It Feels Good
Really good, actually. Let make take a moment to bask in this evidence that we are doing it! In one month we decided we were sick and tired of being broke, set up a plan, stuck to it, and accomplished our first goal of saving $1,000 in (under) 30 days.
Before you get your panties twisted, let me just throw something out there. $1,000 isn't a lot of money. I know this. If a real emergency crept up on us right now, we would still be screwed. I'm not saying that $1,000 is the big, monumental goal of financial freedom. What I am saying is this is the first big win for us. And I'm going to celebrate it.
It is so much more than just $1,000 in the bank though, guys. This was just the tangible outcome. In this month we learned that giving up my daily iced latte is not the sacrifice I thought it would be. We learned that we could hustle. We learned that once we set our minds to something, we would get there.
During this first month, we never went hungry, our boys still got new clothes (but we didn't buy the whole store), and we even ate out (twice). We deviated from our budget three times because we learned that we didn't give ourselves enough for food for the month, but we learned from it and adjusted the budget to fit.
In The Beginning...
Our goal is to taste the sweet relief of financial freedom as quickly as we possibly can. We have debt up to our ears and no matter how much money we brought in... it never felt like enough. Things like family vacations, occasional shopping sprees, and upcoming holidays felt suffocating. Uhhh we can't afford that, Christmas is cancelled, no more birthdays this year.
Some of the best parts of life - gave me so much guilt.
So I went a little crazy, opened an investing account for the peanuts I could spare, started listening to ALL the finance podcasts, and restricted our budget so tightly we failed in the first two days. Yep. I'm all or nothing.
Then, I slowed my roll and began to focus. A necessary step. I stopped putting my peanuts into an investing account, stopped listening to the finance podcasts that practically screamed at me to be investing everything I had, and started looking at baby steps.
After reading The Total Money Makeover, we figured out our first baby steps.
Figure out where the hell all of our money was going
Set up our own Zero Based Budget
Save $1,000 for an emergency fund in 30 days
The very first thing we did was look over all of our credit card and bank statements. Ouch. That was painful. We realized for the first time that we were paying a bare minimum of $900 towards our debt each month (excluding housing). That was Minimum Payments - not what we actually pay.
We also realized that we had become one of DoorDash's best customers since COVID began back in March.
And finally, we realized that we had a nasty habit of using credit cards once we ran out of earned money each month. Which, of course, only added to that hefty pile of debt we were already paying for.
Next, we set up our Zero Based Budget. Let me be very clear here: we started our plan before the budget was perfect. We adjusted the budget as we went to avoid problems moving forward. But the very biggest part of all of this - was that we got started.
I created our budget in Excel, because I'm a nerd. Here are the categories we use:
Boys (clothing, shoes, etc.):
Aesthetics (I get my hair colored each month and I used to get lashes):
Household (TP, Paper Towels, light bulbs, hand towels, etc.):
Hygiene (body wash, shampoo, toothpaste, hand soap, etc.):
Subscriptions (Netflix, Amazon Prime, Hulu, etc.):
Cell Phones (we are still paying them off):
Credit Card 1:
Credit Card 2:
Credit Card 3:
Credit Card 4:
Credit Card 5:
Each month I go through and estimate how much we'll need in each category, then I break that out among our 4 monthly paychecks (Husband and I are both paid twice a month). Before we even get paid I know exactly where each dollar is expected to go, there is nothing left over (hence the term - zero-based budget).
I created a column next to our expected income and expenses for our actual income and expenses. I update this with each paycheck since our income varies each pay period. Each time we go grocery shopping, pay a bill, fill the gas tank, etc., I enter in what we actually spent as well.
This helps me not only stack on track, but watch over time if there are specific areas where we consistently need more or less money.
We prioritized our emergency fund above all else for any excess scraps we found along the way. We spent very frugally this month, and really considered whether or not we could wait before purchasing certain things. We stopped impulse coffee runs and convenience store stops. We returned cans, we had a garage full of crap we don't want that we could sell on local Facebook pages, and we had old piggy banks we could cash in.
We also paused all contributions to investments, temporarily and significantly lowered my contribution to my 401(k), temporarily. I did not go below what my employer will match because to me, that didn't make sense.
Every spare dime, went to that emergency fund. We hustled.
After the second week, once we could see that a smidge of progress had been made, it was no longer painful. At that point it became exciting. We wanted to see what we could actually accomplish. And if we didn't hit our goal, it certainly was not going to be from a lack of trying.
The Hardest Part
As I mentioned before, there were a couple snafus along the way. We are rookies at being frugal and rookies at impulse control. But every time, we got back on the horse.
The first mistake I made: Not fully appreciating how insanely busy life is with a husband who is gone 12-14+ hours a day, two very young hooligans running around, working just under 40 hours per week, and trying to accomplish everything a stay-at-home-mom (SAHM) would accomplish.
Getting off work after 5PM with two starving kids vying for my attention made getting dinner on the table an absolute nightmare! By the time I was done with work I was already tired out and my husband is not always home in time to help get dinner started. So we found the trigger for all the DoorDash orders.
To remedy this, we took meal planning pretty seriously. If you're a meal prepper - that skill will definitely come in handy! Admittedly, we were not always on top of pulling meat out of the freezer in advance or even looking at a recipe until it was time to start cooking #rookie! But we got better as we went.
The second mistake was not planning ahead for my friend coming to town. She and her husband came for a visit and I did not put aside any money for us to go out with them. But hey, when Grammy offers to watch the kids so I can have a night out - I'm all in, hands down. I need a break sometimes, and these opportunities don't come all that often.
So, what did we do? We went out, had a blast, and then hustled harder. That's when we got creative with returning cans and finding any other possible ways of making extra cash using what we had. We didn't spend money on certain things we'd planned on - because the emergency fund was our #1 goal.
What Really Worked for Me
I kept my mind on my money, and my money on my mind. Cheesy, but true. We focused very intently on our goals, and how it will feel when we no longer have massive debt payments - better yet, how it will feel when we have enough saved up to support a job loss without fear. That kept us going.
In all my buckets of free time *insert eye roll* I studied books on finance. I'm trying to surround myself with as much insight and knowledge as I possibly can right now. The more I do that, the more exciting the future looks, and the more exciting the future looks - the less painful it is to cut back and learn to control impulses.
The Next Step
Baby steps: that's what everything revolves around.
So here's my next baby step: start crushing our debt, aggressively. We're going to start with the smallest debt, which is the amount left to pay off our cell phones. Next we'll start moving into credit cards, one at a time, until we can tackle student loans and the car payment.
While we're tackling the cell phones, we will only make minimum payments on everything else. If we can keep our impulses in check we'll finish that off by the middle of next month. Then we'll put everything that was going to the cell phone payments towards the next smallest bill on top of the minimum payment we were already making.
As we move forward the amount that we can put towards the next bill gets bigger and bigger: the snowball method.
Now Go Get Started
Its important to know where you want to go before you start a journey. Its really, very helpful. But more important than that, is starting your journey. Yes, its hard. Yes, its time consuming. But yes, you can do it too. If you really want it.