After my post last Saturday about meeting our financial goals, I had a couple people ask how we did it.
The easy answer? Lots and lots of work.
But there was more to it than that working our butts off each and every day. Yes, you have to work in order to bring in money to achieve your goals, but what you do when the money is in your hand or account is important as well.
We made a budget and stuck to it.
At the end of every month, I make up the next month's budget. Ever Monday night when Pete has guy's night, I update it, pay bills, and make sure we're staying on track. One thing I do is I cheat with my budget. For example, if we're bringing in $2500 a month, I set my budget up for a smaller number, like $2000. It forces us to really pinch the pennies, and with me being a spender, if I see that money is tight, I'm less likely to make impulse purchases. That leaves us money left over each month to save. There are definitely months we go over that smaller amount, but we have a cushion. If I made the budget to the amount we're actually bringing in, I'd be putting money in categories and spending left and right. When emergencies come up (like having to buy a new heater for our basement), we wouldn't have that cushion and would have to either take out a loan or tap into our savings, depending on the situation.
We have an emergency fund...but rarely use it.
I got into a discussion with my mom a few weeks ago about this. Our heater in the basement had just died and I spent two hours trying to find room in our budget to pay for it. It was one of those months that our cushion was really small for the month (gotta love having to buy car tires unexpectedly!), so it was stressful finding the few hundred dollars to get a new heater. My mom's point was that we had an emergency fund, just go to the bank and get the money; she had a great point! My thought was that if I could find the money in our budget, I would do that instead. I'm afraid if we get in the habit of getting into the emergency account for things that can be considered emergencies but can swing in our budget, we'll (okay okay, it's definitely me not Pete) stop trying to use our budget and just rely on the emergency fund for things. It's happened to me before, so this is me trying to not repeat the past.
We gave more than ever before.
How this works, I don't know. God definitely tells us in the Bible to test him when it comes to giving. We've continued to tithe with Pete's paychecks, and for the first time ever we've been tithing at the end of every month on how much I brought in from babysitting and teaching preschool. We've given to charities, community members going through tough times, missionaries, and continue to support our radio station and our Compassion child every month. I will admit, there are definitely times where we would like to keep that money for things we need or would like. But seeing it impact other people is so rewarding!
We are cheap.
Okay, not in the sense like we don't tip our waiter as much as we should. But more in the sense that we don't need to go to the mall to buy new clothes; thrift stores have awesome clothes for a fraction of the price. Yes, if you're searching for something specific, it might not be the best option. For furniture, we shop Craigslist (who needs new furniture when you have little kids who will ruin it just by looking at it?). We still have a tiny non-flat screen TV. It's starting to die, but hey, it still works for what we need. We buy off brand items most of the time. We make the choice to live a simple life and only buy what we need and make do with what we have. We do still make some purchases that are brand name (I'm very picky about my tissues and toilet paper...), so there are things we still could be better at. I've heard stories about people who cut back so much they don't buy rolls for their hot dogs....yes, we could do that, but I like my carbs too much :)
And last but not least, we couldn't do it without God
I know some of my readers might not agree with this, but we truly feel like God has blessed us. We're trying to manage our money in a biblical fashion, and I hope God's pleased with what we're doing.
In the grand scheme of things, there is no formula, no tried and true steps for making and saving lots of money. There are definitely things that help, but not all things work for every person/family/situation. If we could choose, we wouldn't be working like this; Pete would be working at one school full time, and I wouldn't be babysitting this much. It's stressful and the sacrifices we're making are not easy. We're tired. We're getting burned out. But this is a short term thing for long term gain. We want our kids to be able to go to college with as little debt as possible, preferably no debt. We don't want to be swamped with debt payments each month. And we feel like these are the steps to take to get there.
What do you do to achieve your financial goals?