I think it’s safe to say we’re in a rough economy right now. Everything seems more expensive from groceries to insurance to property taxes and beyond. In the beginning of 2014, I started getting very interested in personal finance and started to read books about not only HOW to manage our money better, but also WHY we spend the way we do. It really opened my eyes to the fact that I could handle things better than I was. I had been managing our finances since pretty early in our marriage and thought I was doing a great job. I was not…and I was also convinced it was my husband spending most of our money. Also not true. What I found was that it was all the little things we were buying that were adding up to be BIG expense. I was the one buying all our little things, not him. It was hard to take a good look in the mirror and admit I had to change. So, what did we do?
- We got on a budget
- I do zero-dollar based budgeting, meaning every dollar gets assigned to something per month. Our income, minus expenses each month equals zero. This helped me direct our money where to go instead of being confused how we spent it.
- We cut up our credit cards
- This was a tough one for me. I love getting rewards points and free items, but I was using them too much. Once we got on a budget, I found that I didn’t need them as I was now being intentional about living within my means!
- We started an emergency fund
- Our initial goal was 8 months of funds equaling our expenses saved. We were able to achieve that within the first 12-18 months. If you haven’t done this, it’s an amazing feeling to have that safety net beneath you!
- We looked for deals EVERYWHERE
- We changed the way we shopped, the frequency of shopping and where. The most helpful change was trying Aldi for groceries since that is a weekly expense. It’s my opinion that if you get the grocery bill under control, it’s much easier to get other things under control.
- We made plans and set goals together
- It was so exciting to change our ways and experience progress made together.
This made a HUGE difference in our lives. Having that first emergency fund of 8 months expenses in the bank gave us security for the first time ever and it felt so great! Once that goal was achieved, we were able to start setting money aside to finish the basement in our house. More on that next time…
The bottom line is this…we have budgeted, saved, invested and been responsible with our money for 10 years, so while it may not be responsible for just anyone to buy a second home, I am confident we’ll be ready! 😉