Living Frugally: Putting It To The Test

I wanted to share a little bit about how I came to the place in my life where I'm making a conscious effort to live more frugally, which in turn led to me blogging about it. My husband and I have been married for 14 years. For several years early on we lived fairly frugally because we just didn't have much choice. I had graduated college just 7 months before we met and still hadn't found a job in my field and he had stopped taking classes and was working full time. We were engaged 4 months after we started dating and married 7 months later. We both worked as servers in a restaurant and there just was not much extra money. We both had some debt when we met, mostly credit card but I also had a small student loan. We decided we didn't want to start our marriage loaded down with debt so we focused on putting every extra cent into elimating that debt. We started our marriage with almost every last penny paid off and took care of the rest shortly thereafter. Unfortunately, we didn't get rid of the credit cards completely and over the years that surely cost us a lot of money. We mostly just kept the credit cards for emergencies. There was virtually nothing leftover to save so there was no emergency fund to fall back on. If the cars needed repaired or an emergency arose, we had to use the credit card. There were a lot of money saving skills that we just didn't have then.

A few years into our marriage , tax time rolled around and we discovered that the company had messed up the federal withholdings on my husbands income and we owed the government a chunk of change that we did not have. My wonderful parents gave us the money and we learned our lesson the hard way that we had to figure out a way to save up an emergency fund. I was determined to never have to go to my parents for a bail out again.

As the years passed, my husband worked his way up the ladder of restaurant management and our income increased. When we had our first child in 2000, I was able to become a SAHM and even though money was tight, it was also manageable. We kept an emergency fund, had a mortagage and car payments and felt we were doing okay. We tried to never charge too much on credit cards but from time to time we'd slip and carry a balance for a few months.

A few years ago, we had our first wake up call that we'd gotten a little too comfortable with the new income level. We had 2 children to shop for and I was guilty of wanting to buy my girls cute little matching outfits, my husband bought a car we really couldn't comfortably afford as well as an expensive life insurance policy because he wanted the girls and I to be taken care of in case something happened to him. And suddenly, it seemed, we were starting to have trouble getting by each month. I had heard about Dave Ramsey from someone I went to church with. I bought Total Money Makeover and read it and suggested following his plan to my husband. He balked at giving up the credit cards but agreed to implement some changes to correct our financial situation. But we didn't fully commit to the plan. We sold the too expensive car, dropped the insurance policy and just had the one offered through my husband's work and I reigned in my clothes shopping. We made a few other small adjustments and, once again, felt like we were doing okay.

Shortly after that, my husband received a promotion and we moved to an area with a higher cost of living. Thankfully the promotion brought a pay increase which helped balance out the cost of living difference. Still we had those credit cards and sometimes the balance would creep up on us. Early this year, when my husband got his W-2s he was looking at it and commented that we should be able to save more than we were. I agreed and suggested Dave Ramsey's Total Money Makeover again. He agreed to it so I reread the book and then he read it. Then, we sat down and drew up our plan. We had a mortgate, $8000 in car debt, and $1800 in credit card debt. We also had about a month and a half of living expenses in an emergency fund and a good start on retirement savings. Retirement savings is the one thing we are good at. We made our first budget and were quite amazed to see how much money we were wasting each month. Note: I've always handled the money and never had much knowledge about budgeting. Each month I would write down all the money we owed for bills and then try to make whatever was left cover all the rest. Not a super budget plan by any means. So, we started looking at things we could cut out and reduce the expense of so we could save more and eliminate debt.

As soon as we received our tax return we eliminated the credit card debt. And we did make the commitment this time around to stop using credit cards. Then we began attacking the car debt as well as trying to build up the emergency fund. To create more money to do this we cut our grocery budget. I learned how to really use coupons to my advantage. We also stopped taking my husbands pants to the cleaners to have them cleaned and pressed. He continued to take his shirts because he likes them super starched but by me taking over washing and ironing the pants we saved ourselves $800 a year. We also changed my cell phone to a pay as you go plan. This saved us over $400 a year. We also began budgeting for items like clothing, entertainment, meals out, gifts, etc. We knew what we could spend and would not go over it. No more impulse buys that really add up. We had a plan and it was working.

On September 3rd of this year my husband lost his job due to restructuring, another company suffering the impact of all the problems with todays economy. We did not freak out. We had 3months of expenses in the emergency fun and had reduced the car debt to $4000. I also had an almost fully funded Christmas account so that was not going to be a worry. I knew I could cut the grocery budget some more and still have plenty, especially since I already had a stockpile to work with. We made a few more small cuts in things like entertainment, meals out, etc. and figured we could make more dramatic cuts if it looked like this period of unemployment was going to drag on. My husband also received a severance package which we promptly put into savings. We were able to live off of what we had in our checking account up until the last week of November when we finally had to dip into savings.

My husband spent his days the last few months working on finding a new job. I don't know if I've ever been as proud of him as during the last few months. He did not get down. He did not slack off. He just kept moving forward. He started his new job on December 8th. We are incredibly grateful that he has a job. This job does come with a significant decrease in pay from the last job though. While in training, he's making almost 40% less than he did at his last job. His pay will increase over the next 6 months to a year but it will still be 25%-30% less than he made before. So now we get to put all that we've learned about living frugally to the test. We know we can pay our bills but we're going to have to get creative to come up with extra money to save. But I'm confident we can do this because we've learned the skills and have access to the resources to do it. And I am so thankful to have these skills to pass onto my children so that they can go into their adult lives fully equipped with the knowledge to successfully manage their money.

All of these experiences led me to create this blog. At first, just because I was wanting to share all the great deals with others who would appreciate them but now even more I want to share what I've learned and what I continue to learn with others. I hope you will find what I share to be useful.