Monday, June 13, 2016

9 ways to save 25% of your income

A recent study found that 62% of Americans don't even have $1k in savings. You can beat that statistic in one month!

Find more here.

So our family made the decision that I would take the summer off from work to stay home with our 2 year old and get some rest. Wow, what a joke! I knew that it wouldn't be easy, but adjusting to staying home is proving to be quite the task. Aside from the running after my son constantly, cooking, and cleaning, these few weeks have been difficult because of the down time. And I know, you're thinking "but you just said..." I know what I just said. [BUT] It's still true that even though the list of chores is endless, as is the toddler's endurance, there is time when I just can't stand one more second of being home. I get really bored, really easily. And right now, all the clothes are clean and put up, all the dishes are drying (no dishwasher), and the kitchen has been cleaned for the 3rd, 4th, or 5th time today. The toddler is asleep, dad is in the other room working on homework, and here I am with thousands of movies on Netflix, and can't find a single one that sounds appealing.

So, at this point, you're like "Where is this going?" I promise it's about to all makes sense. So, what is keeping me home? Why can't I just go somewhere? Two words: SAVING GOALS. Love them. Hate them. Yeah, so when I said I wasn't working in the summer, I didn't go into detail that I am a teacher who also worked at the bank until like 20 days ago. I also did not mention the loss of income this "summer off" created. (I also failed to mention the Whole30 that is life right now.)

So, SAVING GOALS don't just disappear. And you can't let them either. I can't let them. We can't let them. A goal is a goal. It does not care about your summer off or your caramel macchaito craving (neither does Whole30). It does not care if you REALLY want a new set of sheets or a new everything because you feel like you're inside the "Yellow Wallpaper." How do you keep on track and not go crazy? I'm asking. It's not rhetorical. It's a real question. It needs a real answer.

I want to talk a little bit about budgeting and goals. Two years ago, my husband and I did not have a penny. In fact, a year and a half ago, we had just saved our first $2k. So, how did we get to a secure place? How do we know in our gut that we will never be poor again? Because we have been poor. We had food stamps. He worked four jobs just to pay our necessities. I stayed at home with our child and sweated in a house that was 85 degrees. Many people don't know any of that about us. Many people think that because we have college degrees-- and full time jobs and an Audi and a house and food--that we don't suffer, that we have never suffered. It's all about the suffering. It's all about the struggle. It's about looking at each other and know we are all that each other has.

So, you have to have that feeling. You have to see that tomorrow can always be better so long as you commit to seeing it through. And tomorrow doesn't always mean the day after today. Sometimes, tomorrow means that when you kid turns 16 that you have a 4,000 sq. ft. house with a pool and your son gets home and the car of his dreams is waiting on him. GOAL is not today or the day after today. Have the discipline to tell yourself no so that you can say yes in the future to something that is a thousand times better.

So how do you save once you've made a goal? Here are a few tips that we use every day:
1. Don't pay for cable. Most people go for this one first these days (B/C Netflix, Hulu, etc.). We have to use internet for school, but cutting cable reduced our bill by $35. Just make sure that if you do get a service, it doesn't end up costing you the same amount.

2. Reduce your cell phone bill. We have tried this a couple times. We recently switched to Sprint, which will save us $68 a month. Their new promotion cuts your old cell bill in half.

3. Don't use excess utilities. It's hot. It's only June. I get it. Due to the high heats, we have started raising the temperature in our house 1 degree at a time. Every bit counts, especially when you get to August and you've already adjusted. Trust me, we did have it set at 72. Miss it already, but I won't miss the high bills.

4. Get rid of a car, reduce insurance, etc. Again, we have done this before, and we are attempting to do it again. We rarely use one of our vehicles, and although it is paid for, dropping insurance on it could save us $70 a month.

5. Begin a debt snowball. We don't use credit cards anymore, but there was a time when we had to. It does not just disappear over night. Once you have a good savings (recommended is 6 months income), the best idea, although it hurts, is to pay off those high interest debts. Start with the smallest, and add your payments up all the way to the largest.

6. Don't eat out. Ever. Whole30 is really persuasive in this task. It is nearly impossible to eat out, and although eating 3 meals a day at home has increase grocery bills, I'm not dropping $10 every time I drive thru Chick-fil-a for my son and me. Instead, we spend time as a family cooking and hanging out together. It makes for a much healthier outlook on food.

7. Know when to treat yourself and how. So let's say it's been a while since date night and you really have the urge to go out. One of the greatest things our movie theater (Carmike) offers is a budget matinee. It's 4-5:30 every day and each ticket is only $5. Combine that with the $4 popcorn bucket refill, and you're out of there for less than $15. My family wondered how we could ever afford going to the movie "all the time" (2 times a month) when we were living below the poverty line. Well, that's the cost of two meals at McDonald's now, folks.

8. Don't buy things that aren't on sale; don't buy things you don't need that are on sale. We bought a house that was nearly the same configuration as our old apartment. We only needed a few things. That being said, I waited mucho time to get them.  Nothing we have in our house[that we bought] (with the exception of a thoughtful, but cringe-worthily expensive anniversary present) cost more than $200. Most things were less than half of that. And I'm talking pairs of things. Target is the most reliable store I can think of. The reason being this: SEASONS. Target is all about trends. Once something is nearing the end of a season--right now lobsters and sandals--it WILL BE marked down 30% and then 50%. I promise. You just have to wait. And again, have the discipline to say no. We've all seen the target memes. Went in for toothpaste, spent $147.93. Set up a fund and determine what you are willing to pay. Then go in and see. I went into Target from September to probably April until I found side tables. They were marked down to $40 each. This also goes the opposite way. Don't just buy another pair of yoga pants because they're $9.98. I promise, they will be the same price every single year. I would know.

9. This is the most basic, but the most difficult. Find out what you make every month. Subtract your essential payments. Save almost everything else. For instance, here is our old model:
Rent: $745
Power: $150
Gas: $35
Water: $28
Car Insurance: $138
Car Payment: $273
Misc Debt: $171
Phone: $156
Internet: $40
Health Insurance: $210
Life Insurance: $30
Total: $1976

Income: $3830
Minus: $1736
Save $1k a month
Spent $200 a week on gas, groceries, etc.
($60 gas, $80 groceries, $60 misc)
I really don't remember having this much money. I think I forgot a payment somewhere. However, we live on about $50 less a week now. We use little to no gas now, and the only thing we purchase is groceries. 
[$3830 a month equates to less than $48k a year. $12k is roughly 25%]

So, clearly with these tips, you can save more than the 25%. Hope your future looks even brighter now!