on that item.
- Purchase things in advance. You know when their birthdays are, if you find something that screams that person’s name- grab it and save it for their birthday. There will always be exceptions to this rule, especially with kids and clothing, but for the most part- this rule has served me well.
- Budget in “birthday/Christmas/gift-giving” amount each month.
- Bargain shop. Hit up my favorite stores like Ross, T.J Max, and Homegoods store.
- Lastly, this is my new favorite way of gifting gifts to our children… experiences over presents. It’s as easy as it sounds. We have so much in our home already, and do our kids really need more Lego sets? Probably not. But, would our kids like to go to a movie with their friend instead? Yes! This worked well for us for a couple of years, and then we decided to do it for Christmas. We still give our children a few necessary items at Christmas, and then- they are gifted the adventure coupon book to use throughout the year. It was a huge success three years ago that we’ve continued. For more info on our adventure coupon book- check it out here.
Living paycheck to paycheck is H-A-R-D. I will be the first to admit those years then and sometimes now- are the worst. Before we lost our job we didn’t have a game plan and paid for it dearly. We have learned from our mistakes, read some incredible books and free training, sought out a professional financial planner, learned how to better communicate as a couple, especially about money and we continue to live frugally. I have a specific post here, talking about the 6 New Year goals I make every year and one of the goal category- is financial. Why? Because choosing to make good financial decisions is an every day, every year goal. Now, we are not financially secure, we have lots to learn and lots to improve on. We do, however have a game plan and have our eye on the the prize and this route- though tough at times- the financial freedom we continue to enjoy is well worth it in the end!